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THE MAIN CHARACTERISTICS OF THE SOUTH KOREAN
AGRICULTURE
GYÖRGY IVÁN NESZMÉLYI
Abstract
This study intends to give an insight to the past and present state of the South Korean
agriculture. After a brief overview on the country itself the paper attempts to discuss main
topics as follows: the historical roots of the present agricultural land and production structure,
the main roles of the agriculture in South Korea, the main features, sectors of the agriculture
in this country, the complex, multi-level co-operative system and finally what the main
challenges are to be met in order to keep on a sustainable way of development in the future.
Keywords: Korea, Agriculture, Land reform, Co-operatives
JEL: Q13, Q15, N55
Introduction – The antecedents of the study
The Author’s habilitation candidate lecture served as a basis for this paper which was
delivered at Doctoral School of Regional Studies György Enyedi of Szent István University,
Gödöllő on 6th of April, 2016. It can also be considered as continuation of the author’s
research he pursued during his Ph.D. studies in the mid 1990’s. In his thesis (Analysis of the
Macro-economic Processes of the Southeast Asian Countries) he examined the peculiar way
of development of the newly industrializing Asian economies (ANIEs) under the hypothesis
whether these countries had a special model of development or they can just be considered
very successful but exceptional, individual cases. However it is doubtless that these
economies (the Republic of Korea, Taiwan, Hongkong and Singapore and several other
ASEAN countries) may have many cultural, social and other similarities. The mentioned
thesis focused mainly on two countries, the Republic of Korea (South Korea) and Thailand in
the form of case studies. In the frame of these case studies a special focus was put on the
agricultural sector, whether it played an important role in the spectacular economic growth of
these economies (NESZMÉLYI, GY. 1997). It seemed to be an interesting „offspring” from the
main stream of Asian studies as the well known economic success of the East and Southeast
Asian countries rooted basically in the export oriented economic development policy
industrial export, the flexible adoption to the rapidly changing comparative advantages, but
the agricultural sector has never been in the focus of examinations in case of the „tigress
economies”. So, that time it was a relatively new research topic at least in Hungary. Later on,
during the first half of the 2000’s decade the author worked for the Ministry of Foreign
Affairs at the Asia-Pacific Department, at the Korean desk (1998-2000) then served as
diplomat in Seoul (2000-2004). This period gave him a better, more in-depth understanding
and chance to continue research of this field.
Besides articles and conference papers he published the first monography in Hungarian,
focusing on the Korean food and agricultural sector, “A Három Egykori Királyság Földje -
The Republic of Korea, Her Social-Economic Characteristics and Food Economy”
(NESZMÉLYI GY. 2004) and several more articles and conference papers. However, since that
time more than a decade has passed away so it might be really interesting to review: what has
changed and in which extent during the recent decade in the Korean agriculture.
In: Ritter, K. (Ed.): Economic and Local Aspects of Rural Development
Szent István University Publishing, Gödöllő, Hungary 2016. pp. 31-43. /117 p. (ISBN:978-963-269-550-1)
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Material and methods
The present paper aimed to explore some of the economic, social and political attributes of the
South Korean agricultural sector by descriptive analysis based mainly on results and
information of secondary research being gained from Korean and international bibliographic
sources and databases. Mention must be made about the fat that the author used to live and
work in South Korea therefore his direct experiences and formerly published studies in this
field also contributed to the conclusions of the present paper.
About South Korea in nutshell
The Republic of Korea (ROK, South Korea) is one of the typical newly industrialising
economies of Asia, which has undergone spectacular economic and social development in the
past 4 decades. Her economic strength and advanced state are sustained by the fact that
practically by now the country has recovered from the Asian financial-economic crisis, which
broke out in 1997, her currency became stable again and her foreign reserves have been
increasing again during the last one year.
There is already very rich bibliography available about the reasons of the well-known rapid
development of South-Korea and several other Asian economies (e.g. Taiwan, Singapore,
Malaysia, etc.). From among these factors mention must be made about the qualified, skilled
and cheap labour force, the foreign direct investments and credits, the investment-policy (the
high savings and investment ratio), the unhindered technological transfer, the policy of
industrial development which is more and more concentrating on the know-how and
technology-intensive industrial sectors, the export-oriented policy of industrial development,
the openness for foreign trading and the aptitude for adaptation, the effective central
economic policy, the conscious attachment to the structural metamorphosis of Japan. It can be
stated, that the government played a very active, guiding role in the formulation and the
implementation of the economic policy. (The term "guided capitalism" is also frequently
used.) Mainly by historic reasons (being a colony of Japan between 1910-1945, then the
implications of World War II and the Korean War between 1950-1953 devastated the country
which used to be one of the poorest nations of the world by the early 1960’s. Later on it
showed an impressive dynamic economic growth from the 1970’s thanks to the export-
oriented development of the industrial and service sectors. The rate of economic growth,
especially during the 1980’ and till the mid-nineties was really high, ranging between 8-12%
annually (see Figure 1) but between the two economic crises (1997/98 and 2008/2009) it
could still maintain it around 4-6 annually.
Figure 1: The annual growth of S. Korean economy 1980-2014
Source: BAJPAI P. (2015), World Bank
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From the same diagram it is interesting to observe that Korean economy could very rapidly
recover from the Asian financial crisis (the sharp dropping was followed by a quick recovery.
in one year with a nearly 11% economic growth. The recovery was also relatively fast after
the crisis of 2008/2009, however its impetus was not so strong and also the Korean economic
growth, however still positive, but slowed down to a ratio of 2-4 %. Nowadays the ROK is of
the world's wealthiest nations. In 2015 South Korean economy ranked 11th in the world by in
nominal GDP and 13th by PPP based GDP. According to Global Finance’s estimations, in
2015 the per capita GDP at current prices was 30,808 USD and the on PPP basis it was
37,413 USD (Global Finance).
The country is located in East Asia, in the southern part of the Korean Peninsula. It has a
similar geographic dimension to Hungary (99.000 km2), however its population is five times
bigger (50 million). The major part of ROK is covered by hills and mountains, only 18-20%
of the total land area (1.8 million ha) is cultivated by approximately 2.5 million farmers.
Contrary to the success of the industrial and services sectors Korean agriculture always used
to be a lagging branch of the economy and even now it can be characterized by low
efficiency, and high production costs.
The role of agriculture in South Korea
Agriculture is a strategic sector. It is a commonly accepted principle worldwide that the
national food supply should possibly be covered from domestic resources. Therefore, in
Korea it is considered as a part of national security however it has never been a typical export-
oriented sector – contrary to the industry and services. The overwhelming part of the Korean
agricultural production is carried out in miniature farms (1-2 ha sizes) on fragmented pieces
of lands by 2.5 million farmers. Most of Korean crops and agricultural goods cannot be
competitive at the international markets. The main goal of the agricultural sector in Korea is –
in terms of quantities at least partially - to meet the domestic demands. From rice which is the
main staple crop and from some vegetables self-sufficiency was achieved with modern
technologies while many other commodities have to be imported. In 1960 the contribution of
the South Korean agriculture in terms of GDP was around 50% while it had continuously
shrunk to 2.3% in 2015 (CIA, World Factbook).
As it was mentioned above, the ratio (but not the absolute figures of its performance) of the
agriculture in GDP has considerably shrunk since the early 1980’s. During the same period
the ratio of the industrial sectors fluctuated between 34-39% while the contribution of the
services sector steadily grew from 50% to nearly 60% (BAJPAI, P. 2015).
Brief historical background
At the end of World War II, the southern part of the Korean peninsula was deliberated by
American forces and stayed under US administration. On the15th August 1948 the Republic of
Korea was proclaimed, and soon after this a comprehensive and politically motivated land
reform was launched. The Land Reform Act was adopted in June 1949, which was inspired
and backed by the American administration as well. The main political goal was to fully
eradicate the formerly existing Japanese colonial squatter (latifundial) system and also to
diminish the power of the Korean landlords. The slogan was „Land to the tillers” which meant
to provide land to more than one million landless sharecroppers (40% of the Korean rural
population). The principle was to establish family farming system based on private
ownership. Due to the lack of arable lands and the huge number of landless farmers a strict
limitation was introduced in land acquisition, one family could have maximum 3 hectares
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farmlands. Even those Korean farmers who had bigger size of land had to surrender the
surplus (over 3 ha) against compensation. Another reason was that time for the limitation: the
heavy manual workload of the rice production, that the technological level of that age farmers
could not cultivate rice in much bigger lands themselves even with the help of their family
members SHIN, YONG-HA (1976). The 3 ha land acquisition ceiling was maintained by the
government for decades, even though from the 1960’s the technical revolution reached the
agriculture: mechanization of the manually tiresome phases of production, widespread use of
modern agrochemicals and new breeds.
Even though since the early 2000’s the 3 ha ceiling was lifted higher (to 20 ha), it can be said
that – besides geographical reasons – the land reform of 1949 and its implications can be still
considered as main reason of the present farm structure which is still fragmented and
characterized by miniature farms. While in 1949 nearly 60% or South Korean active
population worked in agriculture, during the 1970-80’s – the industrial development
generated a gradual but massive migration from rural areas to the cities. The rural population,
especially the number of active workers in the agriculture rapidly diminished. By the end of
the 1980’ decade there became labour shortage in the agriculture. In 2015 5.7 % of the South
Korean employees worked in agriculture (CIA World Factbook). Since then the Korean
government has been trying to provide incentives for the rural population to prevent that even
more people should give up farming and leave for better jobs and income opportunities to the
cities.
The Korean government initiated various programs to improve rural conditions. The most
extensive of these was the New Community Movement (Saemaul undong, known as the
Saemaul Movement). Its goal was to mobilize villagers in their own service. At first Saemaul
projects were aimed at improving household living conditions. Later, projects were directed
more to the village as a whole and included the construction of roads, bridges, irrigation
ditches, and common compost plots. Next, the program focused on more economic concerns--
group farming, common seed beds, livestock production, forestation, and even joint marketing
and factories.
Better health and sanitation as well as beautification of the environment also became program
goals. The government provided the materials and small amounts of money to the villagers,
who supplied the labour. In the early 1980s, President Chun removed control over the
Saemaul Movement from the Ministry of Home Affairs and left most decision making to the
Saemaul leaders and bureaucrats, headed by the (former) president's younger brother, Chon
Kyong-hwan. The Saemaul Movement initially was quite successful but deteriorated in the
early 1980s. Chon Kyong-hwan, arrested on a variety of corruption charges in 1988, was
accused of large-scale extortion and embezzlement while he was chairman of the movement
between 1981 and 1987 (SAVADA A. M. - SHAW, W. [ED.] 1990).
In this respect the agricultural policy had to tackle the issue of the rising disparity between
farmers’ and other households’ incomes by providing incentives and even higher subsidies,
focusing on the rice producers. Mention must be made about another phenomenon which
jeopardize the future of Korean farming: the aging of the rural society. In 2005 30% of
farmers already exceeded the age of 65 years. This trend still has not turned back. Due to the
mentioned situation a slow but noticeable concentration process can be seen in the Korean
farm sizes (see on Figure 2). This concentration process still goes on and might accelerate due
to the elevation of the land acquisition ceiling as well.
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Figure 2: Evolution of an average S. Korean farm size between 1970 and 2012
Source: Own edition on the dasis of data published by IM, J. – JEONG, I. (2014.)
On the basis of such historical heritage one question can be raised: how can the Korean
agricultural sector still exist and operate, even at high costs, but smoothly? How can the jobs
of 2.5 million farmers at scattered, small land be co-ordinated and organized: The answer is
the peculiar system of farmers’ co-operatives which was developed on the principles of the
farmers’ private properties (land and assets) and individual cultivation/production on their
lands.
The South Korean co-operative system
A considerable part of the South Korean farmers’ society has been gathered into co-operatives
for several decades. On lands being in private ownership the proprietor families here also run
the farms severally who as members of these co-operatives get favourable services
(consultancy/extension, product processing, marketing, banking services, etc.). It is worth
mentioning, that mainly – due to causes of profitability – the proportion of farmers’
households living not exclusively from agricultural activities, is considerable (around 25-
30%).
Among Korean farmers, respectively within the frames of village communities several
different forms of co-operation have been developed long ago for example the mutual help of
each other with labour force (mainly during the season of rice seedling and harvesting) further
the establishment of Rotating Savings and Credit Associations (ROSCA). While, the real co-
operatives in today’s sense based on private capital began to spread only by the end of the
twenties of the 20th century, during the period of Japanese colonization. The first farmers’ co-
operative was set up in 1927, and by 1930 their number grew up to about 200. The Japanese
authorities did not hinder the setting up and spreading of co-operatives because they thought
that these could intensify the inflow of Japanese capital. In this time besides the guidance of
the government other organizations were also established for instance the Financial
Association respectively the Industrial Association. The former took the role of the financing
of agricultural products the latter the buying up and processing of products, and the trade and
procurement of the means of production. There was also and Association of Farmers to the
sphere of activity of which belonged to the technological development of the cultivation (rice)
the trade and storing of products and the common procurement of agricultural chemicals.
After 1945 when the country was liberated from the Japanese domination the role and
function of the co-operatives were changed.
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The Korean War, moreover the political instability of the country kept back the passing of the
Law of Agricultural Co-operatives, thus it could be realized only in 1957. The Agricultural
Bank was established from the previously mentioned Financial Association, which became
the sole institution of product financing. From the Association of Farmers the National
Agricultural Cooperatives Federation (the NACF o fin Korean: NongHyup) was established in
1958 with the purpose to assure the large scale of services to the farmers – except granting
credits. The Agricultural Bank and NACF were merged in 1961 by a modification of the law
(LEE, J. – LIM, S. [ED.] 1999).
Subsequently, with several further organisational metamorphoses the agricultural co-operative
structure on territorial basis was formed and became typical in national dimensions being
characterized by a three-level structure of hierarchy. The basis is formed by the farm
households, functioning at local level (village). The next level means the so-called primary
co-operatives being organized at regional level, while the top of the organisational pyramid is
meant by the national federation (NACF).
The structure of the primary co-operatives
The basis of the South Korean co-operative structure is the primary co-operative, its fund is
made up of the members’, that is to say of the farmers’ financial contribution (a type of
share). It is typical that the proportion of contribution of one to each member is relatively
insignificant compared to the total capital of the co-operative. The leader of the primary co-
operative is the president elected for four years, the main organs of decision-making is the
general assembly, the assembly of delegates respectively the board of directors. The
regulation enable that members of one single farm household should not be the members of
only one co-operative but be members of other co-operatives as well, even the same person
could apply for admission to several co-operatives. Besides the regular membership it is also
possible to obtain „quasi membership”.
The organs or farmers belonging to the business activity of the co-operative dealing with
agriculture might apply for being admitted to the co-operative as quasi members. They could
also utilize the different services provided by the co-operatives however they cannot take part
in the decision-making activity of these. They are not obliged either to take up shares,
however they have to pay members’ subscription, respectively the contribution to the
operation of different projects of the co-operative from time to time. The sectoral groups
based on different products and crops are parts of the structure of the co-operative system as
organisational subordinate units. These sectoral groups are such organs in the co-operative
which deal with the production of certain agricultural crops/products respectively such organs
which were set up by farmers dealing with common marketing on voluntary basis (LEE, J. –
LIM, S. [ED.] 1999). In 2014 1155 primary co-operatives were functioning in South Korea, the
major part (1075) of which were organized on territorial basis having general agricultural
profile, while 80 of them were commodity based specialized co-operatives (NACF, 2014). In
case of establishment and functioning of commodity based co-operatives there was no
territorial rule applied (PARK, J.-S. 2014).
The organizational structure of the National Federation of Agricultural Co-operatives
(NACF)
Similarly to the primary co-operatives, NACF also has president, general assembly, which is
practically an assembly of delegates. Its members are 291 elected presidents of co-operatives,
furthermore there is a board of directors. The NACF holds an annual session of general
assembly and in case of necessity it can hold extraordinary sessions too. The NACF provides
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services to its members on a large scale. Among these mention must be made about two main
areas: agricultural marketing, and the banking and insurance services. Besides technological
consultancy (extension) they provide training-education, input supplies to the production
(agricultural chemicals, machinery, etc.) belong to its profile. Besides the head office of
NACF which is located in Seoul, there are 16 regional directorates, 156 municipal bureaus,
724 bank branch offices, 14 subsidiaries, four foreign representations. In 2014, 1.155
agricultural co-operatives belonged to NACF having altogether 2.35 million farmer members
(NACF, 2014), the latter being compared to the total rural population (3.5 million) it can be
said that the roughly the two third of the rural population work in the frames of agricultural
co-operatives.
The main sectors of the agricultural production
Rice dominated plant production
The most important crop in South Korea is rice, accounting about 90 percent of the country's
total grain production. Korean farmers can’t be competitive rice producers at the world
market. Besides the mentioned reasons (farm structure) and climatic reasons (in Korea only
one harvest can be annually, while in Southeast Asian tropical zones even three times can be
harvested per year). Therefore, the government provides them with massive subsidies from
the government to the producers. Figure 7 shows an international comparison on agricultural
subsidies in the world in terms of an estimated amount of producer support (in billion USD),
and also the ratio (in percentage) of the value of subsidies comparing to the gross farm output.
It can be seen that in 2003 the European Union (15) used to spend 121 billion USD supporting
agriculture, the United States lavished 39 billion USD on its farmers while Japan, South
Korea, Iceland, Norway and Switzerland all provided farm subsidies that were well over half
of national farm output (Economist, 2004). On Figure 3 it can be seen that in 2003 South
Korean farmers received 17 billion USD subsidies. Nowadays the total annual sum of
agricultural subsidies is over 20 billion USD, respectively from January 2015 when the
amount per hectare subsidy on rice was increased to 1 million KRW (cc. 954 USD) (FAO
2014). It can be said, that also in Korea, Japan and some other countries it is also true what
ERDEINÉ KÉSMÁRKI-GALLY underlined in case of the European Union that EU that funds have
much greater significance for agricultural companies than for businesses in other sectors since
standard EU subsidies have become a major contribution to agricultural income (ERDEINÉ
KÉSMÁRKI-GALLY Sz. et al. 2015). Korea still has been imposing strong import restrictions in
case of rice and other commodities, however, due to the obligations set by WTO (World
Trade Organization) Korea recently had to provide a minimum market access for rice
importers. Figure 3: Agricultural subsidies in the world
Source: Economist (2004) on the basis of OECD data
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According to the analysis of the Economic Research Service of the United States Department
of Agriculture the two major goals of South Korean agricultural policy are self-sufficiency
and parity between farm and urban household incomes. The Government uses direct payments
and import barriers to achieve these dual goals. Domestic production of rice, barley, corn,
soybeans, and tobacco is subsidized to varying degrees. High import barriers protect rice,
barley, vegetable, fruit, and livestock farming. Imported inputs such as wheat, feed grains,
oilseeds, hides, and cotton, however, are allowed easy access (USDA, 2015). Rice is still the
main staple crop in Korea, however, due to the changing lifestyle, the growing incomes in the
industrial and service sectors and purchasing power, the infiltration of western consumption
models had a noticeable impact on the food consumption habits, especially in bigger cities.
Therefore, the consumption of rice shrunk during the recent decades while the demand for
vegetables, fruits, other cereals, dairy and meat products grew. Figure 4 shows the main
parameters of Korean rice production during the recent decade. It can clearly be seen from the
diagram that the total volume of rice production shrunk between 2005 and 2015 from a level
of almost 5 million tons to about 4.0 – 4.2 million tons. At the same time the cultivation area
of rice shrunk from 1 million hectares to nearly 800 thousand. The average yield (kg/ha)
fluctuated during this period, however by 2013-14 its value became higher than it used to be
in 2005. It could be a result of the improving agricultural technology, however due to the
fluctuating curve, it can even be considered as a result of weather conditions as well. Besides
rice, a range of other crops are cultivated in Korea, like barley, wheat, potatoes. Many types
of vegetables (cabbages, radish), and fruits (tangerines, other citrus fruits, pears, persimmons,
strawberry, etc.) are grown. For Central European eyes the Asian pear (nashi), persimmon,
jujube, tea, ginseng can be seen as local or regional specialities. During the recent two
decades a diversification process has been going on in the South Korean agriculture. People
do not simply want to eat enough quantities of foodstuffs but there is an increasing demand
for healthy food, and instead of taking more carbohydrates, they demand more protein and
vitamin-rich foodstuffs.
Many kinds of vegetables and fruits became beneficial cash crops for producers. Some of
these crops are even exported for example to Japan and to the United States. An interesting
change can be seen in the suburbs of towns and cities, nowadays one can see endless rows of
greenhouses and less paddy fields than it used to be before. Mention must be made about the
fact that Korea – like Japan - one of the world’s biggest importer of GMO (Genetically
Modified Organisms). Imports arrive mostly from the United States, and not only for human
consumption but also for animal feed. (CHOI SUNG-JIN 2015).
Figure 4: Main parameters of South Korean rice production
Source: Own editing - on the basis of MAFRA data
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In 2014, the amount of genetically modified food imported to South Korea surpassed 2
million tons for the first time. According to Korea Bioinformation Center 2.07 million tons of
foodstuffs containing GMOs were imported by South Korea in 2014 (as of the end of
November). The majority of the genetically modified food was farm produce, including corn
(1.1 million tons) and soybeans (970,000 tons). Genetically modified soybeans are generally
used to make cooking oil, while corn is typically turned into sweeteners. Total imports of all
genetically modified organisms (GMOs), including animal feed, increased from the 7 to 8
million tons of previous years to around 10 million tons (CHOI SUNG-JIN 2015).
South Korea signed the Cartagena Protocol on Biosafety to the Convention on Biological
Diversity (Cartagena Protocol) in 2000 and ratified it in 2007. The Cartagena Protocol
became effective for Korea at the beginning of 2008. To implement the Protocol, Korea
enacted the Act on Transboundary Movements of Living Modified Organisms and Other
Related Matters (LMO Act) in 2001 and it became effective when the Protocol became
effective in Korea. The LMO Act aims to improve the living conditions of people by
protecting public health and the conservation and sustainable use of biodiversity from any
adverse effects posed by genetically modified organisms (GMOs). As of today, while research
and development related to GMOs is actively conducted, there has been no authorized GMO
cultivation within Korea (Restrictions … 2015).
Animal husbandry
Animal husbandry is traditionally a supplementary occupation in the Republic of Korea,
however it expanded rapidly during the 1970s and 1980s. Korean farmers breed cattle, pigs,
chicken and other types of poultry while other animals, sheep, silkworm and others are
marginal.
The development of South Korean cattle livestock between 2000 and 2015 is shown on Figure
5. It can be seen that the overwhelming part of Korean livestock is beef cattle which showed a
gradual increase between 2003 and 2012 while in the recent three years a slight decrease
happened. The total number of cattle ranged above 3 million, while the number of dairy cows
slowly but gradually shrunk from 500 thousand to around 400 thousand.
Figure 5: Number of cattle in South Korea
Source: Own editing of data of Statistics Korea (KOSTAT)
Figure 6 shows the number of pigs between 2000 and 2015. It can be seen that the pig stock
showed a gradual increase from 8 million to slightly above 10 million. In the years 2010 and
2011 there was a drop, caused by mouth and foot disease (STRAK, J. 2015), however from
40
2012 the growing trend seems to be continued. The various changes in agriculture and food
policy and the disease outbreaks have affected the structure of the Korean pig industry. South
Korea produces about one million metric tonnes of pig meat each year. Although pig farm
numbers have declined there has been a steady increase in total swine numbers. Overall, the
Korean industry is in a transformation phase as older less efficient small pig farms go out of
business and larger, modern units come into production (STRAK, J. 2015).
Figure 6: Number of pigs (1,000)
Source: Own editing of data of Statistics Korea (KOSTAT)
Figure 7 shows the development of chicken stock between 2000 and 2015. The number of
chicken increased from a basis of 100 million to 160 million during this 15-year period. It can
also be followed that the reason of this increase was mostly the growing number of broiler
chicken, while the number of layers (the egg producing chicken) also grew in a modest extent.
It was already mentioned that during the recent two decades there were gradual changes in the
lifestyle, including the food consumption habits of the South Korean society – especially in
case of the city dwellers. The increasing incomes of the family households, the increasing
employment of women, and the acceptance of foreign (western) consumption patterns,
especially in the young generation generated demand for food products which used to be
almost unknown in the traditional Korean diet.
Figure 7: Number of chicken (1,000)
Source: Own editing of data of Statistics Korea (KOSTAT)
41
Figure 8: Changes in per capita food consumption in South Korea (kg/capita)
0
50
100
150
200
250
300
350
400
450
500
1970 1980 1990 2000 2012
Milk
Chicken
Pork
Beef
Fruits
Vegetables
Soybean
Maize
Wheat
Barley
Rice
Source: Own editing - on the basis of MAFRA data
Figure 9: Changes in the agricultural production value in South Korea (1985- 2005)
1985 2005
Source: Own editing - on the basis of OECD, 2008, (data of MAF Statistical Yearbooks)
In the past consumption of milk and dairy products were not common in Korea and in
majority of East Asia. Figure 8 shows the changes in per capita food consumption in various
categories of foodstuffs in South Korea between 1970 and 2012. It can be seen that meat
(beef, pork, chicken) grew, as well as the consumption of fruits and vegetables as well. The
consumption of rice and barley decreased, while other cereals, especially wheat shows
growing trend. The overall amount of food intake has also grown since 1970 by 2000.
However, after 2000 it shows a slight decrease.
Figure 9 shows the changes in the structure of the agricultural production (value) in South
Korea between 1985 and 2005. It is worthwhile to make a comparison between data of
Figures 8 and 9 to see how Korean agriculture (in production structure) could follow the
changing demands in food consumption. As it could be expected, by 2005 the share of rice
considerably shrunk, while the same of beef, pork, milk, eggs and other livestock, fruits and
vegetables grew.
Conclusion
South Korean agriculture is on the way of transformation. At present the main driver of the
sector is the growing and diversifying domestic demand for food. The overall performance of
Korean economy (the industrial and service sectors) has still been a solid basis of a successful
national economy. Growing purchasing power and living standard are preconditions for the
42
further development of the Korean agricultural sector. The complex network of co-operatives
has been operating well, and by its multitasked co-ordinating, supplying and servicing
activities provide the fundament to the efficient farming. The structure of the agricultural
production could follow the changing food consumption habits – less rice, cereals, but more
animal products, fruits and vegetables. The domestic demand can be covered from rice, but
most of other products are to be imported even for longer run. Several kinds of fruits,
vegetables are competitive on international markets. In longer run Korean farmers will need
to face foreign competitors both at domestic and external markets. In spite of the above
mentioned positive facts and changes, Korean agriculture needs further adjustment by the
agricultural and environmental policy regulations. There are tasks which are very timely and
need urgent actions from policy-makers. One of them is the reduction or elimination of the
income disparities between rural and urban households to prevent further migrations from
farms to the cities. Another sensitive issue to be solved is the aging of farmers. Additional
incentives are badly needed to encourage the young generation to be farmers (first of all the
children or grandchildren of the present aging farmers) to continue with farming, instead of
giving it up for another job. In a densely populated country, like South Korea the
environmental issues of farming are also very sensitive. Reducing the use of fertilizers and
pesticides, the expansion of environmentally friendly farming, a good management of
livestock manure are also timely challenges. The improvement of rural infrastructure and to
use additional income-generation possibilities of rural areas, like development of agro-tourism
are also worthwhile to mention. Agro-tourism has been intensively growing in Korea, there
are many regions or localities which have their own famous products, like Geumsan or Seosan
(ginseng) or Gimje or Icheon (rice) which give good opportunities for local food festivals
combined with folk-shows and other tourist attractions.
References:
Bajpai P. (2015): Emerging Markets: Analyzing South Korea's GDP
Investopedia, September 11, 2015 (Date of access: 03.05.2016.)
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Author
Dr. habil. György Iván Neszmélyi Ph.D. associate professor
Budapest Business School – University of Applied Sciences
Faculty of Commerce, Catering and Tourism, Department of Commerce
H-1054 Budapest, Alkotmány u. 9-11. Email: neszmelyi.gyorgy@uni-bge.hu
Honorary Professor of Szent István University Faculty of Economics and Social Sciences/
H-2100 Gödöllő, Páter K. st.1.
