The various and the reliable statistics indicate that the income distribution of the farming sector in a country is inferior to the other sectors. This conclusion is also applicable to Korean farming. According to the statistics, the ratio of the farm...
The various and the reliable statistics indicate that the income distribution of the farming sector in a country is inferior to the other sectors. This conclusion is also applicable to Korean farming. According to the statistics, the ratio of the farmer's income to the non-farmer's is 65 per cent in 1961. Many factors play their roles for making pressure on the farmer's income. This article primarily intends to analyse the inferiority of Korean farming which is reflected on the price mechanism. The analysis has been carried out following order and reached the conclusions as follows:
(1) The Inferiority of the Farming Products in Price.
(ⅰ) The farmers in Korea are producers but not entrepreneurs. They have little knowledge on marketing for their products. On the top of it, the farming, in its nature, is the industry involving severe competition among themselves. Therefore, the market of the agricultural products is likely to be a buyer's market but not a seller's
(ⅱ) All agricultural products are organic substances, and the period of cultivation is required in the production. In addition, the harvest seasons may not be arranged equally all the year round; the output cannot be controlled at the process of production without the waste of capital. These characters finally bring the conpetitions among the farmers and make pressure on the price of agricultural products.
(ⅲ) The price of ariculutural products is determined at a low level, in the case of excess supply, because of the inelasticity of price and income for demand.
(ⅳ) When the agricultural products are purchased by an industrialized country, the farmer of exporting country may not avoid the effect of crisis which is occured in the industrialized country.
(ⅴ) Agricultural products are usually not demanded by the people of the producing area. Therefore, a large sum of cost is needed in the process of circulation and brings a pressure on the farmer's income.
(2) The Inferiorial Income of the Farming by the Forced Supply.
(ⅰ) More than 75 per cent of Korean farmers owns the land less than one hectare. It means that the farmers little have surplus for sclling, if they consume their products without the thrifit, though they sell a large amount of products every year. In other words, their need of money is so eager that they must sell the products even at the low price which is one of the causes of farmer's poverty. In short, the forced supply of products by the need of money may not offer the chances of good price to the farmers.
(ⅱ) The forced supply of agricultural products above mentioned is accelerated by a large number of the disguised unemployment which counts 25 or 30 per cent of farming labors.
(ⅲ) Korean farmers do not run farming along the money-making production while their consumption is run by money except for their products. Accordingly, the gap between their money income and money expenditures is gradually enlarged, and they have been under the pressure of poverty.
(ⅳ) The forced supply of agricultural products accelerates the pressure on the price through the excess supply in the harvest season or the following season.
(3) The Pressure on the Agricultural Products by the Government Price.
(ⅰ). In Korea, the government has collected a large amount of agricultura poducts every year since 1939 at the low price by the force.
(ⅱ) Because the purpose of the collection is mainly to check the causes of inflation and a cheap cost of living, the government price is low in extend that it hardly compensates the cost of production. Therefore, the low level of government price always exploites the farmer's income.
(ⅲ) The low level of the government price affects on the low level of market price, otherwise the market price would be high in the harvest seasons.
(4) The Inferiority in the Circulating Process.
(ⅰ) Korean farmers, as the other Asian underdeveloped countries, sell a part of their products before the harvest season t times. This fenomenon is an expoitation by a usury and it is one of the causes that make the farmers poor.
(ⅱ) In agricultural products, the producing area may not be a consuming area in most cases. The products are usually sold at an urban. Therefore, the cost of circulating of the products is relatively higher than the products of the second industry. The cost of circulation is ultimately paid by the farmers but not by the consamers.
(ⅲ) The various intermediate processes, cost of transportation, and the lack of market for farming products in the producing area may be raised as the reasons of high cost in circulating process.
(ⅳ) The price of products of the second industry is also high at the rural area because various costs in circulation are added, and the costs are paid by the farmer's income. In short, the farmers sell their products at a low price while they must purchase urban commodities at a high price.