The Korean government had tried to maintain agricultural product prices at the low level to keep wages low and thus stabilize industrial commodity prices for sustaining international competitiveness. As a result, the Korean agriculture now faces a dee...
The Korean government had tried to maintain agricultural product prices at the low level to keep wages low and thus stabilize industrial commodity prices for sustaining international competitiveness. As a result, the Korean agriculture now faces a deep crisis. In addition, the import liberalization of the agricultural commodities and the reduction of the domestic agricultural support level caused by the Uruguay Round agricultural negotiations will deepen the crisis.
The objective of this study is to provide policy directions for the achievement of the price policy objectives such as the reduction of price and income instability, the increase of the food self-sufficiency, and the enhancement of the level of prices and incomes. The major findings of the study are summarized as follow :
1. By 'Agreement of Agriculture' of UR and 'Schedule' of Korea. "Total Aggregate Measurement of Support(AMS)" will be reduced from 1,719 billion won to 1,490 billion won(the reduction of 13.3 percent) during the implementation period(1995∼2004). However, if the government minimizes the agricultural import by the measures such as 'special safeguard provisions', 'sanitary and phytosanitary measures', 'countervailing duties', 'state trading enterprise', etc. and maintains the current level of the domestic support by the measures such as 'more favourable treatment for developing country', 'domestic support policies for which exemption from the reduction commitments : public stockholding for food security purposes, domestic food aid, direct payments to producers, decoupled income support, etc.', and 'De-minimis', the price policy could be continued at the current size and level.
2. Ten years' grace period might be the last opportunity for the survival of Korean agriculture. The price and the quantity of the government procurement should be kept at the proper level so that the farmers only concentrate on the commodity choice and production management, just like the agricultural price policy programs of the EU and the U.S.
3. Price policy is still important for the coordination of the time lag between the structural adjustment and the cost-down, for the provision of personnels in charge of the structural adjustment. And the price policy should not be subordinated to the structure policy and the general price control policy.
4. For the balanced development of agriculture, the system of goal and measures by commodity should be established and the level and balance should be implemented to the price and profitability by commodity.