| A Study for Supporting the Development of Medium- and Long-Term Strategy of Overseas Agricultural Development | |||
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| Author | Lee, Daeseob | ||
| Views | 65345 | Publication Date | 2018.03.14 |
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Background of Research As international grain prices skyrocketed in 2007~2008 and 2011~2012, the necessity of reconsideration of grain supply structure has been raised, and discussions on strengthening food security through overseas agricultural development are continuing. Originally 35% of domestic grain consumption was targeted to be procured from abroad by 2021. However, grain imports from overseas agricultural development were way below the target due to various reasons such as the lack of distribution and logistics infrastructure of the countries in which investment was made. Therefore, the government reflected the current status and reduced the carry-in target from overseas agricultural development to 10% of domestic consumption (to 1.38 million tons by 2018). Although the number of enterprises making overseas agricultural investment is increasing, the government's strategy to support overseas agricultural development has been limited due to the fact that the carry-in of grain from those countries was low, and the budget for loans and subsidies for the enterprises was continuously reduced. In this context, based on the understanding of the agricultural development policy of the target country and the current state of overseas agricultural development policy in Korea, a new strategy for the 2nd phase of the comprehensive plan on the Korean overseas agricultural development and supporting measures are suggested. In addition, a way to utilize ODA for overseas agricultural development and related action plans are introduced. Method of Research This research on overseas agricultural development has been carried out through the review of the previous studies: 1) outline of overseas agricultural investment/performance by Korean enterprises and 2) types of overseas agricultural investment and their international significance. Secondly, in order to grasp the current state of overseas agricultural development by Korean entities, the statistics of the companies’ economic activities are analyzed. In addition, the results of the survey conducted on those companies in 2016 by KREI were analyzed. Then the agricultural development strategies and related supporting policies of major target countries were compared to each other after deriving their development needs in the agricultural sector. Furthermore, the cases of major countries’ overseas agricultural investment, such as Japan, China, the Middle East are reviewed and implications are derived for establishing medium- and long-term strategy of promoting overseas agricultural development for Korea. Research Results and Implications For overseas agricultural investment, 169 Korean companies have entered into 29 countries in various regions including Central and South America, North America, Central Asia, Southeast Asia, Russia (Far East), Africa and Oceania. For example, the agricultural products that were invested in Southeast Asia include cassava, mango, corn, coffee, cashew nuts, beans, bananas, and palm oil. This shows that the entrants tried to convert and diversify business items to maintain profitability and to enhance sustainability of their business. In other words, the 2nd phase of the comprehensive plan for Korea’s overseas agricultural development needs to consider related supportive programs including high-value-added items, related production activities, and the promotion of the agricultural industry that encompasses its whole value chain. Most of the accomplishments of the 1st comprehensive plan of supporting overseas agricultural development were achieved in Northeast Asia and Southeast Asian countries (Russia's Far East, Indonesia and Cambodia). Since 2017, the targets of Korea’s overseas agricultural development has shifted from strengthening food security to supporting agro-businesses’ extension to overseas, particularly supporting private enterprises. The Korean government's strategy for the first phase of the comprehensive plan (2012-2021) of overseas agricultural development and its actual implementation were not properly connected and coordinated. As there was a lack of linkage between strategies for achieving the goals and supporting measures (with financing), the second phase of the comprehensive plan needs to strengthen the link between the components of detailed projects and the government’s loan related regulations. In that sense, there are some aspects that need to be considered in establishing Korea’s medium- and long-term strategy for promoting overseas agricultural development. Firstly, the private sector's entry into the overseas agriculture sector should be promoted thoroughly to strengthen Korea’s agriculture industry. Particularly, when the entry of private enterprises is promoted, the development of entire value chain of target countries’ agricultural industry should be analyzed, including production and distribution of agricultural products, agricultural machinery, post-harvest management and technology, and input. In particular, both governments need to try to reduce the uncertainties and risk factors that concern private companies through support policies. In the future, the structure of overseas agricultural development projects needs to be divided into public projects to strengthen the food security of the nation and agro-business extension that supports the profit generation of the private enterprises so as to comply with the purpose and the definition of the overseas agricultural development law of Korea. In the public sense, overseas agricultural development projects should be pursued in the long run with the purpose of strengthening national food security and self-reliability for future generations. However, considering the competence of the agricultural public corporation of Korea, it is necessary to utilize the public sector which has the capacity to understand and utilize the dynamics of the futures market and/or the international grain market. Considering the size of government support and its inherent budget limitation, overseas agricultural development needs to focus on certain areas by selecting and concentrating on specific items (grain, bio-energy, raw materials, etc.) and/or high-income crops thereof. Concerning technical support for Korean companies, it would be appropriate that the support for overseas agricultural development is promoted through the establishment of new “Agricultural Support Centers”, which can be promoted as a subsidy project, and through strengthening cooperation with KOPIA centers in each country. In the medium and long term, the revitalization of overseas agricultural development by expanding recipient groups to be supported and financed should be the first priority to improve the conditions to encourage the participation of private companies. In addition, the details of the subsidy program should be restructured considering the demands of private companies with willingness to invest in the overseas agriculture sector. In order to carry out the proposals and action plans proposed in this study, the support system for overseas agricultural development such as related laws and regulations should be reformed. In particular, the second comprehensive plan should expand the scope of its target business so that the purpose of the strategy can be achieved effectively. As the scope of overseas agricultural development projects is expanded, the demand for know-how and technologies for various fields such as production, post-harvest management, distribution, sales, and management in the agriculture sector will increase. Therefore, the existing system of technology support needs to be restructured as well. Researchers: Lee Daeseob, Choi Yongwoog, Lee Yoonjung, Ahn Gyumi, Seok Hyundeok Research period: 2017. 1. ~ 2017. 12. Email Address: ldaeseob@krei.re.kr |
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