Background of Research
This study used an input-output analysis model to analyze front and rear correlations of agro-material industry and agriculture sector, and industrial correlations of agro-material industry and agriculture sector were mathematically measured.

Method of Research
In this study we examined the level of influence of the cost changes in agro-material industry and increase in international crude oil price and domestic petroleum products prices to see how much they affected the costs of agro-material industry, agriculture sector and other industries including agriculture. From the analysis conducted focusing on production inducement model, the following results were obtained.

Research Results and Implications
The result of front production inducement coefficient taking agro-material industry as a center revealed that in most cases the remaining agro-material industry except fertilizer industry did not use the products from agriculture as intermediary goods. The result of analysis carried out based on the assumption that demand for 100 million won was increased using exogenous variable of agro-material industry sector revealed that the influence of nitrogen compound to production increase of its own sector and other industry sectors was the biggest among agro-material industry.
A secondary analysis of demand-not-served effect was attempted using a supply side model. The result of analysis revealed that nitrogen compound of the agro-material industry has the biggest influence on the whole industry including agriculture and food and beverage industry and that the decrease in supply of nitrogen compound equivalent to 100 million won would cause decrease in production by 95 million won throughout overall industry.
Out of added value items, the ripple effect of the changes in manpower cost to the prices of the products of its own sector was measured. The result of analysis revealed that seed and seedling sectors were most significantly affected by the changes in its own sector's employee compensation while the sector which was affected least was agricultural pesticides sector.
Next to feed industry, fertilizer, nitrogen compound, agricultural pesticides, agricultural machines, seed and seedlings were high in order of influence.
In this thesis, we also attempted to analyze the influence of the price increase of domestic petroleum products and imported crude oil to whole domestic industry including agro-material industry. In case domestic petroleum product(fuel oil) price increases by 10%, the product which is affected the most in agro-material industry is nitrogen compound resulting in a price increase of 6.37%. Following nitrogen compound were fertilizer(increase by 0.54%), agricultural machinery, seed and seedling, agricultural pesticides and feed in order of price increase.

Researchers: Hyun-Tae Park
E-mail address: htpark@krei.re.kr