Research Reports
Policy Measures to Strengthen the Linkage Between Forestry and Food Industry: Focusing on Non-Timber Products
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AuthorLee, Sangmin
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Publication Date2009.10.01
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Original
This study suggests various schemes to make more forest products be processed, and this will result in an increase in the consumption of forest products. Survey research is the main method of this study.
Survey of manufacturers reveals that the level of processing technology for forest products is low. The ratio of raw material cost of forest products is lower than that of agricultural products, because many forest product manufacturers produce feedstock by themselves. The larger the amount of manufacture gets, however, the lower the ratio of self-production becomes. The most difficult problem in procuring feedstock is a lack of funds. Sales cost ratio is relatively high. This means that sales network is not fully established yet. Production technology is usually developed by manufacturers, and this limits an increase in the value of final products. Manufacturers sell their products through electronic or wholesale marketplaces rather than discount stores, which are consumers' favorite places to buy processed forest products. Many manufacturers do not have detailed information about government’s support undertakings.
The result of consumer survey verifies that consumption of processed forest products will increase through growing income and interest in health. Especially walnuts, ginkgo nuts, and wild vegetables are at the top of the list of products that consumers want to see them processed. Consumers obtain information about processed forest products by words of mouth. This method is not effective in advertising good points of forest products. Convenience is the most important factor in deciding purchase method. Consequently, as mentioned above, big discount stores are their favorite marketplace to buy processed foodstuffs from the forest. Most consumers check the country of origin when they buy processed forest foodstuffs. And they believe that domestic products are better than imports in quality. The price is high enough to prevent consumers from purchasing domestic products, however.
Many of government's support undertakings are focused on establishing facilities. Funds for technology development and buying feedstock, which are strongly wanted by manufacturers, are relatively small. Each government undertaking is done by itself. It is hard to verify interactions among the undertakings, which means that they are not organized well. Many undertakings related to food processing are focused on distribution rather than processing.
According to research results, the program for strengthening the linkage between forestry and food industry can be summarized as follows. First, small-size food processing companies had better merge into a big company to enhance bargaining power and management effectiveness. Second, to increase the level of processing technology, it is recommended that bases of processing facilities be built in feedstock production areas and to strengthen manufacturing functions of existing distribution facilities be strengthened. Third, it is required to build organized systems in support of processing ventures, from such aspects as technology development, public relations, and distribution to government policy. This will be a foundation of the forest products processing industry. Finally, we should devote great care not to abuse the confidence of consumers, since trust between producers and consumers is the most important factor for the success of food industry.
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