Research Reports
Strategies for Reforming the Korean Rice Marketing Structure
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AuthorSung, Myunghwan
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Publication Date2010.10.01
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Original
The research tries to find a reform measures of market-oriented rice marketing structure upon reviewing current status and issues of the domestic rice industry. Purpose of the research is to propose measures, which may virtualize functions of the domestic rice market and control demand and supply autonomously. For this, the research suggests establishment of a large scale rice marketing company, introduction of the future trading in rice industry and establishment of Database to promote rice process industry.
Rice Processing Complex(RPC) tends to be small in scale and many in number, which results in high cost and low efficiency; thus its handling quantity is small and it is weak in dealing and negotiation. Therefore, there is a need to rearrange the production and marketing structure by verticalizing from production to sales, and revert the old production-oriented system into the new market-oriented system. To enable such structure, there is a need to establish the rice marketing company to improve marketing efficiency and expand negotiation power.
Once the rice marketing company is established, it may compete with Agricultural Association RPC, and private RPC that worries smaller market share may against the establishment. Therefore, establishment of such company shall be based on voluntary participation of concerned parties rather than the government lead. Under the assumption that such precondition is satisfied, the research proposes a establishment measure of the specialized rice sales corporation and the rice sales marketing corporation.
According to throughout analysis of feasibility of the rice future trading, rice is not suitable for future trading under the current circumstances. To enable the rice future trading, there shall be enough rooms to bear price fluctuation and flexibility of the spot market, price shall be fair and competitive and the government intervention shall be minimized. The research proposes the advisable planning method of the rice future trading upon the assumption that such preconditions are satisfied. For the future trading to be successful, terms and conditions of the future trading have to be as similar as possible as those of the spot trading; thus the research proposes a plan that enables future trading to be a perfect alternation of the spot trading.
Statistic materials regarding the rice process food only covers large scale imported-rice process companies only, and there are hardly any information on the companies that uses local rice nor minor process companies. Therefore, statistic survey samples were designed and implemented towards the rice process companies, which have not been statically surveyed yet to understand the rice process status. Considering the current circumstances of the rice process industry, environment of the statistic survey and limited budget, the research proposes to establish a Database of the rice process companies and a Database of the rice process goods per type through foundation of a federation that is led by the survey conductor and covers related associations.
Researchers: Myung-Hwan Sung, Tae-Hun Kim, and Ji-Yung Kang
E-mail address: mhsung@krei.re.kr
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