For steady development of organic farming, benchmarking is required for diagnosing and assessing the production and distribution sector, creating organic farming clusters and benchmarking overseas cases. In this context, this study describes five challenges of analyzing current management by organic farmers with respect to production and distribution: analyzing organic farming management performance in major countries, analyzing current management of organic farming clusters, analyzing the current market for organic farm product distribution and proposing a method of improving competitive power in the price of organic farm products.
The abstract of this study is described below.
Firstly, the results of analyzing management performance by organic farmers showed that organic farming of higher technical efficiency resulted in more output and less input and organic farmers of higher technical efficiency achieved higher eco-efficiency. Therefore, it is considered that benchmarking of efficient farmers who practice organic farming is required in order to improve efficient management of organic farming.
Secondly, a comparison and analysis of management performance by organic farmers in Korea and other countries showed that organic farming exhibited less yield per unit area than conventional farming, and higher farm product prices than conventional farm products. The reason for less-yield per unit area is thought to be a result from less-yield due to non-application of chemical agricultural materials. Analysis shows that appropriate soil management and stabilized cultivation technology contributes to some recovery of yield as farmers accumulate more experience in organic farming.
Thirdly, an analysis of management practices in major countries showed that appropriate support systems, including direct payment for ensuring organic farmers' income, are required and suggests it is necessary to propose schemes for providing consulting for improving individual farmer's management. These results suggest that a certification system for reliable organic farm products should be operated in order to have more price premium for organic farm products.
Fourthly, investigation of benchmarking cases showed that in order to establish efficient organic farming it is important to ensure seed quality, to develop a variety of methods of weed-killing for reducing production cost, to have schemes for preventing green algae after applying compost, and to construct a system for efficient management and storage after harvesting, and a system for supplying quick- release side dressing.
Fifthly, for continuously developing organic farming, it is necessary to supplement a direct payment system for organic farmers and it is desirable to switch to a system that generally considers production cost, income and net income in estimating the unit cost for supporting direct payment. The period for converting general conventional farming to organic farming depends on items and technical levels, but takes approximately three to five years. Therefore, it is desirable to supply grants for maximum of five years. Since settlement of organic farming contributes positively to conservation of soil, water quality and biodiversity, it is desirable to provide direct payment of a given amount per ha for supporting contribution to environmental conservation 5 years after practicing organic farming in the event that it is decided to provide a complete settlement for organic farming.
Sixthly, important requirements for forming organic farming clusters include securing land, a systematic support system, sufficient resources and good information infrastructure, etc. It was shown that organic farming clusters contribute to income increase and development of local farming. It is thus necessary to select areas of high possibility for creating organic farming clusters when selecting a eco-friendly farm area covering a wide region and to have training programs for sharing related information for developing organic farming clusters and programs for visiting well developed organic farm areas. It is also necessary to develop and carry out plans for creating organic farming clusters in areas covering wide regions, to construct a system for a university-industry-government information sharing network, to promote natural resources cycling agriculture, and to promote processing businesses so that the organic farming clusters can stably create profits and develop as a major promoter of growth in various regions.
Seventhly, analysis of demand for organic farm products showed that consumption thereof will continue to grow in the mid-term and long-term, but is gradually decreasing or stagnant in a short term. This is a result from instability and non-transparency of the production-processing and distribution- consumption chain, low reliability resulting from low quality due to increase in quantity focusing on low agricultural chemical farm products, a multi-step certification system and violation of criteria, less satisfaction in the desire for healthy food, restricted possibility for purchase, and consumers' complaint for high price. Another obstacle was positive marketing for organic farm products by large food supermarkets, e.g., insufficient experience in organic farm product marketing resulting in little desire for investment in organic farm product marketing.
Lastly, the result showed it is necessary to improve the organic farm product certification system for increased reliability and trustworthiness on the market, to provide reliable information and secure reputation capital, to cooperate with environmental organizations, to carry out independent examination and certification, to establish regulations for supporting organic farming, and to develop marketing promotion policies, in order to solve problems in the organic farm product market.
For vitalized distribution in the organic farm product market, it is necessary to promote a positive image of organic farming, to support companies that can handle risks and to enhance marketing capability.
With increasing people's interest in safe farm products and environmental conservation in the agricultural ecosystem in Korea and other countries, more emphasis is laid on the importance of organic farming and it is thus predicted that organic farming will continue to grow for a significant period of time as a promoter of growth for future agriculture. Therefore, if practical programs are developed and promoted in terms of production and distribution of organic farm products presented in this study, organic farming will steadily grow. It is considered necessary to analyze management performance in terms of production and to study development of marketing strategies in terms of distribution on the basis of detailed data from farming books recorded by organic farmers and about distribution by each farmer as a key challenge in the organic farming sector.


Researchers: Kim Chang-Gil, Jeong Hak-Kyun, Lee Myung-Ki, Jang Jeong-Kyung, Kim Tae-Hoon, Yoo Duk-Kee, and Jae-Hyun Hwang,
Research period: 2008. 3. - 2010. 12.
E-mail address: changgil@krei.re.kr