Research Reports
The Fruit and Policy Task of the Consumers Co-operative's business in Korea
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AuthorJeong, Eunmee
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Publication Date2011.11.30
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Original
The purpose of study is to draw the significance of C.C's business in Korean society and to present policy task that is needed to promote sustainable agricultural production and consumption by analyzing the fruit such as establishment of infrastructure of C.C's business and the influence that C.C's business has on agriculture and farmers.
C.C has performed mainly centering on two axises namely business that aims to provide eco-friendly agricultural products to C.C's members and activities of organization such as consumer initiative for safe food and promotion of consuming eco-friendly agricultural products. The relation between sustainable agricultural production and consumption shown in C.C's business is as follows.
First, C.C enhances stability of production by increasing contract cultivation and operating production & price stabilization fund with consumers. C.C secures economic efficiency by reducing unnecessary distribution cost through establishment of national distribution system and efficient distribution which enables producers to stably produce farm products and C.C's members to purchase agricultural products at reasonable price.
Second, C.C secures safety by establishing transparent and fair transaction system such as attestation system and distribution system certification and supplying consumers with eco-friendly agricultural products. C.C has secured loyal customers without sales promotion by supplying reliable and good quality products to customers.
Third, C.C is taking the initiative in protection of the environment by actively participating in promotion to increase the consumption of eco-friendly agricultural products and food safety. As a matter of fact, keen interest in protection of the environment led C.C to be born. Environment - conscious consumers support sustainable production and consumption, producer's economic efficiency and consumer's safety.
C.C has established win-win system between producers and consumers through efficient business and organization for the 20 years. C.C has established self sufficient economic system and consolidated production, distribution and consumption through efficient distribution system and cooperation between producers and consumers based on strong trust between them. In addition, C.C has contributed to increasing production of eco-friendly agricultural products and transaction by raising production and price stabilization fund to promote sustainable production by increasing contract cultivation of eco-friendly agricultural products.
The fruit of C.C's business can be utilized to prepare agricultural policy society that aims for sustainable agricultural production and consumption should have. Suggestions to utilize fruit of C.C's business are as follows.
First, producers and consumers should be effectively organized for sustainable transaction. Producers make an effort to produce high quality agricultural products by focusing on production & quality management and consumers participate in promotion activities that aim to form farm product prices that enable producers to make ends meet.
Second, contract cultivation should be encouraged and supported in order to enhance price stabilization and direct transaction. As contract cultivation requires strong trust between producers and consumers, lots of efforts to build trust are needed. Thus, organizational structure of agricultural cooperative should be improved according to business method. For example, item-based agricultural cooperative can be helpful in maintaining production and getting producers together such as management of supply and demand and exchange of production and technology information. Regional agricultural cooperatives can be helpful in building a strategic foothold for exchange with consumers and maintaining rural community.
Third, price stabilization fund should be operated so that government, local self-governing body and consumer can bear production risk by improving present farm-product price system in which only producers bear production risk. It is necessary that item-based agricultural cooperatives should take charge of contract cultivation which is conducted by regional agricultural cooperatives to raise fund for stabilizing supply and demand. In addition, it is necessary that the fund for stabilizing farm-product price should be used to relieve price fluctuation caused by production risk.
Fourth, social cost should be reduced by improving national agricultural product distribution system. In the past, price was determined by direct contact between purchasers and producers but at present pricing and transaction are possible over the phone. The separation of upstream and distribution is important in enhancing logistics efficiency. The establishment of new information system is needed to separate upstream and distribution in transaction of agricultural products. The development and utilization of reliable information on supply and demand are required to boost transaction as limited information on supply and demand can have a negative influence on transaction.
Researchers: Jeong, Eun-Mee, Dong-Hoon Kim, Kim, Moon-Myoung
E-mail address: jeongem@krei.re.kr
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