Background of Research
This study used 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 to the costs of agro-material industry, agriculture sector and other industry including agriculture. Also, an economic analysis was carried out using a variety of analytical methods such as Analytic Hierarchy Process(AHP), Bruce Merrifield-Ohe(BMO), IPA(Importance-Performance Analysis), and the actual inspection guideline of Rural Development Administration. The objective of the improvement of inorganic fertilizer supply system which was set based on the identified supply situation and the derived pending issues is 'the stable supply of inorganic fertilizer and the settlement of fair trade'

Research Results and Implications

The 1st subject: An Input-Output Analysis and Prices Changes in Agro-Material Industry

The significance of this research is to examine the importance of agro-material and the level of its correlation with agriculture based on ripple effect analysis of agro-material industry. The characteristics of this research is the analysis on the importance of agro-material industry in agriculture sector using demand not served model instead of the existing general production inducement effect model. Nevertheless, analysis on the level of correlation with changes in production cost for agro-material will have to be further developed through supplementation, and in the future long-term time series input output analysis is judged to be necessary.

The 2nd subject: A Study of Crop Protection Materials Industry Trends and Development Strategy: Focusing on Improving Safety Management

According to the research results, the improvement plans are as follows:
First, crop protection materials test laboratories are in cutthroat competition against each other and the problem is that they are poorly managed and their management is unsystematic. Therefore, the government should strictly manage and provide policy support to the test laboratories. It is a matter of urgency that operating guidelines are provided and disseminated to them for widespread use.
Second, the issue facing the manufacturing companies is that although their awareness of safety is rather high as they recognize the importance of developing new biological and low toxic pesticides, Korea's technology level is low compared to developed countries and the burden of developing new technologies is too high for them. They express that the government should provide aid for R&D and training of technical experts.
Third, labeling of crop protection materials is incoherent among manufacturers and containers. In many cases, labeling was not properly carried out both in terms of form and content, and it does not provide important information efficiently. Thus, there is a need to reorganize the labeling system and standardize the labels.
Fourth, the government should provide incentives and education programs to farmers and at the same time engage in PR activities so that they can better comply with the regulations.
Fifth, farmers should strive to minimize the pollution of surrounding areas of their farms when they spray crop protection materials. Korea needs to prepare regulations and guidelines for airplane spraying before it becomes widely used. In addition, incentives should be expanded to induce farmers to report their use of the chemicals when using small amount. As in developed countries, the government should strengthen the regulations on small amount use of the chemicals and provide incentives and support.
Finally, in order to relieve the inconvenience farmers experience during the management stage, a systematic collection system should be set up to pick up empty containers and dispose the residuals. In this regard, the government should take the lead and raise the awareness of farmers and manufacturers on the need to collect empty containers and dispose the residuals.

The 3rd subject: Trend of Inorganic Fertilizer Industry and its development plan - With focus given to supply system improvement plan

The objective of the improvement of inorganic fertilizer supply system which was set based on the identified supply situation and the derived pending issues is 'the stable supply of inorganic fertilizer and the settlement of fair trade', and concrete improvement plan under the objective is as follows.
First, it is desirable to reduce the kind of inorganic fertilizers subject to competitive bid in order to guarantee a part of user option and to exclude a part of incidental costs at the time of calculating unit price subject to bid.
Second, for the preparation of stable securing plan for raw materials for fertilizer, systematic and comprehensive measures including the reinforced information compilation, diversification of countries for import and the appropriation of budget for overseas market survey.
Third, programs such as loss indemnification anticipation system and 2 years disqualification of collusion companies for bid should be strictly applied, while specifying the pertinent items in the Fertilizer Administration Act in case unfair trade is not eradicated even after strict applications.
Fourth, the participants to bid are requested not to venture the bidding below a reserve price at the time of bidding on voluntary basis and to consider self-restructuring. And also the expansion of demand should be planned through the development of export market while elaborating the development of slow-acting fertilizer or functional fertilizer.
Fifth, for the mitigation of farmers burden for management cost and the increase of the portion of customized fertilizer supply, it is also necessary to consider the establishment of 'fertilizer raw material stable security committee (provisional name)' at pan-government level.

Researchers: Chang-Yong Kang, Hyun-Tae Park, Ki-Hwan Park, and Hye-Sung Han.
E-mail address: cykang@krei.re.kr