Research Reports
Inorganic Fertilizer Industry Trend and Development Plan: focusing on improving the supply system
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AuthorPark, Kihwan
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Publication Date2012.12.30
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Original
Background of Research
Fertilizer is a product of the agro-materials industry which has played a considerable role in the accomplishment of food self-sufficiency. Recently, however, the fertilizer industry is showing a significant decrease in consumption due to the shrinking of agriculture, expansion of cultivation area for eco-friendly agricultural products, and the government policy to reduce fertilizer consumption. As a result, the enterprise operation ratio of the industry is also decreasing.
Method of Research
The objective of improving the inorganic fertilizer supply system which was set based on the identified supply situation and pending issues can be further divided into stable supply of inorganic fertilizer and establishment of fair trade, and the concrete improvement plan under the objective is as follows.
Research Results and Implications
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 the unit price subject to bid.
Second, for the preparation of stable procurement plan for raw materials for of fertilizer, it is necessary to prepare systematic and comprehensive measures such as 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 of 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: Ki-Hwan Park
E-mail address: kihwan@krei.re.kr
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