Research Reports
A Study on Improving Livestock Product Distribution System for Stabilizing Inflation(Year 2 of 4)
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AuthorJeong, Minkook
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Publication Date2012.12.30
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Original
Background of Research
Although the proportion of livestock products in total consumer prices is very small, they are daily essentials with high purchase frequency and fluctuate much in demand and supply in a short period of time. We can classify the issues of price instability of livestock products which affect consumer prices into the problem of demand and supply and the problem of unreasonable distribution structure. As the importance and necessity for the stability of consumer prices are recognized more, the demand for an effective policy alternative to stabilize the price of livestock products increases. For the stabilization of livestock product prices, the government has announced policies on demand and supply and distribution structure several times already but evaluation on the effect of the policies has almost not been made to date while there is not much research being done in this regard.
This research is to be performed over a period of 4 years in total targeting the markets for beef, pork, chicken, egg, duck, milk and other livestock products (ham, sausage and processed dairy products) as objects for analysis. The 2nd year research aims to develop a simulation model that enables the measuring of the effects of diversified policies (plans) by analyzing the demand and supply and the price structure of the markets for chicken and egg out of livestock products, identify the tasks for improvement by conducting surveys and analyses of the actual state of distribution, and present a method for improving the distribution structure for chicken and egg through evaluation of distribution related policies and analysis of foreign cases.
Method of Research
This research is composed of the following chapters. Chapter 1 presents the necessity and the purpose of research, preceding research and the method of research, and Chapter 2 covers the demand and supply and price structure of chicken and egg markets. In Chapter 3, causality and asymmetry of chicken and egg prices were analyzed while the actual state of chicken and egg markets in the distribution stage was analyzed and tasks were derived therefrom in Chapter 4. In Chapter 5, surveys and evaluations were done for distribution policies for chicken and egg, and development of livestock product distribution policy model and its effect analysis were conducted in Chapter 6. Chapter 7 analyzed the poultry products prices and distribution policies of Japan and the U.S. and drew implications. In Chapter 8, a basic direction and a plan for improvement of the distribution system for chicken and egg markets were presented, and lastly summary and conclusion were presented in Chapter 9.
Research Results and Implications
The basic direction for improvement of the chicken and egg distribution system for price stabilization through this research is as follows. As chicken and egg markets were identified to have price asymmetry in each distribution stage, the problems arising from the multi-level distribution structure of poultry products should be solved and price instability should be mitigated. In order to solve these problems, first of all, distribution steps should be either decreased or integrated to increase price linkage in each distribution step. Second, a virtuous cycle structure where consumer prices react reasonably to demand and supply situation should be established. Third, the distribution system for poultry products needs to be improved toward a direction minimizing the decision-making steps of distributors.
As a plan to improve the chicken and egg distribution system, the following are required at the production stage: ① Productivity enhancement of poultry products and quality improvement of production elements are necessary. ② Producers' organization for production of poultry products and the functions of egg gathering places should be activated. ③ A cold storage distribution system and a package distribution system should be established.
At the wholesale stage, the following are required: ① Sanitation management of chicken production factory should be reinforced and the base for the export of chicken should be established. ② Processing of poultry products should be stimulated and the demand base should be expanded. ③ Egg distribution centers should be installed to stimulate distribution of eggs.
At the retail stage, the following are required: ① An egg tracking system should be built and a direct cyber trading system should be activated. ② Crackdown of rotten meat (eggs) should be reinforced and a product origin indication system should be established. Lastly at the pricing stage, the standard price for poultry products should be revised and its representativeness should be secured.
Researchers: Min-Kook Jeong, Byung-joon Woo, In Bae Ji, Woo Jin Song, Myoung-ki Lee, Kyung-Soo Nam, Chang-beom Lee
Research Period: 2012. 1～2012. 12
E-mail address: mkjeong@krei.re.kr
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