Research Reports
A Study on Strengthening the Role of Agrifood Corporations and Policy Strategies for vitalizing Agricultural Marketing in Producing District
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AuthorHwang, Euisik
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Publication Date2012.11.30
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Original
Background of Research
The role of National Agricultural Cooperative Federation (NACF) occupies an important position in the field of agricultural marketing. But since NACF's business does not cover all farmers as clients and since it does not properly satisfy farmers' needs, farmers have organized agricultural corporations to enhance their position in the distribution of agricultural products. Moreover, agricultural corporations formed the Federation of Korean Agrifood Corporation (FKAC) to jointly promote their business and improve the efficiency of shipping their products.
But, because the business conditions of local agricultural corporations has been deteriorating due to the organizational restructuring of NACF and the entry of large corporations into the business of shipping agricultural produce from farm districts, it has become an important task for agricultural corporations to improve their business competitiveness. Additionally, it has become necessary to re-establish the status and roles of FKAC.
Method of Research
In order to find out the overall business conditions and status of agricultural corporations and their problems, data analysis was conducted using the survey data of the National Statistical Office on agricultural and fishery corporations. Also, a questionnaire survey was conducted to identify the business situation of agricultural corporations that are members of the Federation of Korean Agrifood Corporation (FKAC).
In addition, a case study was conducted to learn about the experiences of the National Association of Fruit & Vegetable Distributors and Exporters (ANEEFEL) of France and suggest several ways of strengthening the role of FKAC.
Research Results and Implications
First, the business situation of Korean agricultural corporations was examined. In particular, their roles and problems concerning the distribution of agricultural produce in farm districts were identified based on the data on business situation. The identified problems are the problems that need to be addressed to increase farm size through mergers and acquisitions, improve the trading method between farmers and corporations, and change the business environment.
Next, the current agricultural corporate systems and government policies are examined. The analysis results showed that the following tasks should be dealt with: setting up of systemic development goals and directions for agricultural corporations, clear classification of target corporations by business category, and establishment and fostering of agricultural corporation management agencies. In addition, the following development measures are suggested to redefine the role of the Federation of Korean Agrifood Corporation (FKAC): clarification of the purpose for establishing FKAC, revision of membership rules, and setting up of organization and operating systems.
In conclusion, this study has found that the following measures are needed to further develop agricultural corporations: strengthening of management transparency, pursuit of economy of scale, and preparation of a plan to separate the management legislation from the legal base of agricultural corporations. Those four points are provided as the basic direction for improving overall agricultural corporations and are approached in terms of enhancing the functional capability and remedying the deficiencies of the legal system. As for the areas in which FKAC's roles should be strengthened, the following four areas are suggested: representation of agricultural corporations, management of business information including accounting standards, strengthening of consulting capabilities, and promotion of joint business projects.
Researchers: Eui-Sik Hwang, Byung-Ok Choi, Tae-Yi Kim, Kee-Hyun Lee
E-mail address: eshwang@krei.re.kr
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