The purpose of this study is to make sound suggestions to the rural industry policy by identifying the areas for improvement concerning the rural industry support policy. To this end, this study aims to (1) evaluate the current situation and outcome of rural industry policy, (2) present measures for implementing the second indigenous local industry development project, and (3) suggest efficient ways to support rural industrialization.
According to analysis results on the performance of the indigenous local industry development project, it was found that sales of participating companies in the project have increased by 50% in 2011 from 2009 and jobs increased by 46% during the same period. The income of participating farm households has increased by 32% and exports increased by 24%. Also, an input-output analysis has shown that each project district has created a plus effect of 2.2 billion won at least to a maximum of 5.5 billion won.
The problems that have surfaced in the indigenous local industry development project are lack of legal personality for the project implementing group, unclear designation of policy beneficiaries, the implementing group's lack of capability, and limited economic feasibility of indigenous resources. Thus, it is necessary to prepare measures to achieve the following goals: reestablishment of project implementing body for indigenous local industry development, flexible distribution of working expenses, system empowerment for continuous post-management, and closing of loopholes or elimination of blind spots in rural industry support policies.
The direction of rural industry policy is set on achieving the following goals: first, establishment of short and mid-and-long term direction and goals for rural industries; second, association and separation of rural industry policies of regional(provincial) and local governments; third, expansion and empowerment of local autonomy; fourth, reinforcement of cooperation between central government ministries and system construction for cooperation between the central and local governments; fifth, construction of a rural industry system through strengthened linkage between upstream and downstream industries; and sixth, invigoration of rural industry through efficient cooperation among farmers, manufacturers, and tradesmen.
As for short-term measures to implement the second indigenous local industry development project, the plan is to feed into the policy trend of delegating power to local governments based on the principle of project differentiation and strengthening linkage between the indigenous local industry development project and the regional strategic food industry development project. In the mid and long term, it is necessary to separate and link provincial and local projects. To this end, the policy goals should be set as follows: first, construction of rural industry infrastructure through finding of good resources in rural areas; second, rural industry development through linkage of upstream and downstream industries in rural areas; third, increase of employment opportunities and creation of high-quality jobs; fourth, empowerment of rural communities and strengthening of the capability of industry participants; and finally, construction of a cooperative system among farmers, manufactures, and tradesmen.


Researchers: Yong-Lyoul Kim, Eun-Mee Jeong, and Ja-Hye Min
Research period: 2012. 5. - 2012. 10.
E-mail address: kimyl@krei.re.kr