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Korean agricultural lanscape

Korean agricultural landscape

Agriculture in Korea

THE TOTAL LAND AREA OF KOREA is 9,965 ha, which accounts for 0.22% of the Asian continent. Of this land area, approximately 20% or 1,824 ha is arable land as of 2005. Located in a temperate monsoon belt with four distinct seasons, an average temperature of 11oC, and an annual rainfall of 1,300 mm, dropping to about half between June and August, Korea has only 7 months of frost-free period suitable for agricultural activities, mostly devoted to paddy and other upland crops. The arable land per farm household is about 1.43 ha and its use rate is 104.7% as of 2005.

Rural population in 2005 numbered 3.4 million which is about 7% of the total population. There has been a rapid decrease in the ratio of rural population to total population during the 1970s-1980s, from 44.7% in 1970 to 15.5% in 1990 and 8.5% in 2000. The number of farm households and its average number of people are 1.27 million households and 2.7 persons, respectively, which have also shown continuous declining pattern due to migration of rural residents to the urban area. The aging population is sharply and constantly rising among rural population so that the ratio of over 60 to the total rural population is rapidly rising from 10.5% in 1980 to 40.3% in 2004. These demographic situations have caused chronic labor shortages and increased production costs in rural areas during a comparatively short farming season in terms of planting and harvesting demand.

Availability of major farm machineries such as farm tractor, combine and controller has largely increased since the 1980s. Most rice farming areas have been mechanized while farming for upland crops has remained low in terms of mechanization rate. Use of chemical fertilizer keeps going down since the early 1990s due to the growing concerns on soil acidification and environmental issues, and consumers’ needs for safe foods. Seeds industry is run by private companies and almost all seeds are permitted to be sold in the country. As the UR Agreement was settled and agricultural business restructuring has been actively under way since the 1990s, capital and technology-intensive farming has increased so that the amount of capital against land shows 2.75 times the productivity of land as of 2005.

Agricultural Production

The 15 major agricultural products in 2004 are rice (27.6%), pig (10.1%), Korean beef cattle (8.0%), milk, egg, chicken, red pepper, grape, water melon, strawberry, garlic, straw, tomato, ginseng, and cabbage, which account for 72% of the total amount of agricultural production, valued at around KRW 36 trillion. Rice is the most important food to Koreans; its ratio to total agricultural production is 27.6%, 2.7 times that of the second largest product, pig with 10.1%. Compared with that of 1990, production of garlic, apple, sesame, tobacco, and orange tangerine is decreasing, while watermelon, grapes, and ginseng have made it to the list of 15 major agricultural products.

The cultivation trend by crop shows the continuous decrease in ratio of cereals, while high-profit products or products in growing demand have become more and more cultivated through greenhouse farming. The amount of production by crops has shown a decreasing trend in food crops, while vegetables, fruits, flowers, and livestock and poultry products have shown increasing trends.

Indices of agricultural production by crops show generally weakening trends. Food crops, vegetables, specialty crops, flowers, and mushrooms have maintained down turn production, while fruits, medicinal crops, and livestock and poultry products have shown continuous growing trends.

Agricultural Economy

Domestic Marketing and International Trade

Due to the globalization, domestic distribution channel for agricultural products and farmers’ economy have faced rapid changes. In regard to domestic distribution channel for agricultural products, in addition to the existing conventional wholesale market, it has witnessed the emergence of new retailers such as department stores, supermarkets, large-scale outlets, convenient stores, T.V. and internet shopping, etc., further diversifying agricultural market channels from farmers to consumers. In terms of international trade of agricultural products, Korea is a net-import country. Overall trade balance has greatly improved, however, agricultural and fishery products have remained a deficit at an amount of USD 10.8 billion in trade balance. These changes in agricultural market have facilitated competition in domestic market, coupled with the effect of the opening of agricultural market since the UR Agriculture Agreement in 1994, and have influenced farmers’ cropping system, their household economy, and finally the overall national economy.

Significance of Agriculture in the National Economy

The share of agriculture in GDP was estimated at 3.3% as of 2005, showing rapid decline of its portion from 29.2% in 1970, 16.2% in 1980, and 8.9% in 1990.

Farmers’ Economy

The general price index for agricultural commodities in Korea is increasing. However, this increasing rate is still lower than that of the general price index for agricultural production cost incurred by the farmers, leaving them with unfavorable trade condition. Farmers’ trade condition coefficient by dividing general price index of agricultural produce by the general price index of agricultural input cost is 89.4% as of 2005. The income level of farmers’ households is around 78.2% of the average income of an urban household and about 87.1% of the average income based on national sample survey results.

Food Security and Food Self-sufficiency

In view of the rapid changes in the agricultural structure of Korea, it has made persistent efforts to secure its total food security and food self-sufficiency. As of 2004, self-sufficiency rate of rice is over 100%; on the contrary, total self-sufficiency rate of major grain products is 29.3% including feed grains and 53.4% for food grains only. Other self-sufficiency rate by crops indicates that pulses and nuts, fish and shellfish, oil and fats are not produced by Korean farmers.