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On the Evolution and Enlightenment of Korean food subsidy policy

Author: MaXiaoChun LiXianDe From: www.yourpaper.net Posted: 2010-07-10 07:18:04 Read:

Abstract: With the changes in the status of the domestic food production, consumption and trade, South Korea's food subsidy policy shift upside down by the purchase and sale of direct subsidies. Overall, the Republic of Korea to implement a higher degree of international trade-distorting amber box policies to achieve a completely self-sufficient in rice consumption. This article, based on the analysis and evaluation of the evolution of Korean food subsidy policy and the effects of policies proposed to strengthen the agricultural infrastructure, food security, the use of WTO rules to create a line with the national agricultural subsidies and other policy recommendations.
In the 20 years after the founding of the Republic of Korea stagnation of economic development, urban-rural income gap is widening, the continuing shortage of food. To change the backward agricultural country conditions. Industrializing South Korea since 1960. In the subsequent 30 years, the Korean economy is sustained and rapid growth, per capita GDP increased from U.S. $ 87 million in 1962 to $ 10,548 in 1996, and further increased to $ 18,340.76 in 2006. 1996 Korea Economic Cooperation and Development (OECD). From 1960 to the present, the overall economy continued to grow at the same time. The share of agricultural added value of South Korea's GDP continued to decline: from 36% in 1960 down to 3.2% in 2008.
, The Birth and Evolution of food subsidies policy
1. Food subsidies policy generated
(1) rice subsidy policy. Rice is the South Korean people spending major varieties of grain, rice subsidy policy is the core of Korean food subsidy policy. The beginning of the founding of the PRC, due to the economic backwardness Korean government agricultural subsidies. The end of the 1960s, has experienced nearly 10 years of industrialization, South Korea sustained and rapid economic growth, government finances continue to accumulate; solve food shortages continued to plague the development of Korea, from the beginning of 1968, South Korea rice implement the system of buying and selling upside down . That the government high-priced acquisition of rice from farmers, low-cost supply to city residents, the difference is subsidized by the government. The cost of subsidies for the difference from the Food Management Act (1970) established on the basis of the food fund. Buying and selling upside down subsidy policy opened a prelude to the Korean food subsidy policy.
(2) production input subsidies. With the advancement of Korea's industrialization and urbanization, a large number of rural residents to urban areas. 1967 - 1971, South Korea an annual average of 60 million agricultural labor out of agriculture; During this time, the Korean farmers reduced the number of 26,000, the agricultural labor shortages. To solve the problem of labor shortage, the South Korean government since 1972 to encourage farmers to purchase agricultural machinery, low-interest loans and other subsidies given to farmers to purchase agricultural machinery. The implementation of this policy is not only timely solutions to reduce the problem of the agricultural labor force, and at the same time improve the efficiency of agricultural production due to the popularity of agricultural machinery. 1972 South Korean farmers have cultivator 25000. 75000 threshing machine. In 1978, the South Korean farmers has the cultivator 125,000 units. 400% increase over 1972; the threshing machine 132,000 units, compared to 1972 increased by 76% (OECD, 1999).
In addition, to improve the level of grain production, increase food production, the South Korean government's 2O century 7O given to farmers to buy fertilizer, pesticides subsidies. Specific subsidies: the Government commissioned agriculture collaboration with the Central Council (referred to as the Agricultural Cooperative Federation, NACF) from the manufacturer to the purchase of fertilizers and pesticides, and low-cost sales to farmers, the difference from the government budget expenditure. The introduction of subsidies so that the consumption of fertilizers and pesticides in South Korea rapid increment: 1970 Korean consumer fertilizer 356,000 tons, 83,000 tons potash, phosphate l2.4 million t; 1990 annual consumption of nitrogen fertilizer 56 .2 million tons (an increase of 58% compared to 1970), consumption of 286 000 t of potash (up 242%) than in 1970, 256,000 tons of phosphate fertilizer consumption (up 106%) than in 1970 (OECD, 1999). Fertilizers, pesticides and other subsidies policy. On the one hand to promote Korean food crop yields significantly increased the level, on the other hand 9O years in the 20th century, Korea became one of the largest unit of arable land, fertilizer and pesticides application rate in the world.
(3) to strengthen the agricultural infrastructure.
As part of the food production program in the 1970s ,1971 - 1981, the South Korean government to carry out a large-scale agricultural infrastructure. Construction projects include: the re-planning of Korea's largest four rivers surrounding arable land (the area accounted for 54% of Korea's total cultivated area), to strengthen the construction of farmland water conservancy facilities, the transformation of the old irrigation systems, reclamation of arable land and other content. Vigorously carry out agricultural infrastructure prompted South Korea to additional 31,000 ha of arable land in 1976, an increase of 63,000 tons of rice; ended in 1981. South Korea re-planning of 122,000 ha of arable land, more than to l0.2 million hectares of arable land with irrigation facilities (OECD, 1999). At the same time, the continuous occupation of cultivated land for industrialization and urbanization, the Republic of Korea in 1972 promulgated the "arable land use and protection of the Law, the severe restrictions imposed on non-agricultural land.

2. The evolution of food subsidies policy
(1) the purchase and sale of upside down subsidy policy adjustment. Since the buying and selling upside down subsidy policy in Korea, farmers planting rice enthusiasm significantly improve, continued to increase in rice production: 1971 rice production to 4 million tons, 82% of the self-sufficiency rate: rice production in 1976 reached 5.21 million tons, to achieve full self-sufficiency for the first time (OECD, 1999). Consumption, with the continuous growth of per capita income, type of food rich in the market. Korean per capita rice consumption downward trend starting in the 1980s. At the same time, the purchase and sale of upside down subsidy policy in the implementation of more than 20 years has brought great burden on the South Korean financial [the end of 1993, food management fund deficit reached 8.7x104 billion won (100 won U.S. $ 0.58 RMB). Which subsidized rice farmers caused by the deficit of 88.5%].
Forced by the pressure of the burden of huge subsidies in 1993, the South Korean government on the purchase and sale of upside down subsidy policy adjusted. Specific adjustments: acquisition rice sold to the market, the Government commissioned the Agricultural Association to establish sales bidding mechanism, in accordance with the tender to determine the sales price sale rice: Government commissioned the Agricultural Association to the rice farmers to pay the government the purchase price and the bid sales price the spread between the subsidies and other costs. 1994 Korea repeal the Grain Management Fund, established to strengthen the food stocks funds, decided the food management fund debt borne by the Fund: In addition, the Korean government set up a food management responsible for the Special Account subsidize the difference. Buying and selling upside down subsidy policy adjustment will completely rely on government subsidies the farmers into subsidies to farmers to rely on government and domestic consumers.
(2) direct payment policy generation. After the establishment of the WTO in 1995, in order to reduce the performance of the impact of the WTO Agreement on Agriculture of the country's rice market, South Korea decided to postpone l0 years to the implementation of the tariff on rice (ie: starting in 2005 to the implementation of the tariff on rice), also promised in 1995 - during 2004 to expand rice imports amount, specifically: the number of imported rice in 1995 is the base period (1988 - 1990 average) Korea rice consumption amount of 1%, the number of 2004 imports of rice of 4% of base period consumption amount. However, by 2004, in order to continue to protect the domestic rice market, South Korea raised again 10 years later to the implementation of the tariff on rice and commitment: from 2005 - 2014 in South Korea every year more than 20,300 tons of imported rice. In addition, in order to fulfill the WTO Agreement on Agriculture asked South Korea to reduce Total AMS (AMS) ~~ obligations (2004 South Korea's AMS than in 1995 decreased by 13.3%), South Korea began in 2000 to gradually reduce rice the level of subsidy.
After 2004, for the performance of the new round of WTO to reduce the requirements of AMS, the Korean government rice subsidy policy reform: the abolition of buying and selling upside down subsidies, began to use direct payments, the policy was implemented from 2005/06. Direct payment policy contains a fixed payment and a variable payment of two parts: a fixed payment of the l998-2000 period in register with the government arable land to grow rice; pay a fixed standard in 2005 to 600,000 won / ha; starting in 2006, fixed payment standards up to 700,000 won / hm2, the South Korean government implementation of the fixed payment paddy field area of ??1.024 million ha. Pay a fixed total expenditure of 716.8 billion won. Variable pay is currently registered with the government of arable land to grow rice: standard variable payment based on the difference between the market price and the government target price and multiplied by the area under cultivation. In 2005-2007 the government's target price of 2,126 won / kg (2.225 U.S. $ / kg); variable payment standard was executed in 2005 for 958,300 won / ha in 2006 had dropped to 459,800 won / hm2. Direct payments implementation of the policy marks South Korea's food subsidy policy shift by market price support to direct payments direction.
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