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Opinion pieces on business & economic issues

MIN Seung-Kyu

Korea's Farming: Stay Small but Strong

MIN Seung-Kyu

Feb. 1, 2006

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"We know where the world is heading, but what worries me is whether Korean farmers would abandon farming. I believe there's hope, though, because we're not asking the government for support or money. We are only asking that we keep our hope that we can survive this crisis." 

This is what a farmer recently wrote to me in his letter. He is right in saying that what Korean farmers need is not money, but hope for the future.

However, the stark reality is that an average Korean farming family has accumulated a great amount of debts over the past decade. By 2004, their average debt had skyrocketed to 26.89 million Won, or three times its size over the past ten years.

And their hope is flickering. A nationwide survey taken on their sentiment showed that less than 10% of Korea's farmers are convinced their living standards will improve in the next five years. Korea's farming community is markedly losing vitality and their protests are getting fiercer by the day as they call for fundamental solution of their problems.

What is at the root of this crisis?

To begin with, indigenous farm products are struggling to survive against imports because of weakening competitiveness. Although the Korean government began investing heavily in the agricultural sector since the early 1990s, it could not shake off inefficiency and accumulation of bad loans. Nonetheless, the main factor is Korean farmers' refusal to open up markets to imports. As a result, the entire agricultural sector is in crisis, forcing us to search for solutions before it's too late.

Market opening may clearly threaten Korea's farming industry, but it can also be turned into an opportunity. Market opening means lowering of export barriers. If it leads to stronger competitiveness, it can expand Korea's presence in overseas markets.

This requires a change of thinking. It means fostering Korea's farm products as regular export goods. For example, Chamsam Farmers' Association in Kimje, North Cholla Province, exports more than US$6 billion of paprika to Japan every year by using new cultivation method of natural enemies, rather than chemicals, in keeping it clean against insects.

It is a global trend for a growing number of consumers to demand quality farm products irrespective of high price. For instance, Japan's Koshihikari rice brand is ten-times more expensive than ordinary Chinese rice, and yet it is popular among Taiwan's high-income consumers. Market for high quality, high-priced farm products is rapidly expanding. Even if low-quality, low priced farm products replace home-grown varieties, Korean farmers can still survive if they create new market for high-quality and high-priced goods.

Korea's agricultural industry is holding out hopes for creating a new market. In fact, this seems to be already beginning. Adventure, challenge, enthusiasm, these are the new qualities of Korea's agricultural industry. They represent a new opportunity. In particular, venture farmers have accumulated farming know-how for a long period of time, and are equipped with enhanced technology and innovative ideas.

No pains, no gains

More than a thousand venture farmers gathered at the Venture Agriculture University on November 27, 2005 , issuing a "Declaration of Hope for Korean Agriculture. "They pledged to change their mindsets and redefine themselves into a new engine of growth. These venture farmers aggressively try to connect farming with other industries to improve competitiveness, rather than continuing their traditional agricultural techniques. They are not the world's best farmers, but they promote the concept of a "small but strong" farming. Success cases suggest that this type of farming can create a business model with huge profits. Previous agricultural revolutions have emphasized the importance on productivity, but today's venture farmers are seeking to add value to their products.

Understanding this new concept is the main task for Korean farmers. Only when venture farmers grow big enough to represent Korea's agricultural industry, the entire farming industry will experience a breakthrough.

How can this be achieved? First the agricultural industry should promote "product innovation."

This can be done by adding value to farm industry products by combining farm products with products from other industries, or by enhancing quality to farm products to create a new market.

Agriculture can be integrated with food, pharmaceuticals, retail, tourism and leisure industries, or even linked with arts and culture industries. Another way is to foster high-quality farm products for foreign markets.

A good example is the success case of the Netherlands . Its farming population is one-sixth of that of Korea, but its farm exports equal the combined total of Korea's exports of semiconductors and automobiles.

Another factor is the promotion of "process innovation. "The farming sector is certainly vulnerable to imports and securing global competitiveness here is difficult. Even so, continued restructuring is needed notwithstanding the pain. In order to become a market-oriented agricultural industry, Korea needs to create unique farming businesses that reflect innovative ideas and technologies. For example, Japanese farmers in Mie prefecture have vowed to "think how customers think, and feel what customers feel. "Under this slogan, they succeeded in increasing their annual sales to 25 billion Won by producing and selling the kind of farming goods the customers want, and also by linking their industry with tourism. Such market-oriented competitiveness shows how an innovative idea can lead to a successful farming industry.

Idea is the key

Finally, our agricultural industry should promote "personnel innovation." Farmers themselves need to acquire a new mindset in a market-oriented environment. The farming industry can't develop competitiveness if it fails to change. This relates to the very issue of how important the role of "farmers" is in shaping Korea's future agricultural industry.

"I want Korea to develop into a beautiful nation that has the highest level of cultural power, not just a wealthy country," said Kim Ku, one of Korea's best-known independence leaders. His spirit echoes the aspiration of Korean farmers. They should take a greater pride in possessing a beautiful farming industry than trying to aspire as the most powerful industrial nation. Pragmatism should be the key competitive edge of Korea's agricultural industry as well as its achievable goal.

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