2016 Production Status and Market Prospect of Eco-Friendly Agricultural Products at Home and Abroad

Abstract

○ The cultivation area of environmentally friendly agricultural products (organic andnon-pesticide) has declined since 2013, but is expected to grow again after 2016.- As the requirements for certification of eco-friendly agricultural products were tightened dueto the credibility issues, the cultivation area of these products has reduced by an annualaverage of 16.1% since 2013.- However, it is expected to increase again after 2016 in case the 4th Five-Year Plan for theDevelopment of Environmentally Friendly Agriculture, aimed at improving the certificationsystem, expanding the distribution system, facilitating consumption and reinforcing theproduction infrastructure, is implemented well as planned.○ The market size of eco-friendly agricultural products has also reduced due to the decrease inthe number of certification cases. The market is estimated to be worth KRW 1.2718 trillion asof 2015, an 18.8% decline from the previous year.- The market of environment-friendly agricultural products shrank in 2015 because thereduction in the area of farmland with eco-friendly certification led to the decrease in thevolume of shipment.- Among various commodities in the market, fruits take up 8.0%, which is very little comparedto grains (42.8%) and vegetables (21.7%).○ Thanks to the global trend of well-being, the size of the organic agri-food market has graduallyincreased since 2000 mainly in advanced countries, including the US and European countries.- As of 2014, organic agricultural products are produced in 43.66 million ha of farmland inabout 172 countries around the world, and the volume is on the steady increase.- The scale of the global organic agri-food market rapidly grew from USD 15 billion in 1990to USD 64 billion in 2012 (an increase by 4.3 times) and to USD 80 billion in 2014 (anincrease by 5.3 times).○ The market for eco-friendly agricultural products is expected to grow again from 2016 with thefostering policies of the government.- The implementation of the 4th Five-Year Plan for the Development of EnvironmentallyFriendly Agriculture starting from 2016 is predicted to lead to a steady growth of the marketsize, presumably reaching KRW 2.5242 trillion by 2020 and KRW 3.9862 trillion by 2025.○ It is crucial to make efforts based on policies to facilitate the stable supply and consumptionof environment-friendly agricultural products.- In the short term, for a smooth supply of eco-friendly fruits in response to the abolition ofthe certification system for low-pesticide agricultural products, it is needed to come up withmeasures for enhancing the direct payment system, introducing the insurance system forproducers, and designing and disseminating the cultivation manuals for organic fruits.- In the medium and long term, it is necessary to expand the industrial foundation foreco-friendly processed food and the domestic and overseas markets in relation to the foodservice industry and export, thereby responding to the expansion of the market forenvironment-friendly agricultural products.