농림업 후방연관산업의 전략적 발전방안(3/3차연도) : 친환경 농자재, 상토와 유기질비료

Abstract

농자재는 농업생산의 중간투입재로서 농업생산을 가능하게 하며 기술체화에 의한 농업발전 기여도가 크기 때문에 농업발전의 핵심요소라 할 수 있다. 또한 미래농업 성장에 보다 첨단화된 고기술이 체화된 농자재가 필요하다는 인식과 함께 이를 공급해야 하는 농자재산업에 대한 중요성도 확산되고 있다. 그러나 이러한 중요성과는 달리 현재까지는 농업정책 내에서 농자재와 농자재산업에 대한 관심이 미미하였다. 농자재의 중요성, 농업과의 상호연계성이 강조되는 것이 아닌, 농업을 지지하는 외생적 변수정도로 각인되어왔다.

한편, 농자재산업은 2000년대 이후 국내시장 성장 정체와 내부적인 경쟁악화, 외국 기업들의 진입 등 각 산업별 다양한 문제들로 인해 경영과 기술개발 등에 어려움을 겪고 있다. 극단적으로는 국내산업의 붕괴가 우려된다는 목소리도 적지 않다.

이러한 상황에서 우리 연구원에서는 농자재의 중요성을 인지하고 3년에 걸쳐 농림업 후방연관산업의 전략적 발전방안 연구를 수행하였다. 본 연구에서는 농자재산업과 농업부문의 연계 구조, 농자재산업의 상황, 유통과 소비의 문제 등을 파악하고 산업의 발전방안을 제시하였다. 세부적으로 1년차에는 농자재 산업연관분석, 작물보호제, 무기질비료 관련 연구를 진행하였고, 2년차에는 농기계, 종자, 종묘 관련 연구를, 금년 3년차에는 상토, 부산물비료 관련 연구를 수행하였다.

Background of Research Due to the recent subdivision of agricultural production stages, the importance of the stage of growing seedlings has gradually increased, which has led to the production and use of high-quality artificial substrates for producing good seedlings. Farmers, nurseries, and collective paddy management entities that utilize bed soil point out inconsistent quality and non-diversity, and artificial substrate firms complain about Nonghyup’s aggressive intervention in the market, delays in sales fund circulation, imported raw materials’ unstable prices, and difficulties in securing timely imports. Also, the size of the domestic bed soil market is each differently estimated, and policy support for it is insufficient compared to other farm materials. On the other hand, with growing eco-friendly agriculture, the importance of byproduct fertilizer has risen, which has expanded its consumption. The government’s support project for inorganic fertilizers until the 1990s changed to support byproduct fertilizers. Currently, the organic fertilizer support project is the biggest of the government’s farm materials support projects, and 160 billion won is spent on subsidizing the price of byproduct fertilizers when purchasing them. Support is also provided for the fund for modernizing byproduct fertilizer production facilities and for related facilities reducing livestock excrement’s foul smell. However, despite various support policies and continually increasing consumption, there are diverse problems in the byproduct fertilizer industry. Although artificial substrates and byproduct fertilizers are essential agro-materials directly related to the growth of crops and the production of high-quality agricultural products, studies with a comprehensive perspective on a variety of issues in these industries do not virtually exist. With this backdrop, this study examines diverse problems in the whole process of production, marketing, and use of artificial substrates and byproduct fertilizers and seeks for measures to improve them.

Method of Research In the first detailed study, Development Strategy for the Artificial Substrate Industry, Michael Porter’s five forces of competitive advantage theory was applied. To apply the variables to the bed soil industry, we conducted surveys on the current state by agent: consumers (farmers, collective paddy management entities, nurseries), producers, and distributors. Also, in the second detailed study, Development Strategy for the Byproduct Fertilizer Industry, Porter’s five forces of competitive advantage theory was applied. To apply the variables to the byproduct fertilizer industry, we investigated the actual conditions of consumers (farmers), producers, and distributors.

Research Results

The First Detailed Project The results of applying Porter’s theory to the artificial substrate industry are as follows. First, as for the basic elements, industry-friendly factors are 1) the Fertilizer Control Act’s designation of artificial substrates as ordinary fertilizers; 2) local governments’ steady subsidies for purchasing bed soil; and 3) the domestic artificial substrates market’s continuous expansion. These are the bed soil industry’s positive elements. On the other hand, industry-unfriendly factors among basic elements are 1) the lack of the central government’s systematic support policies; 2) the national and farm household economy’s growth stagnation; 3) a decrease in the area under cultivation of agricultural products; and 4) Nonghyup’s monopolistic position and activities. Second, factors favorable to deter new entrants are 1) awareness of different quality and 2) seasonal production, small-scale national sales, and management of distribution organizations. The unfavorable factors are 1) the possibility of small-scale business start-up and simple processes and 2) competitive raw material market. Third, factors strengthening competition among companies’ competition factors are 1) artificial substrates-dependent business administration; 2) enterprises’ undifferentiated products; 3) emphasis on expanding the distribution network; and 4) dissatisfaction with market performance and the negative outlook for the market. The factor mitigating competition is stable business performance. Fourth, factors strengthening threat among consumers’ threat factors are 1) consumers’ voluntary information collection and purchase; 2) their valuing quality and an increase in the influence of people around them; 3) insufficient awareness of artificial substrate products’ differentiation; and 4) large-scale nurseries’ preference for imports. Factors mitigating threat are 1) consumers’ high awareness of the necessity for artificial substrates; 2) consumers’ positive outlook for the future market; 3) an increase in their demand for information and their responses; and 4) their purchase with high loyalty. Putting these together, we presented only strategies for developing the artificial substrate industry that can be applied generally, because opinions on them can be different by manager or researcher according to their situation. First, the domestic bed soil industry should be restructured. The domestic market's stagnation in growth and overheated competition, and imports' gradual entry to Korea are big challenges to the industry and companies. Restructuring needs to be considered to overcome these. In addition, restructuring in artificial substrate firms should be considered. It is time to review the overall situation of production and management and the establishment of future-oriented organizations and roles. Second, diversifying management is necessary. The portion of artificial substrates in total sales should be reduced. However, it does not mean a decrease in their absolute output. Rather, production of new products focused on agro-materials similar to bed soil should be actively considered. Third, joint purchase of raw materials should be considered. It is not easy to buy raw materials jointly in capitalistic market competition due to differentiation from the stage of securing them. Because cheaper, high-quality raw materials are important in a competitive advantage in the complete products market, joint purchase is difficult. Nevertheless, some raw materials can be bought and used jointly in case that they are not very different in quality. The recent joint purchase of sawdust needed in byproduct fertilizers is one example. Fourth, investments in technology development should be expanded. Overall, artificial substrate companies' management conditions are good; they are gaining proper profits. Investment in R&D is necessary to improve quality, especially in this situation. Firms thinking of their future should invest for it. Fifth, domestic and overseas market expansion teams should be organized and operated. Currently, there is no basic information on bed soil markets at home and abroad. The types and amount of imports and the reasons why consumers use imports have not been identified. Companies are not ready for imports' encroaching on the domestic market and they are not collecting information in advance either. Some firms are preparing overseas market entry, but its level is very low. Now is the time to increase the responding capability. If domestic bed soil firms do not prepare for potential competitors and the future, they will face difficulties before long. Sixth, the distribution system including joint delivery should be reviewed. The present marketing channels are very complicated including artificial substrates that receive local governments' subsidies and those that do not, and those distributed through Nonghyup and those that are not. These channels need to be examined at the industry level, and improvement plans are necessary. Bulky artificial substrates' joint delivery system by region can be established at the association's level. Additionally, cooperation may be possible with the byproduct fertilizer industry whose time and method of supply are similar. Seventh, education programs are needed to protect domestic consumers. Consumers choose higher-quality artificial substrates that they know better. The less consumers know about domestic products, the more they purchase imports. To secure domestic consumers stably and enhance their purchase loyalty, close relations should be established between bed soil companies and consumers at home. Education and PR can promote their close relationship. Eighth, an institutional or voluntary quality control system is needed. Stable quality management is first required to gain consumers' trust and to secure international competitiveness. Consumers are always concerned about unstable quality control. Artificial substrates especially affect successful raising of seedlings, so consumers think them important. If an institutional system cannot be established, the Korea Association of Seedbed Media should set and apply voluntary rules.

The Second Detailed Project The following are the results of applying Michael Porter's theory to the byproduct fertilizer industry. First, as for external environment elements, industry-friendly factors are 1) a steady growth in the byproduct fertilizer market; 2) an increase in organic waste resources; and 3) various favorable policies. Unfavorable factors are 1) the national and farm household economy's downturn and 2) shrinking farmland areas and eco-friendly agriculture. Second, factors intensifying competition among rivalry factors among competitors are 1) limited use of production facilities; 2) byproduct fertilizer-dependent management; 3) limited exports; 4) seasonal purchase and consumption of raw materials; 5) difficulties in storing biological resources; 6) distributors' high bargaining power; 7) consumers' valuing non-market factors in purchasing products; and 8) local Nonghyup's demand for a discount. Factors mitigating competition are 1) positive evaluation of the future market; 2) low-level production technology; 3) a low degree of development competition; 4) high purchase loyalty; and 5) low competition in raw materials. Third, factors intensifying threat among new entry factors are 1) the positive outlook for the future market; 2) no differentiation of products; 3) insufficient institutional restraints; and 4) good management performance. Factors reducing threat are 1) relatively excessive starting capital; 2) low possibility of substituted use of production facilities; and 3) strong civil complaints. Fourth, factors strengthening threat among consumers' threat factors are 1) consumers' active use of information and their putting stress on labels; 2) their valuing elements other than prices and quality in selecting a product; 3) a negative view on compost made from food waste; and 4) laying emphasis on services including delivery. Factors mitigating threat are 1) high awareness of the necessity for byproduct fertilizer; 2) moderate awareness of purchasing methods; 3) satisfaction with subsidies; and 4) the positive outlook for the future market. Synthesizing these, we proposed only measures to develop the byproduct fertilizer industry that can be applied in general, because views on them can be different by manager or researcher according to their situation. First, the domestic market should be stabilized and responses to imports are needed. When the market grows, plans for stabilization are essential. Excessive input of facilities and equipment can lead to poor management. In the byproduct fertilizer market absolutely dependent on government support, even small changes in policies can affect the whole market. We should consider present national fiscal austerity and the current large size of subsidies for byproduct fertilizer. Second, management needs to be diversified. Byproduct fertilizer’s portion of byproduct fertilizer companies’ total sales is very large. The structure is such that if the byproduct fertilizer market is unstable, a firm's whole management becomes unstable. Companies' sustainability and management stability are vulnerable, so diversifying management is required. Third, it is necessary to secure stable supply of high-quality raw and subsidiary materials. In case of organic fertilizer whose raw materials are mostly imported, it is important to consider joint purchase of raw materials. Securing high-quality livestock excreta is one of byproduct fertilizer producers' important management elements. For this, it is needed to cooperate with livestock farms (middlemen) that provide raw materials. If the size is reduced due to the farms' shutdown and closure and regulations on harmful substances of byproduct fertilizer are tightened, securing proper livestock excrement may be difficult. The connection with livestock farms should be considered for preparation. Fourth, strategic investment in R&D should expand. The level of quality differentiation is still low in the byproduct fertilizer market. Differences in all elements regarding competition are hard to find. Covert parts and product selection by personal connections are general. Nonetheless, because of imports, too many producers, and consumers' increased demand for quality improvement, quality competition will occur. Strengthening R&D is necessary to have the advantage for this. Fifth, it is needed to plan early order, joint delivery, and collaborative shipment. Byproduct fertilizers are supplied each year. Although the budget should be secured, early order of the previous year may be possible to some extent if there is not a big change. In this case, byproduct fertilizer companies' consumer management and administration will become very easy. On the other hand, byproduct fertilizers are not expensive but bulky, so their transport costs are high. Particularly, the concentrated period of transport is a considerable burden to producers. Therefore, transfer costs should be reduced. It is possible to cooperate with regional and central organizations and artificial substrate companies in an area (whose items are different but whose period of sales overlaps). For now, artificial substrate companies' cooperation with byproduct fertilizer firms in a region is realistic. Sixth, it is needed to tighten enforcement on unauthorized, low-quality products and improve complex marketing relations. The most important distribution agent is Nonghyup. The Korea Organic Fertilizer Cooperative, a central organization, should try to establish an equal relationship with Nonghyup. Discussions are necessary in all aspects such as a deadline for calculating sales and related commission, and the rationalization of contract terms. In this process, consultation with the government is also needed. Secret marketing agents and distribution practices should be reviewed for modernization and rationalization, and alternatives need to be prepared. A more useful marketing system should be created through a review by issue. Particularly, byproduct fertilizer companies should give up abnormal competition for themselves, and central organizations' intervention may be needed. That is, the marketing sector's normalization is necessary. Investigation and regulations are required for unauthorized firms' production and supply of byproduct fertilizer, and companies that use the firms as intermediary producers. Seventh, consumer education and PR should be strengthened. Byproduct fertilizers should be properly utilized on various crops. However, consumers have limited information on this, so their purchases mainly depend on people around them. Their choice is not based on products and price competition. Eighth, micro strategies for each distributor are needed. Distributors' increasing power in the marketing process is not helpful to management. Moreover, their promoting quality competition and nonprice can disrupt distribution order and can be a burden to management. Therefore, the problems of byproduct fertilizer marketing should be addressed individually and jointly. Otherwise, costs for these will increase continually. It is also necessary to legalize dealers and to coordinate individual unequal transactions with local cooperatives. Ninth, policy support programs should be examined. For example, it is required to review the application system and the same support scheme as the grade system, to organize the conflicting logic and policy projects, and to establish a strategy for coping with epidemic livestock diseases. Tenth, it is necessary to streamline related laws and regulations and to create a national system for managing organic waste. Because byproduct fertilizers are living products, their management should be different from that of inorganic fertilizers. It is hard to apply inorganic fertilizers' official standard to byproduct fertilizers, so solutions are needed. On the other hand, a system should be established for strengthening the recycling of Korea's organic waste. The byproduct fertilizer industry's cooperation is important in this. The government should create a system for managing the whole process of generation, distribution, and use of organic waste, because the generation and recycling of livestock excreta in agriculture and forestry sectors, food waste, and organic sludge is an important issue and responsibility at the national level.

Researchers: Kang Chang-yong, Park Hyun-tae, Seo Dae-seok, Kang Seong-pil Research period: 2014. 1. ~ 12. E-mail address: cykang@krei.re.kr