Issues in Agricultural Policy and Challenge in 2014

Abstract

The Korean economy is expected to show a steady recovery and grow by 3.8-4.0 percent in 2014, leadingto an increase in the demand for agricultural products. However, a stronger Korean won and weakerJapanese yen will make it challenging for the country to export agricultural products. The agricultural policyauthorities and the entire industry need to pay keen attention to changes in macroeconomic indicators.Major policy issues will include the expansion of market opening in the agricultural sector and complementarymeasures in the domestic market, including issues related to Korea-China FTA and TPPnegotiations. The continuous growth of the Chinese economy (with over 7.3 percent of its growth rate)and the trend of a stronger yuan will serve as an opportunity for Korea to increase the export of itsproducts.The low income issue in rural areas is unlikely to be resolved this year due to the stagnation in growthin the agricultural industry and deteriorated conditions in the agricultural trade. Therefore, the authoritiesshould make more efforts to expand growth engines and seek for new solutions. Although the populationin rural areas will continue to naturally decrease due to a rapidly aging society, new forms of economicactivities will increasingly emerge, leading to the materialization of the results of the 6th IndustryInvigoration Measures.In 2014, the key policy challenges include as follows: (1) designing solutions for the low-income issueand stable management measures in rural areas in response to the expansion of market opening in the agriculturalindustry and natural disasters; (2) enhancing the agricultural R&D framework as a foundationfor the development of technology-oriented creative agriculture to overcome a slow-growing trend in theagricultural industry; (3) laying the groundwork for eco-friendly animal husbandry to accelerate the qualitativedevelopment of the livestock industry, including the competitiveness against imported livestockproducts, harmonization with local agriculture, and improvement of living environment; (4) proposing acomplementary measure to enhance the effectiveness of the remedy for the distribution structure of agriculturalproducts suggested in 2013; (5) strengthening the link between the food industry and agriculturein response to the expansion of the food market, developing strategic items for the expansion of exportto China through the Korea-China FTA, and establishing the foundation of production; (6) laying thegroundwork for consumer policies in the agri-food sector, including the food safety management thatkeeps up with changes in consumer environment and support for the nutrition supply of the underprivileged;(7) nurturing rural industries and promoting the 6th Industrialization Strategy that connectsproduction, processing, sales, and consumer experiences altogether by using both tangible and intangibleresources in rural areas and expanding the links among related individuals and organizations; (8) establishingmeasures to enhance the quality of life in rural areas, including the 3rd Improvement Plan forQuality of Life in Rural Areas; (9) reorganizing the living zone by connecting with fostering communityin rural areas; and (10) reinforcing agricultural businesses following the quantitative expansion of theOfficial Development Assistance (ODA) projects in the agriculture and forestry sectors, and strengtheningthe systematic cooperative network among related institutions.