The plight of farmersKorean agriculture faces a crisis. The pressure to open the market is increasing, and yet Korean agricultural competitiveness is at a standstill.
If the market opens further, our agriculture will have no place to stand. The problem is that we will not be able to block foreign produce forever. The reasons are bigger than free trade agreements or negotiations at the World Trade Organization. We can no longer force consumers to eat our produce at prices four to five times higher purely out of love for our country and to protect our uncompetitive farming industry. It is a fact that many foodstuffs have already been replaced by cheap Chinese produce.
The disputes about U.S. beef imports, which have increased because of the bone slivers that were found in shipped beef, call for a more fundamental solution for the future of Korea’s agriculture. Even without U.S. beef imports in the picture, the domestic beef market is already open. Beef imported from Australia and New Zealand occupies 52 percent of the market. If U.S. beef is allowed, imported beef will probably take up 60 percent. If we are blocking beef imports because of bone slivers, it’s not protecting our hanwoo [Korean cow] farms.
Currently, hanwoo beef prices are 4.6 times higher than imported beef. It is difficult for most middle-class families to eat this beef. Before U.S. beef imports were banned, the price gap was 3.5 times, but it has widened since then. Because of that, cattle prices are shooting up and everybody is trying to raise more cattle.
However, if the World Organization for Animal Health drops the mad cow disease ban on U.S. beef in May and U.S. beef imports are allowed into Korea, the Korea Rural Economic Institute estimates that prices of cattle will drop by more than 20 percent. In other words, a fluctuation in cattle prices is foreseen. When that time comes, it will be no use blaming consumers who turn their backs on hanwoo. If we keep delaying, damages to beef farmers will increase and we will be unable to avoid a vicious circle. Uncompetitive agriculture and excessive protection has created a tragedy.
At a seminar with the Hanwoo Association, Park Hong-soo, the agriculture minister, said that the government cannot block U.S. beef imports forever and that the bone particles were just a matter of sanitation. That implies that the government has no intention to use quarantine as a method to protect Korean farms. That all boils down to competitiveness. If hanwoo farms are unable to build their own differentiated competitiveness in terms of quality, they will not be able to survive. Shouting and protesting will not create competitiveness out of thin air.
Agricultural policies have already turned their focus from protecting farming villages to developing those places into areas that are nice places to live. Other than farming, there must be various support policies, such as conversion to tourism or service sectors. Produce must also be able to build competitiveness to stand against imports, whether that be in price or quality. Leaning on government protection is a thing of the past. The government should not indulge fantasies of offering protection or compensation, but be aware of the crisis and let farmers build their own competitiveness.