Livestock industry in disarray

Plunging prices of domestic live cattle and fears that the recently ratified Korea-United States FTA will further erode profits caused irate farmers to storm the capital this week with cows in tow for a planned rally at the Blue House that was interrupted by the police.

Fueled by possibly apocryphal stories of growing impecuniosity - such as the farmer who allowed his nine cattle to starve because he couldn’t afford to feed them - and angered at seeing live cattle traded for less money than pigs, farmers are up in arms. Among other factors, over-breeding beyond the recommended threshold of 2.5 million cattle led to oversupply last year and a sharp drop in prices, with the The Farmers’ Newspaper commenting in an editorial on Aug. 29 that the local livestock industry could collapse once cheap beef and pork imports swarm the market in the wake of numerous FTAs.

But while farmers have also been hit by rising prices of imported feed and the impact foot-and-mouth disease at the end of 2010, which inspired a mass cull of cattle and spooked consumers, they themselves are not free from blame. Many farmers enlarged their cattle farms in recent years to join the gold rush of rising beef prices, especially premium homegrown hanwoo beef, without fully considering the economic realities. And the Ministry for Food, Agriculture, Forestry and Fisheries should have enforced its cap on cattle breeding, which would have trimmed the cattle count by up to 300,000 head in 2011. But in fear of hampering the ratification of the Korus FTA, the ministry focused only on stepping up its campaign to encourage beef consumption.

Cattle prices have been plunging ever since the Chuseok holiday last September, when they enjoyed a temporary respite, causing the government to come up with the bizarre idea of increasing local beef supplies to soldiers. However, this can only be seen as a temporary measure as consumers, who are struggling with sky-high inflation, are still turning to cheaper imported beef and pork.

The debacle highlights the need for the livestock industry to become more sophisticated, with more subsidies available to small farmers, who are the most vulnerable. Large farms, in contrast, make huge cattle purchases at bargain prices, seeking profits one or two years later. Meanwhile, some middlemen must be removed from the costly distribution process of domestic meat to keep farmers and consumers happy, and this year’s revised livestock law has to be strictly enforced. Tax-payers cannot go on subsidizing individual greed and government policy failures.