FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Friday May 30, 2014

For Coverage:   May 15 ~ 30, 2014

1. BILATERAL/MULTILATERAL ISSUES

Korea-China FTA Negotiation Makes Progress... Accelerates toward Settlement [Korean, KSY]

http://www.fnnews.com/view?ra=Sent0801m_View&corp=fnnews&arcid=

SUMMARY:  The Ministry of Trade, Industry, and Energy (MOTIE) announced that the 11^th negotiation on Korea-China Free Trade Agreement (FTA) made progress, especially in concession, service, investment, standards, and cooperation.  According to MOTIE, Korea and China exchanged offers and requests of concession.  There were also progress on commodity agreement, trade remedies, competition, country of origin, customs clearance, and environment.  Two countries agreed to accelerate further negotiations. The next negotiation will take place in July.

Talks between Korea-Philippines Agriculture Ministers [Korean, KSY]

http://www.newsis.com/ar_detail/view.html?ar_id=NISX20140526_0012942727&cID=10401&pID=10400

SUMMARY:  Dong-phil Lee, Minister of Agriculture, Food, and Rural Affairs, met Proceso J. Alcala, Secretary of Agriculture Department of Philippines, on the 26^th to talk about rice tariffication.  Secretary Alcala said that even though two countries are in different situation, suspension of rice tariffication without additional penalty seems impossible.

2. BIOTECHNOLOGY ISSUES

[Park Tae-gyun Column] Where Did All those GMO Products Go? (Tae-gyun Park, Journalist specializing in food and drugs) [Korean, KSY]

http://sunday.joins.com/article/view.asp?aid=34287

SUMMARY:  Unlike traditional breeding techniques, GMO (genetically modified organism) is a technology that enables attaining 'products with many merits' by inserting genes of other organisms.  Recently, the Citizens Coalition of Economic Justice announced that 93 ramyeon (ramen - instant noodle) products did not have any GMO labeling.  Many people seem to be concerned that they are eating ramyeon made from GMO ingredients.  However, the possibility of GMO ingredients being used in ramyeon and tofu remains very low.  The negative perspective toward GMOs will threaten the company once the usage is caught by the inspectors.  That does not mean that Korea is a GMO-free country.  Korea imports an enormous amount of genetically modified beans and maize.  The reason GMO labeling are hard to find is because GMOs are not used in products that directly goes into consumer's mouth such as tofu, bean paste, or popcorns but used in processing food ingredients such as soybean oil, maize oil, and starch.  Korea does not require GMO labeling if there are no remnants of DNA or protein, or if the GMO ingredient is not one of the top 5 materials.

The discussion on safety of GMO has been ongoing for 20 years, but there is no conclusion that everyone agrees upon.  GMO labeling was introduced as an alternative plan, but it is also a double-bladed sword.  The expansion of GMO labeling protects consumers' right to know, but on the other hand, results in rise of price.  The government and consumers must weigh gain and loss, and make a rational decision.

US Demands Korea to Admit Adventitious Presence of GMO [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232420&page=undefined

SUMMARY:  The United States and Korea negotiated twice on Organic Equivalency Agreement on April and May.  Two countries seem to hold different view on Adventitious Presence of GMOs (genetically modified organism) and usage of animal medicines.  Korea is demanding for zero tolerance non-detection of GMOs, while the United States argues that adventitious presence of GMOs should be permitted.  For animal medicine issue, Korea admits using medication to organic livestock with prescription of veterinarian if the withdrawal period is two times longer than the average livestock.  On the other hand, the United States does not allow any usage of medicine in organic livestock.  Some expect that both countries will yield for a compromise.  However, the Korean government announced that it will not use 'admitting adventitious presence of GMOs' as a bargaining chip.

3. GRAIN & OILSEED ISSUES

Rice Self-Sufficiency Rate to Exceed 90%... Excessive Rice Supply Is Predicted When MMA Is Added [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/05/27/0200000000AKR20140527107400030.HTML

SUMMARY:  The self-sufficiency rate of rice this year is expected to surpass 90% for the first time in 4 years, due to a good harvest last year.  According to the Ministry of Agriculture, Food, and Rural Affairs (MAFRA), rice self-sufficiency rate is predicted to reach 92% in grain year 2014 (November 2013 to October 2014).  The minimum amount of obligatory import under MMA (minimum market access) is 409,000 ton in 2014.  If this amount is added, supply will inevitably exceed demand.  A MAFRA authority said that if Korea decides to increase MMA amount in order to suspend rice tariffication, farmers will be forced to downsize the rice production areas.  More than 80,000 hectares of rice paddies, the area equivalent to the total size of paddy fields in Chungbuk, will be objected to reduction.

Public Hearing for 'Rice Tariffication' to Be Held on June 12th [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232625&page=undefined

SUMMARY:  Ministry of Agriculture, Food, and Rural Affairs and Ministry of Trade, Industry, and Energy are holding a public hearing on rice tariffication issue on June 12^th.

Dong-phil Lee, "Government Will Decide Its Stance on Rice Tariffication in June" [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/05/28/0200000000AKR20140528036252030.HTML?from=search

SUMMARY:  Agriculture Minister Dong-phil Lee announced at the 4^th National Agricultural Administration Council that the government will decide its stance on rice tariffication in June after collecting opinions.  He added that the ministry will provide measures to relieve anxiety and maintain production of rice farmers.  He seeks for a way to not only guarantee sustainable development and secure income of rice industry but also minimize social conflict.  Minister Lee also discussed Korea-China FTA by saying that the government is trying hard to include as many agricultural products as possible into very sensitive product category.

President Cheon-young Yoon of National Agriculture Technician Association said that it is difficult for Korean rice farming to endure with 410,000 tons of rice flooding into the country, and that a tough decision must be made to stop the inflow of rice in order for rice industry to survive.

Sun-seok Jeong of Korea Foodservice Industry Association insisted that the fundamental structure of agriculture has to be changed rather than trying to protect and compromise.

Ha-sung Song, a professor of Kyonggi University, suggested introducing a fundamental policy that excludes rice from concession.

Future of Korean Rice Depends on 'Optimal Tariff' [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232507&page=

SUMMARY:  The deadline of deciding upon rice tariffication is near at hand.  If the government decides to switch to rice tariffication, the future of Korean rice industry will depend on the level of tariff.  However, the government is staying silent about the tariff equivalent, in order not to show Korea's cards to other countries.  That is why the discussion on tariff level is not going any further.  Dong-phil Lee, the Minister of Agriculture, Food, and Rural Affairs (MAFRA), said that the tariff will be set around 300% to 500%, while the field experts predict from 300% to 700%.  The difference in estimation derives from lack of information about accurate price data.  The price data is for Korea to decide, but it requires verification from other WTO member countries.  It took 19 months for Japan and 56 months for Taiwan to complete the tariff verification.  MAFRA authority announced that the tariff equivalent will be reported to the National Assembly Standing Committee once it is decided.

[There Is a Future for Rice Industry] Consumption and Outlook of Rice [Korean, KSY]

http://www.seoul.co.kr/news/newsView.php?id=20140528018001

SUMMARY:  According to the Ministry of Agriculture, Food, and Rural Affairs (MAFRA), the amount of rice consumed on the dining table in the year 2013 was 67.2 kilogram per person.  This amount is a 3.7% decrease from the previous year, and less than half of the year 1970 when the rice consumption reached its highest of 136.4kg.  The amount of annual rice consumption per person is predicted to drop to 50kg in 2024.  Fortunately, the yearly consumption of processed rice is showing a high growth.  It grew 10.8% in 2013 to 9.2kg per person.  The average growth of processed rice consumption of 5 years from 2008 was 11.6%.  National Agricultural Cooperative Federation is aiming to secure the annual rice consumption at 70kg (60kg of cooked rice and 10kg of processed rice).  Another solution is to increase the rice export.  The amount of Korean rice export was a total of 2,507.3 tons during the 3 year period from 2011 to 2013.

MAFRA to Discuss Measures against Rice Tariffication in National Agricultural Administration Council [Korean, KSY]

http://www.edaily.co.kr/news/NewsRead.edy?SCD=JA11&newsid=01928646606093184&DCD=A00101&OutLnkChk=Y

SUMMARY:  Ministry of Agriculture, Food, and Rural Affairs (MAFRA) will hold the 4^th National Agricultural Administration Council on May 28^th to discuss current agricultural issues.  The topic of the discussion will be the measure for rice tariffication.  MAFRA will also explain their development plans for rice industry, FTAs with three nations of British Commonwealth, and ongoing avian influenza.

[Opinion] Inquiries about Abolishing Rice Import Licensing System (Ki-ho Song, Lawyer specializing in international trade cases) [Korean, KSY]

http://www.hani.co.kr/arti/opinion/because/639098.html

SUMMARY:  Rice is a staple food. That is why the Korean government has been controlling rice import under the Grain Management Act ever since the liberation.  Rice is a 'grain objected to permission', which signifies that nobody can import rice without revision of the law.  However, the law is on the verge of being abolished by 'rice tariffication' which will be decided in June.  The strange English term 'rice tariffication' means that anybody can import rice if the tariff is paid, which has an equivalent meaning to abolishing the Rice Import Licensing System.  Please use a term that fellow citizens and farmers can understand.

June is just around the corner, and therefore I publicly inquire three questions to Minister Dong-phil Lee of Agriculture, Food, and Rural Affairs.  First of all, what will be the exact tariff for rice?  Even though this is a major issue, Minister Lee is keeping mum.  WTO has a formula of calculating tariff, but the government is vaguely repeating it be around 300% to 500%.

Secondly, why is the government strangling itself with the time limit of June and September?  Rice tariffication is impossible until the Rice Import Licensing System is revised.  The United States and China are both aware of this fact, and no country can occupy the National Assembly to revise it.  Even though Korea does not abolish the act, rice exporting countries cannot accuse Korea of breach of agreement.  This is because Korea is abiding by the minimal market approach of 12%, the United States is already enjoying its vested rights by exporting 50,000 tons of rice every year, and the benefit from winning the suit is insignificant.  The time is on our side.

Finally, what are the countermeasures for abolishing the Rice Import Licensing System?  I would like to ask if the government has any plans to maintain the tariff, subsist domestic rice farming, and prepare agrarian reform.

I expect three inquiries above will lead to interactions between government and farmers.  The Constitution obligates the state to protect and promote agriculture.  This responsibility is far more crucial than the agreement.

4. LIVESTOCK ISSUES

900 tons of Minced Beef Recalled in the US [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232714&page=

SUMMARY:  900 tons of minced beef from Wolverine Packing Company was recalled due to a detection of genetic fingerprint of E. coli O-157 in the United States.  E. coli O-157 causes food poisoning and hemolytic-uremic syndrome, which can lead to death.

US Beef Import from January to April Rose 14.9% Compared to Previous Year [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/05/30/0200000000AKR20140530113800030.HTML

SUMMARY:  The US beef import from January to April this year rose 14.9% compared to the same period of the previous year.  According to US Meat Export Federation (USMEF) and Korea International Trade Association (KITA), the amount of US beef imported during January to April recorded 35,791 tons.  The market share of US beef in Korean imported beef market was 37.5%, second behind Australia (53.3%).  USMEF authority said that the amount of imported beef grew due to a fall in domestic beef supply.  On the other hand, the US pork import from January to April decreased 1.3% to 43,366 tons.

Pork Price 'Skyrockets'... Threatening Grocery Shopping Price [Korean, KSY]

http://www.munhwa.com/news/view.html?no=2014052901071924174002

SUMMARY:  The skyrocketing pork price is predicted to continue until September.  According to Korea Rural Economic Institute (KREI) Outlook, the price of pork carcass will reach its peak of 5,100 to 5,300 won per kilogram in June, which is a 16.6 to 21.2% increase compared to the previous month.  The price rise is due to an unchanging quantity of pork used in processed meat factories and a decrease in supply in wholesale markets.  The pork price will stabilize to below 4,200 won in Chuseok (Korean Thanksgiving Day) holidays in early September when demand for beef increases.

AI Cessation to Be Declared in Late June at the Earliest [Korean, KSY]

http://www.newsis.com/ar_detail/view.html?ar_id=NISX20140528_0012947748&cID=10201&pID=10200

SUMMARY:  Jun-won Lee, Assistant Secretary of the Ministry of Agriculture, Food, and Rural Affairs (MAFRA), announced that the termination of avian influenza (AI) will be declared in late June at the earliest.  According to the standard operating procedure, the process of AI termination can begin 30 days after the last culling had been completed, which is June 24^th in Korea's case.  Cancelling standstill orders and virus investigation will take maximum 15 days.  Assistant Secretary Lee predicted that AI free status can be obtained again in late August.  The current AI has lasted 5 months, with 13.87 million poultry culled.

Westernization of Korean Diet?...Consumption of Cheese Jumps 87% in 10 Years [Korean, KSY]

http://news.heraldcorp.com/view.php?ud=20140528000114&md=20140528080000_BK

SUMMARY:  The westernization of the Korean diet and increasing number of dining out caused a huge increase in cheese consumption and a growing rate of dependence on cheese imports.  According to Nonghyup Economic Research Institute, the cheese consumption rose 87.7% from 52,900 tons in 2002 to 99,300 tons in 2012.  During the same period, the amount of cheese imports rose 42.2% from 45,500 tons to 77,500 tons (in terms of monetary value, the cheese import rose 322.7% from $0.85 billion to $3.60 billion).  The United States was the biggest cheese exporter to Korea with a market share of 41.1%.  New Zealand came second with 30.8%, followed by Australia (9.7%), and Germany (4.7%).  According to USDEC, the US cheese export to Korea rose 352.6% from 10,875 tons in 2009 to 49,229 tons in 2013.  On the other hand, the production of cheese in Korea only increased 8.7% from 20,700 tons in 2002 to 22,500 tons in 2012.  The self-sufficiency rate of cheese in Korea is expected to decrease due to opening of market including FTAs.

Brazilian Pork... To Be Served at Our Dining Table? [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232349&subMenu=articletotal

SUMMARY:  Brazil, one of the biggest pork producers, is attempting to enter into Korean market.  Brazil currently exports 600,000 tons of pork annually, with Russia and Hong Kong being the largest importer.  Korea is an attractive market for Brazil as it is one of the worlds largest pork importers.  Korea imported 322,000 tons ($910 million worth) of pork in 2013 from the United States, Germany, and Chile.  In addition, the fact that Japan began importing Brazilian pork since last May is fueling the hopes that Korea will soon follow Japan's footsteps.

5. MARKETING ISSUES

Local Processors Increase Price of Hams and Sausages as Ingredient Pork Meat Price Jumps [Korean, OSY]

http://news.donga.com/3/all/20140527/63814128/1

Summary: Lotte Food, a leading processor of hams and sausages announced on May 27 that it was going to increase the price of its products by 9.4 percent on average on June 1.  Lotte explained that the price increase was due to the strong price of ingredient pork meat.  It was reported that price of local pork meat had gone up to 4,000 won per kilogram this year (3,000 won last year).  Other leading processors of hams and sausages are likely to increase the price sooner or later.

MPK Group Launches 'Bakery Cafe' Chain ... Targets to Open 500 Outlets Within Three years [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014052274191

Summary: MPK Group, the franchiser of Mister Pizza stores, announced on May 23 that its bakery cafe chain 'Manopin' was launched with opening of the first store in Seoul.  MPK added that it was planning to open 500 Manopin stores within three years.

6. OTHER MISCELLANEOUS ISSUES

Approaching Samgyetang Export to the US... Samgyetang Expected to Increase Export of Korean Agricultural Food Products [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232723&page=

SUMMARY:  It took 10 years for Korean Samgyetang (Ginseng chicken soup) companies to pass the US safety standards. On May 27^th this year, the law that allows Korean processed poultry to be exported to the United States came into effect.  A few more administrative procedures are expected to be completed within this month.  Two Korean exporters, 'Harim' and 'Maniker', are targeting Korean and Asian residents in the United States.  The positive aspects about Samgyetang are that it is a nostalgic food for Koreans and it is exclusively produced in Korea.  The uncertainty of success comes from the fact that only the instant version of Samgyetang will be sold.  However, Harim is confident that there is not much difference between a frozen-packed Samgyetang and the normal Samgyetang.  Companies aim to begin selling Samgyetang before Chobok (first of the three dog days, when Koreans traditionally eat Samgyetang) on July 18^th.  The US branch of Korea Agro-Fisheries & Food Trade Corporation (aT) is ready to support Samgyetang export.

Korea Obtains Four Disease-Free Status from OIE [Korean, KSY]

http://www.edaily.co.kr/news/NewsRead.edy?SCD=JA11&newsid=03257046606093512&DCD=A00101&OutLnkChk=Y

SUMMARY:  Korea obtained 4 titles of disease-free status from OIE (World Organization for Animal Health), including 'Free of FMD (foot-and-mouth disease) with vaccination'.  According to the Ministry of Agriculture, Food, and Rural Affairs (MAFRA), the status was obtained 2 years after the FMD outbreak in 2011.  MAFRA is planning to receive FMD free without vaccination status in 3 to 4 years.  Korea also attained ' BSE (bovine spongiform encephalopathy) risk', 4 years after receiving Controlled BSE risk status.  Korea is also AHS (African horse sickness) and PPR (peste des petits ruminants) free member.

Hyorin, "Start Your Day with Delicious California Almonds" [Korean, KSY]

http://www.newsis.com/pict_detail/view.html?pict_id=NISI20140526_0009719768

SUMMARY:  Hyorin from girl band Sistar attended the 'Good Day Concert' hosted by Almond Board of California on the 26^th.

[Focus] Inspections of Agricultural Trade Issues, Origin Verification of US Orange Juice Controversy over Accepting Quality Certificate as Certificate of Origin[Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=232317&subMenu=articletotal

SUMMARY:  Orange juice was one of products that benefitted the most under the Korea-United States Free Trade Agreement (KORUS FTA).  According to Korea Customs and Trade Development Institute, the import value of orange juice grew 206% from $16 million before FTA came into force (March 2011 to February 2012) to $49 million in the second year of implementation (March 2013 to February 2014).  Korean mandarin farmers began to be concerned that the demand for domestic mandarin juice will decline.  In February 2013, Korea Customs Service (KCS) found evidence that US orange juice companies are not following the 'wholly obtained' criterion, which must to be abided by in order to benefit from preferential tariff under KORUS FTA.  KCS carried out a thorough investigation and demanded for additional certificate of origin.  The United States filed complaints against these actions.  After negotiations, Korea decided to accept 'certificate of quality' as the document that proves the country of origin.  However, some argue that this method violates 'direct verification' rules.  Joo-sun Park, a member of New Politics Alliance for Democracy, insisted that the government has to clarity if this agreement is an amendment to KORUS FTA.  <Orlando Sentinel> reported that the quality certificate is not much use.  On the contrary, Ministry of Trade, Industry, and Energy (MOTIE) explained that quality certificate is just means of assistance and additional verifications take place anytime if there is anything problematic.  MOTIE added that there are no changes in direct verification rules or amendment of KORUS FTA.

New Zealand Agricultural Products Gaining Popularity in Korea[Korean, KSY]

http://www.newspim.com/view.jsp?newsId=20140522000526

SUMMARY:  New Zealand Trade & Enterprise (NZTE) announced on the 22nd that the New Zealand agricultural products are becoming very popular in South Korean market.  According to Global Trade Atlas, the export from New Zealand to Korea grew 49.4% from 981 billion Korean won in 2009 to 1.47 trillion Korean won in 5 years.  The export of New Zealand beverages including wine and beer grew 61% during the period.  Especially, beer export increased tremendously, showing 11.7% growth compared to the previous year.