FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Monday March 17, 2014

For Coverage:   March 10 ~ 17, 2014

 

 

1. BILATERAL/MULTILATERAL ISSUES

 

Ambivalent Evaluation on CKFTA [Korean, KSY]

http://www.newsis.com/ar_detail/view.html?ar_id=NISX20140312_0012781452&cID=

SUMMARY:  Ruling and opposition parties have a mixed evaluation on Canada-Korea Free Trade Agreement (CKFTA).  Saenuri party welcomed CKFTA, claiming that the preferential conditions will level playing field for Korean exporters.  On the other hand, Minjoo party, the opposition party, criticized CKFTA, calling it 'abnormal'.  Soo-hyun Park, spokesperson of Minjoo party, argued that the negotiation resumed abruptly last November and was settled with only one official working-level meeting, without any gathering of public opinion or report of the National Assembly.  He also pointed out that the talks came to a halt 4 years and 7 months ago because the government judged that CKFTA has no actual profit.  Congressman Seung-nam Kim, who is also a member of Agriculture, Food, Rural Affairs, Oceans, and Fisheries Committee, asserted that CKFTA without any subsidy measures for the farmers is like sentencing them with a time-limited life.

 

Korea-Canada FTA Initialed – What Impact Will It Have on Agricultural Market in Korea? [Korean, KSY]

http://news.kukinews.com/article/view.asp?page=1&gCode=kmi&arcid=0008124995&cp=nv

SUMMARY:  Korea-Canada Free Trade Agreement (FTA) was initialed on March 11^th, 2014.  Canada expects to enlarge its agricultural export to Korea, especially in meat and grains. The biggest impact the FTA will have is on the pork industry. Canadian pork export to Korea was a total of 43,398 tons, a runner up behind the United States.  In monetary value, Canada ranked the 4^th with US$ 79.76 million.  Combined with already existing huge consumption, the market share of Canadian pork will benefit from lower tariffs.  Beef industry will also be affected.  Even though Canada takes up only 0.6% of the imported beef market, lowered tariff will increase consumption.  Korea is also an emerging beef market to Canada, with its ever-growing size.  The influence of the FTA on other Korean agricultural industry seems insignificant.  Wood pulp and coniferous hardwood, which are the top 2 imported products from Canada, are already entering duty-free.  In case of wheat, which ranked the top 3, Korea mostly relies on imports. Other 211 sensitive agricultural products, such as milk powder, cheese, butter, Fuji apple, pear, pepper, garlic, and ginseng, are excluded from the concession.

 

2. LIVESTOCK ISSUES

 

AI hits hard…80% Plunge in Poultry Exports [Korean, KSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031135961

SUMMARY:  According to the Ministry of Agriculture, Food, and Rural Affairs, poultry export this February plunged 80.9% from US$ 3.4 million to US$ 0.6 million.  The amount of export also declined 93.9% from 2,900 tons to 200 tons.  This plunge is due to the avian influenza (AI) outbreak on January 16th.  Export of fresh poultry meat ceased immediately after the AI outbreak is reported to World Organisation for Animal Health.  Heat processed food such as Samgyetang is excluded from the restrictions, but the consumption tends to decrease.  The restriction is lifted only when the country retrieves its AI-free title, which takes at least 5 months.  An authority from Korea Poultry Association claims that the loss in February was nearly US$ 3 million.  The authority was concerned that the damage can sum up to more than US$ 20 million if AI crisis drags out too long.

 

HPAI Diagnosed in Sejong City [Korean, KSY]

http://www.ajunews.com/view/20140313090510380

SUMMARY:  Highly pathogenic avian influenza was diagnosed in a layer chicken farm in Sejong city.  The disease control team will cull 390,000 poultry within the 500m radius.

 

Disobeyed Action Guidelines to Blame for Recent AI Outbreaks [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229533&page=undefined

SUMMARY:  ‘Preliminary Clinical Test System’ which was implemented to prevent the horizontal transmission of the highly pathogenic avian influenza (HPAI) is not properly obeyed.  According to the Ministry of Agriculture, Food, and Rural Affairs, the recent outbreak in Anseong, Gyeonggi was caused by negligence of a health official.  Epidemiological investigation showed that the official faxed the approval of transfer without visiting the site.  As the crisis drags on, the alert against AI is lowering.  Experts say that the disease control guidelines should be followed until the AI comes to a complete end.

 

3. MARKETING ISSUES

 

Egg Price Surges 15% as More Birds are Depopulated for Avian Influenza Outbreaks[Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031675281

Summary; According to Korea Chicken & Egg Farms Association, wholesale price of fresh eggs on March 13 marked 158 won per one top grade egg, which was 15 percent higher than the price three weeks ago.  According to the association, over 3 million out of 45 million hens kept in the industry for egg production purpose have been depopulated due to outbreaks of avian influenza over the last several months.   

 

Luxury Hotel Welcomes Alaskan King Crab … Lotte City Hotel Jeju Hosts ‘Alaskan King Crab Promotion’ [Korean, OSY]

http://news.mk.co.kr/newsRead.php?year=2014&no=395129

69.2 Percent of Korean Exports to the U.S. by Small to Medium Scale Companies Benefited Tariff Reduction under KORUS FTA in 2013  … Up 9.8 Percent Point from the Previous Year  [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031271431

Summary: Korean embassy in the U.S. reported on March 11 that 69.2 percent of Korea’s exports to the U.S by small to medium scale companies in 2013 utilized reduced tariffs under the Korea-U.S. Free Trade Agreement (KOFUS FTA), which was 9.8 percent point higher than the previous year.  The report indicated that increased number of small to medium scale Korean companies were developing the capacity to utilize the KORUS FTA and the ratio of Korean exports to the U.S. that benefits tariff reduction under KORUS FTA would continue to rise in the coming year.

 

‘G7’, E Mart’s PB Wine Reports 2 Million Bottle Sales [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031097441

Summary: E Mart, the leading discount retailer in Korea reported on March 10 that its private label wine brand ‘G7’ had marked 2 million bottles of sales in early March.  G7 was launched five years ago and is sourced directly from a partner winery in Chile, which allowed E Mart to get rid of the middlemen markups and offer rock bottom price, 6,900 won per a bottle, to the consumers.  E Mart added that low price wine continues to lead the sales growth of its wine department.  Eight out of 10 bottles of wine sold in E Mart in 2013 were less than 20,000 won a bottle.  Bottles under 10,000 won accounted for 44.9 percent of E Mart’s wine sales in 2013.

 

Junior’s Cheesecake, a Popular American Cheesecake Shop, Enters Korea [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014030966691

Summary: Lotte Department Store reported that its new dessert section would open on March 11.  Lotte added that the dessert section will house several new-to-market dessert shops, including ‘Junior’s Cheesecake’, an American cheesecake shop that got famous after president Obama’s recent personal visit to a store in Washington D.C.

 

4. OTHER MISCELLANEOUS ISSUES

 

“Subsidies Weakened Agricultural Competitiveness of Japan” [Korean, KSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031134781

SUMMARY:  Wall Street Journal reported that young Japanese farmers are starting to question the effects of agricultural subsidies.  The size of agricultural subsidy in Japan is 52% of the total agricultural income, ranking 4^th behind Norway, Switzerland, and South Korea.  The reformists assert that Japanese agriculture is aging and also loosing global competitiveness due to an old subsidizing system.  Hajime Kobayashi, the head of Japan Agricultural Group (JA), insists that JA drove enterprising farmers away.  JA is a group that buys produce, enforces production limits, and provides financial aids to farmers.  He argues that the government should let Japan compete with major rice producers such as China and the United States.  The Japanese government discarded its 50-year-old production control policy to maintain the rice price level to reinforce agricultural competitiveness under Trans Pacific Partnership.  If subsidies are abolished, the market will determine the supply instead of having the government control the production.  Some farmers have established an alternative organization that set the appropriate price level.

 

 

[Editorial] Agricultural Protectionists Did Not Even Write a Word in the Apology Letter [Korean, KSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031135841

SUMMARY:  Japanese farmers are demanding for no more agricultural subsidies.  They accuse the subsidy for the failure of generation shift and Japan Agricultural Group for interrupting agricultural reform.  In addition, Abe's plan to fund the farms as a remedy for Trans Pacific Partnership only grew suspicion against the government.  However, what is the case in Korea?  According to Organization of Economic Cooperation and Development, the percentage of subsidies over total income of Korean farmers is 53%, similar to Japan (53%) and way higher than EU (18%), China (17%), and the United States (7.7%).  Even so, Korean farmers want more.  Every time FTA comes up, farmers fight against it, and the government comes up with an extreme financial aid as a cure.  Korea-Chile FTA shows how unrealistic this is.  Farmer groups asserted that the damage will be more than 2 trillion won, but in reality, income of grape growers doubled.  Support funds such as closure support funds all went to waste.  Nevertheless, the government will pour more money into agricultural assistance again this year. When will we ever hear Korean farmers demanding for no more agricultural subsidies?

 

5. MAFRA PRESS RELEASES

 

<March 10, 2014> MAFRA’s Countermeasures against AI (Korean, KSY)

http://www.mafra.go.kr/list.jsp?&newsid=155445434&section_id=b_sec_1&pageNo

SUMMARY:  Ministry of Agriculture, Food, and Rural Affairs (MAFRA) took instant measures as soon as receiving a suspected avian influenza (AI) report from Gyeongju, Gyeongbuk.  Through an emergency epidemiological investigation, it was found that the outbreak was caused by chicks brought from a farm in Pyeongtaek.  The chicks were also brought to another farm in Gyeongju and other farms located in Ansung, Gyeonggi; Gunsan and Iksan, Jeonbuk.  These farms are currently under a standstill order and going through preventive culls.  About 8.61 million poultry from 363 farms are culled so far, and 0.43 million more will be culled.