1. BILATERAL/MULTILATERAL ISSUES

Korea-China FTA, 10th Negotiation Concluded...'A Tense Battle of Nerves' [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/03/21/0200000000AKR20140321056951003.HTML

SUMMARY:  The 10^th meeting of Korea-China Free Trade Agreement (FTA) concluded without much advance.  Korea demanded manufactured products such as petrochemistry, steel, and machinery to be included in concession, but China expressed unwillingness due to weaker competitiveness and growing trade deficit.   Meanwhile, China was dissatisfied with Korea’s reluctant reaction towards opening the agricultural market.  In the field of service and investment, China disapproved Korea’s request for a wide liberalization.  China also resolutely refused to Korea’s constant demand to include Illegal, unreported and unregulated fishing (IUU) issue in the economic cooperation.

Farmers against FTA and Rice Market Opening [Korean, KSY]

http://news.khan.co.kr/kh_news/khan_art_view.html?artid=201403192143295&code=920501

SUMMARY:  Farmer groups are fighting against the government’s negotiation on free trade agreements (FTA) and plan to open the rice market.  The ‘Emergency Measure Committee for Discontinuation of Korea-China FTA Negotiation’ requested for a halt of FTA negotiations with China, Australia, and Canada during the press interview on the 19^th, claiming that agricultural industry has always been merely a ‘bargaining card’ for the benefit of other industries.  Farmers are also enraged by the rice market opening.  Ministry of Agriculture, Food, and Rural Affairs held an agricultural policy conference with the farmers, but they insist that the meeting is only a publicity tool for government policies.  Farmers criticize the government that it has not even attempted to inquire WTO to maintain the status quo.  On contrary, the government authority complains that the farmers’ requirements are unrealistic.  The government has only about a month left to convince the farmers.

'KORUS FTA' No Price Reduction Despite Lowered Tariff [Korean, KSY]

http://news.jtbc.joins.com/html/167/NB10446167.html

SUMMARY:  It was expected that the Korean consumers will be able to enjoy lowered price of US agricultural products thanks to the Korea-United States Free Trade Agreement (KORUS FTA).  In reality, however, the price of many products went up even though the tariffs were cut.  For instance, the price of orange juice or fresh oranges rose from 3,800 won to 5,100 won per kilogram after the FTA was implemented.  The price of beef also soared over 50% to 24,200 won per kilogram.  This is because the benefit from lowered tariff went to wholesalers and retailers instead of consumers.  The distribution process of imported products should be improved in order for lowered tariff lead to price cuts.

2. ECONOMIC ISSUES

Korea Ranks 17th in GDP of Agriculture, Forestry, and Fisheries [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229796&page=undefined

SUMMARY:  According to a report by Korea Rural Economic Institute, Korea ranked 17^th in gross domestic product of agriculture, forestry, and fishery industry with US$26.9 billion in 2011.  The agricultural population ranked 78^th, recording 2.91 million in 2012.  The number declined 45.8% compared to that of 10 years ago, which was the biggest drop among the major countries.  The size of farmland was 1.7 million hectare and was positioned at 96^th.  The farmland per household was close to the world average of 0.6 hectare.  Despite the poor agricultural infrastructure, 6 products were ranked within the top 10 in amount production.  The products are spring onion, cabbage, garlic, spinach, strawberry, and tangerine.

Trend of US Agricultural Import...Total Import Amount Decreased due to Drought [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229714&subMenu=articletotal

SUMMARY:  According to Ministry of Agriculture, Food, and Rural Affairs, the total amount of agricultural imports from the United States from March 2013 to February 2014, the second year of Korea-United States Free Trade Agreement (KORUS FTA), was US$5.99 billion.  This is a 20.2% decrease compared to the year before the implementation of KORUS FTA (US$7.57 billion).  The main reason behind is the ongoing drought.  The grain import decreased from US$3.23 billion to US$1.46 billion and the livestock import decreased 12% from US$ 1.71 billion to US$1.50 billion.  On the other hand, the import of processed products such as cheese and whey is on upturn thanks to the enlarged tariff rate quota.  Especially, the amount of nonfat dry milk grew 6.5 times from US$4 million to US$26 million.  The import of fruits and vegetables jumped 35.2% to US$0.61 billion, and the import of process food rose 7.8% to US$1.58 billion.

3. GRAIN & OILSEED ISSUES

[Opinion] Argument for Suspension of Rice Tariffication Barked up the Wrong Tree [Korean, KSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014031984761

SUMMARY:  Those who oppose to rice tariffication claim that there is a provision of evidence in the WTO Agreement on Agriculture that allows Korea to negotiate for preservation of status quo on rice import.  There is a need to get to the bottom of this agreement.  The logic of this argument comes from clause 3 of appendix 5; Any negotiation on the question of whether there can be a continuation of the special treatment ...shall be completed within the time-frame of the implementation period itself as a part of the negotiations set out in Article 20 of this Agreement.  The antagonists interpret ‘negotiations set out in Article 20 of this Agreement’ as the Doha Development Agenda (DDA).  They argue that Korea can at least attempt to compromise for the status quo because DDA negotiation is ongoing and many developed countries do not abide by it for now.  However, the serious problem is that clause 3 does not apply to Korea.  Since Korea suspended rice tariffication as a developing country, clause 8 of appendix 5 should be applied.  Clause 8 differs from clause 3 in that any negotiation on the continuation of the special treatment ‘shall be initiated and completed within the time-frame of the 10th year itself following the beginning of the implementation period’.  This means that the negotiation for developing country, Korea in this case, has nothing to do with DDA.  Actually, Korea was able to suspend the rice market opening due to Uruguay Round (UR), which allowed the initial suspension (1995~2004) and the negotiation to prolong the period.  Korea utilized this clause and postponed the market opening to 2014, leaving it no legal way to suspend it anymore.  It is time to stop the consumptive debate, and start discussing the future of Korean agricultural policy.

Reaching the Targeted Self-Sufficiency Rate of Soybeans seems Unattainable [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229787&page=undefined

SUMMARY:  Reaching the targeted self-sufficiency rate of soybeans seems unattainable because there are no factors to increase the soybean cultivation.  The self-sufficiency rate of soybeans was 27.9% in 2012 and reached an estimated figure of 33.3% in 2013.  However, the production is not predicted to increase, making it harder to achieve a self-sufficiency rate of 36.3% in 2015.  The soybean planted area is predicted to decrease 8% and the production to decline 14~22% this year.  The problem is that there are no motivations for farmers to plant soybeans.  Tofu was designated as an industry adequate for small and medium sized companies, as soybean used big companies is reduced.  Moreover, the income diversification project, designed to decrease rice and increase soybean production, ended last year.  The outlook of soybeans appears gloomy in the medium to longer term with increasing tariff ratio quota (TRQ) under the FTAs.

In 2004 ~ 2009, Tofu Industry Benefit from Big Companies’ Participation in the Market [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229432

SUMMARY:  The tofu industry grew larger after big companies started to join the market.  According to a report by Korea Economic Research Institute, the number of tofu manufacturers rose over 9% from 1,435 in 2004 to 1,583 in 2009. The number of employees also rose 13.2% from 5,559 to 6,297 during the same period.  This fact contradicts to Small and Medium Business Administration’s argument that participation of big companies will force small and medium companies out of business and reduce jobs.  This will support the opinion that tofu manufacturing should be excluded from the list of industries suitable for small and medium sized business.

4. LIVESTOCK ISSUES

Farm in Jeungpyeong Diagnosed with HPAI, Culling Finished on 24th [Korean, KSY]

http://www.anewsa.com/detail.php?number=634147&thread=09r02

SUMMARY:  A chicken farm in Jeungpyeong, Chungbuk was diagnosed with H5N8 highly pathogenic avian influenza.  27,300 chickens in the farm were culled, and 33,600 chickens from  within 3km of the farm will be culled as a preventive measure.

AI Antibody Found in 12 More Dogs [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/03/24/0200000000AKR20140324072600030.HTML

SUMMARY:  Antibodies of avian influenza (AI) were found in 12 dogs raised in a farm in Cheonan and Buyeo, Chungnam.  Animal and Plant Quarantine Agency assumes that these dogs were fed with AI contaminated poultry.  The agency is planning to dissect a dog to see up to where the AI virus had passed through.  11.57 million poultry from 461 farms were culled, and 42,000 more from 3 farms will be culled.

Shortfall in Imported Pork Supply...Suspicion of Cornering [Korean, KSY]

http://www.nocutnews.co.kr/news/1206098

SUMMARY:  There is a shortfall in the quantity of imported pork in the retail market despite the increase in imports.  According to the statistics of Animal and Plant Quarantine Agency, the total amount of pork imported was 21,073 tons in January, a 35.3% increase from the previous month.  However, there is a shortage in imported pork and the retail price rose around 10%.  The question ‘where did all the imported pork go?’ raised a suspicion of cornering and hoarding by the importers.  Consumers argue that importers are storing the meat in the freezer and waiting for the price to go up.  However, importers insist that they are distributing imported pork to retail stores all over the country.

Supply of Poultry Has No Problem, despite the Culling [Korean, KSY]

http://news.kukinews.com/article/view.asp?page=1&gCode=kmi&arcid=0008144337&cp=nv

SUMMARY:  Even though the number of culled poultry hits record highs every day, the government claims that there will not be any problem in supply.  Ministry of Agriculture, Food, and Rural Affairs announced on the 17^th that 10.93 million poultry has been culled due to the ongoing avian influenza crisis.  However, because the number of culled poultry is only a small portion of the total poultry, the effect that culling has on supply will not be notable.  The percentage of culling is 4.7% for broiler chickens, 6.5% for layer chickens, 23.9% for ducks.  The consumption of poultry decreased around 60~70%, but it is starting to restore its normal level.  Moreover, 1.2% increase in the supply of broiler chicken and 5.7% increase in the supply of layer chickens in late 2013 are expected to boost the recovery.

Egg Price Soar 15% after the AI Storm [Korean, KSY]

http://biz.chosun.com/site/data/html_dir/2014/03/16/2014031602486.html

SUMMARY:  The price of egg on March 13th was KW158 per each, which is a 15% increase compared to the previous month.  The price rise despite the 10% decline in sales is due more to decrease in supply than increase in demand.  Three million out of 45 million layer chickens were culled due to the ongoing AI crisis.

AI Antibody Found in a Dog [Korean, KSY]

http://www.cctoday.co.kr/news/articleView.html?idxno=824402

SUMMARY:  Avian influenza (AI) virus antibody was found in a dog raised in a farm diagnosed with AI, located in Cheonan, Chungnam.  It is assumed that the dog was infected with AI through eating virus-contaminated chicken.  Antibody was not found in other 2 dogs raised in the same farm, and antigen was not observed in any of these 3 dogs.  This is the first cross-species transmission of AI in Korea.

5. MARKETING ISSUES

GS25 Rapidly Narrows the Gap to CU … GS25 May Become the Leading Convenience Store Chain in Korea within 2014 [Korean, OSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014032022281

Summary: GS25, the second largest convenience store chain in Korea, opened 562 new stores in 2013.  On the other hand, CU, the industry leader, opened only 2 new stores in 2013.  As a result, the difference in the number of stores under GS25 and CU was narrowed down to 200.  As of February 2014, GS25 had 7,721 stores whereas CU had 7,946 stores.  Industry analysts pointed out that GS25 is likely to become the largest convenience store chain in Korea by the end of 2014 because GS25 plans to open additional 500 new stores this year whereas CU plans to open 400 new stores.

Café Chains Focus on Opening Premium Stores … $10 for a Cup of Coffee [Korean, OSY]

http://news.donga.com/3/all/20140318/61822057/1

Summary: It is reported that leading café chains in Korea are expanding the ‘premium coffee’ outlets.  Starbucks Korea reported on March 18 that five of its stores in Korea will start to offer ‘reserve’ coffee.  Paul Bassett, a premium café chain run by Maeil Dairy Co. has added six stores over the last six months.  Two Sum Place, run by CJ Foodville, opened a premium store in Seoul earlier in March.  Price of a cup of coffee in these premium café shops runs from 7,000 won to 10,000 won (about $10).

6. OTHER MISCELLANEOUS ISSUES

Korea’s Agricultural Subsidy is less than Half of Developed Countries [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229883&page=

SUMMARY:  It was revealed that agricultural subsidy in Korea is less than half of that in developed countries; contrary to a recent article which claims that Korean agricultural subsidy is too much.  According to Korea Rural Economic Institute, the percentage of subsidy (Budgetary and Other Transfers (BOT)) to gross agricultural output in Korea was only 5.6% in 2012, which is less than one-third of EU (18%) and less than half of the average OECD member countries (11.4%).  It even declined from 6.1% in 2010 and 5.7% in 2011. The misinterpretation of the term 'Producer Support Estimate (PSE)' made people believe an economic magazine that argued agricultural subsidy reached 53% of total farm income in Korea.  However, the PSE calculated by OECD includes not only BOT but also Market Price Support (MPS), differing from normal concept of subsidy as the MPS is included.  Korea is regarded as a country that receives high MPS because most of the domestic agricultural price is higher than the international price.  Jin-Kyo Suh, a researcher in Korea Institute for International Economic Policy, insists that Korea has only 1~3% of total agricultural output as support, while WTO allows 10% to developing countries.  He added that Korea should bear in mind the trend of increasing agricultural subsidy in Europe and the United States.

Calorie Self-Sufficiency Rate Drops to 41%, the Lowest Record Ever [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=229411

http://www.nongmin.com/article/ar_detail.htm?ar_id=229424

SUMMARY:  Calorie self-sufficiency rate dropped to 41.1% in 2012, recording the lowest since 1962.  The rice self-sufficiency rate which was over 100% until 2010 declined to about 80% in 2011 and remained the same level in 2012.  Korean government’s goal to keep calorie self-sufficiency rate to 55% in 2020 seems unachievable at this rate.  This is due to shrinking farmland, westernized diet, and increase in agricultural import.  Urban development and industrialization caused a 170,855 hectare decrease in farmland in past 10 years.  Also, the consumption of the ingredients used in making western foods increased whereas the consumption of rice, which is traditional staple, dropped.  Furthermore, the free trade agreements with big agricultural exporters enlarged the amount of agricultural import.