FAS/Seoul Monitoring of Media Reporting on Agricultural Issues

Today's Date:   Thursday April 10, 2014

For Coverage:   April 1 ~ 10, 2014

1. BILATERAL/MULTILATERAL ISSUES

WTO Rejects Philippines Request for Extended Waiver on Rice Tariffication ...Will It Accelerate the Discussion on Rice Market Opening in Korea? [Korean, KSY]

http://www.hankyung.com/news/app/newsview.php?aid=2014040950611

SUMMARY:  WTO rejected Philippines' request for an extended waiver of rice tariffication, despite the dramatic expansion of minimal market access (MMA) with lowered tariff.  This is expected to accelerate the discussion on rice tarrification in Korea.  The Korean government planned to decide on rice market’s opening by June, but it has not made any progress due to strong resistance.  The opposition insist that there is a way to maintain the amount of MMA without rice tariffication.  However, the case of the Philippines lends weight to the argument that Korea should open its rice market.

Korea-New Zealand FTA Faces a Rough Passage...Korea Not to Be Constrained by TPP [Korean, KSY]

http://www.etoday.co.kr/news/section/newsview.php?idxno=898858

SUMMARY:  The free trade agreement negotiations between Korea and New Zealand, which were held for three days from March 26th, ended without any particular result.  Korea suggested a plan that minimizes the opening of the agricultural market, while New Zealand demanded for an expansion.  The Korean government is not expected to step back from protecting its agricultural market, saying that 'Korea will not be constrained by participation in the Trans-Pacific Partnership.  A rough passage in FTA negotiation is predicted in the meetings of chief negotiators in April, with a high chance of facing prolongation until it is signed.  The two countries already have a history of a temporary pause in negotiation for 4 years over differences in opening agricultural markets.

KAFTA Officially Signed...Ratification by National Assembly Has a Rough Road Ahead [Korean, KSY]

http://news.hankooki.com/lpage/economy/201404/h2014040903365021540.htm

SUMMARY:  Korea-Australia Free Trade Agreement (KAFTA) was officially signed on the 8^th.  KAFTA, Korea's 11^th FTA, will expand the economic territory to 57.3% of the international GDP.  KAFTA is not expected to have a huge effect on Korean economy.  According to 6 research centers such as Korea Institute for International Economic Policy, Korean GDP will grow 0.14% in next 10 years, consumer benefit will merely reach US$ 1.6 billion, and trade deficit will grow.  A surge in export of the car industry and stable supply of natural resources is expected.  The biggest issue is the livestock industry.  The Korean government insisted that it will come up with measures to protect the Hanwoo industry, but no detailed plans were disclosed.  Because of the opposition party, ratification by the National Assembly is predicted to go through a rough road.

FTA Counterparts are Taking Over Fresh Meat and Dairy Product Market [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=230369&subMenu=articletotal

SUMMARY: Free trade agreements (FTA) are having a negative effect on the Korean livestock industry.  p imports from Chile increased from 12,073 tons in 2003 to 19,469 tons in 2013.  The total imports of the EU pork rose 33.5% to 326.326 tons during the two years after the implementation of FTA (July 2011 to May 2013), compared to 244,436 tons during the two years before the FTA (July 2009 to May 2011). The dairy products from EU shocked the Korean market with a large tariff rate quota (TRQ). The EU TRQ of milk powder increases 3% per year from 1,000 tons, and the EU TRQ of cheese also increases 3% per year starting from 4,560 tons.  Some people say that they are relieved to see the U.S. beef import declining, but it is only an illusion.  It is true that the amount of U.S. beef import decreased gradually from 107,202 tons in 2011 to 89,239 tons in 2013.  The amount of U.S. pork and U.S. chicken import all decreased.  However, the experts say that the decrease is temporary due to a severe drought.  On the other hand, import of dairy products from the United States soared from $138 million in 2012 to $209 million in 2013 because of the increased TRQ.

2. BIOTECHNOLOGY ISSUES

Worrisome about U.S. GMO-contained products become an ‘Organic’ in Korea [Korean, HYD]

http://news.hankooki.com/lpage/economy/201404/h2014040803371921500.htm

Summary:  Korea and U.S. are starting negotiation, whether U.S. GOM-contained products can be accepted as ‘Organic’ in Korea. In Korea, any of GMO ingredients is not permitted to get an authorized ‘Organic’ label, but in the U.S, under the 5% of GMO ingredients are permitted. In this organic negotiation, Korea government must strongly insist on the none-GMO policy to protect Korean Organic industries.

Opposition against Korea-U.S. Organic Equivalency Agreement [Korean, KSY]

http://www.idaegu.com/?c=2&uid=291165

SUMMARY:  Fifty members from Korean Federation of Sustainable Agriculture Organizations (KFSAO) protested against Korea-United States Organic Equivalency Agreement in front of the National Agricultural Products Quality Management Service building on the 8^th.  KFSAO criticized that Korea is accepting every demand of the United States instead of negotiating.  They pointed out that the United States permits adventitious presence and food additives that Korea does not allow and insisted that the United States will push its demand on condition of Korea's participation in Trans-Pacific Partnership.  The members of KFSAO demanded for a halt in the closed-door negotiation and instead foster plans for eco-friendly organic processed food industry.

3. GRAIN & OILSEED ISSUES

[Opinion] Atonement for 10 Lost Years of Korean Rice Industry (Jin-geun Sun, Honorary Professor of Chungbuk University) [Korean, KSY]

http://news.kukinews.com/article/view.asp?page=1&gCode=kmi&arcid=0008211424&cp=nv

SUMMARY:  The last 10 years of increasing minimal market access (MMA) without any measures was the 'lost 10 years of Korean rice industry'.  MMA with low tariff lessened the selling price and also the ratio of income from rice to total agricultural import.  It diminished willingness to grow rice, resulting the reduced grain cultivation and food self-sufficiency rate from 26.8% to 23.6%.  It also prevented export of Korean rice.  This would not have happened if Korea had opened the rice market in 2004.  The lost 10 years was due to the populist policies, government officials who lack belief, farmer groups that only oppose to the market opening, and scholars who seek the public interest.  What is still uncomprehending is that the government did not open the rice market in 2004 when the rice-related farmer groups agreed to rice tariffication.  The people who forced the last 10 years should apologize by opening the rice market.  The international rice price is increasing.  Therefore, if Korea imposes 400% tariff, the additional rice import would be prevented.  In addition, we have to cooperate to reinforce the competitiveness of rice and rice export during the limited period while the tariff lowers.  It is time that the rice market-opening be pursued for practical benefit.

MAFRA Targets 4.15 Million Tons in Rice Production...Estimates Rice Cropping Area to be 0.82 Million Hectare [Korean, KSY]

http://www.edaily.co.kr/news/NewsRead.edy?SCD=JA11&newsid=02204166606051856&DCD

SUMMARY:  Ministry of Agriculture, Food, and Rural Affairs (MAFRA), announced that this year's target amount of rice production is 4.15 million tons.  To manage supply and demand, the target amount is 80,000 tons larger than the estimated rice consumption in 2015 (4.07 million tons).  Still, it is 80,000 tons smaller than last year's rice production (4.23 million tons).  In addition, MAFRA estimates the rice cropping area to be 820,000 hectare.  The ministry will cooperate with Rural Development Administration (RDA), Nonghyup, Korea Rural Community Corporation (KRCC), and local governments to produce 506 kilogram per 10 hectares.

Distribution of 'Mixed Rice' Has Reached a Critical Level...Imported Rice Disguises as Korean Rice [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=230276

SUMMARY:  The distribution of mixed rice (mixture of domestic and imported rice) has reached a serious level.  Mixed rice is disguising itself as Korean by mimicking domestic brand and designs.  The country of origin is labeled with a small sticker.  The traders are blending rice because the price of mixed rice can be sold at a higher price than imported rice but lower price than domestic rice, and also because the repackaging does not cost much.  The ratio of imported rice has increased from nearly half to 95%.  The law does not restrict the mixture as long as the ratio is labeled.  Korean farmers are demanding for an improvement of the law that forbids any combination, and the National Assembly is planning to propose a bill.  However, the government is concerned that the regulation on mixed rice can turn into a commercial problem.

4. LIVESTOCK ISSUES

Hanwoo Sales Surpasses Pork Sales [Korean, KSY]

http://economy.hankooki.com/lpage/industry/201404/e20140406180740120210.htm

SUMMARY:  The sharp surge in the price of pork led to lower sales of pork than Hanwoo.  According to Lotte Mart, the sales of Hanwoo used to be only half of usual pork sales, but last month, it surpassed the pork sales by 30%. It is the first time in 16 years since Lotte Mart was established that the sales of Hanwoo overtook the sales of pork.  The reduction of sow and the outbreak of Porcine Epidemic Diarrhea caused the rise in the pork price.

Is U.S. Beef Reviving? [Korean, KSY]

http://news.mk.co.kr/newsRead.php?year=2014&no=537632

SUMMARY:  According to Lotte Mart, the sales of the U.S. beef during January to March grew 11.6% compared to last year.  The market share also increased from 21.1% to 27.4%.  The mart predicts that it will reach 30% in the summer if this trend continues.  The demand of high-quality U.S. beef is gradually recovering its level before 2003 when the U.S. beef imports were ceased due to BSE.  The changing perception about U.S. beef and the low price are the factors that draw the consumers in.

Microdust Effects Pork Price...30.2% Surge in the Price of Pork Belly [Korean, KSY]

http://www.yonhapnews.co.kr/bulletin/2014/04/02/0200000000AKR20140402146900030.HTML

SUMMARY:  According to Korea Institute for Animal Products Quality Evaluation, the price of pork belly surged 30.2% to 18,931 won per kilogram on April 1st, compared to a month ago.  The rise in demand for pork belly attributes to the widely spread folk remedy that pork cleanses micro dust.  On the other hand, the price of Hanwoo sirloin showed a little decrease of 2.9% to 41,050 won per kg during the same period. As a result, the sales of Hanwoo increased 35% during March.  There is a sign of rebound in the price of chicken. Chicken is sold at 5,694 won per kg, 0.8% increase from last month.  However, it is still 11.2% lower than the chicken price in April 2013 (6,413 won per kg).

Pork Import Expected Not to Increase Due to Rise of International Price [Korean, KSY]

http://www.nongmin.com/article/ar_detail.htm?ar_id=230488&page=undefined

SUMMARY:  The imports of pork cannot be increased rapidly because of the rise of international pork price.  According to Korean Rural Economic Institute (KREI), the pork import in February rose 6.7% to 21,190 tons compared to January.  However, the estimated amount of pork import from April to September will merely reach a total of 102,000 tons (17,000 tons in average).  It is 7.8% smaller than the average pork import.  The main cause of the rise in international pork price is the outbreak of porcine epidemic diarrhea (PED) in the United States, Canada, and Chile.  The rise of Chinese consumption is working as another factor.  Taiwan and Japan are also predicted to increase pork import.  The price of EU pork fell by 2% due to African swine fever, but it is rebounding with the hope that Asian countries will replace U.S. pork with EU pork.

Consumption of Cheese Rises while Self-Sufficiency Rate Falls [Korean, KSY]

http://www.asiatoday.co.kr/view.php?key=20140408010004675

SUMMARY:  According to Ministry of Agriculture, Food, and Rural Affairs, the consumption of cheese increased 83.7% from 58,600 tons in 2003 to 107,700 tons in 2013 due to westernized diet.  Especially, the consumption of natural cheese increased 146% from 33,400 tons to 83,200 tons during the same period.  Natural cheese import rose 254% from 21,700 tons to 76,800 tons.  On the other hand, the domestic natural cheese production fell 49.1% from 11,600 tons to 5,700 tons.  Self-sufficiency rate of cheese will decrease even further as the market of dairy products opens up with free trade agreements with EU, Australia, and the United States.  Jae-hong Park from Nonghyup Economic Research Institute insists that governmental support for process of raw milk should be expanded to maintain the Korean cheese industry.

5. MARKETING ISSUES

Korean Gov't to Promote Consumers Direct Purchases from Foreign On-line Shops ... No Tax on Purchases Up to $200 [Korean, OSY]

http://news.donga.com/3/all/20140410/62408468/1

Summary: Korean government has decided to further promote individual consumer's direct purchases from foreign on-line shops in an effort to lower the price of imported products in the market.  Many imported products are reported sold at very high price due to excessive mark ups taken by import-distributors.  For example, price of imported lip sticks sold in Korea was 9.2 times higher than the import cost on average according to the government survey.  The cabinet meeting on April 9 decided that shipment of $200 invoice value or less purchased and imported by individual consumer would be allowed to clear customs duty free from July 1, 2014.  Korean government commented that these efforts target to lower the retail price of imported product in Korea by 20 percent.

58.4 Percent of Koreans Make Efforts to Control Weight … Up 20 Percent Point in Six Years [Korean, OSY]

http://news.donga.com/3/all/20140409/62376823/1

Summary: According to Korea Disease Control Center (CDC), the ratio of Koreans who are making efforts to lose weight was 58.4 percent in 2013, up 20 percent point from six years ago.  However, the survey also revealed that Koreans were not making success in achieving the weight control goal.  The ratio of Koreans who were over-weighted (body mass index 25 kg/m2 or higher) increased from 21.6 percent in 2008 to 24.5 percent in 2013. 

Price of Local Onions and Garlic Plunges due to High Harvest [Korean, OSY]

http://news.donga.com/3/all/20140402/62220705/1

Summary: Wholesale market price of local onions amounted to 558 won per kilogram in March this year, which was about 50 percent lower than the price in the same month last year.  According to Korea Rural Economic Institute (KREI), production of spring onions was forecast to reach 120,900 metric tons this year, up 46 percent from last season.  Garlic price has also been on a steep decline due to excessive supply.  Despite the harvest from local farms is reportedly in better shape than last season, imports of frozen garlic from China more than doubled in February compared to the same month last year.  As a result, wholesale market price of local garlic fell 30 percent in March compared to the same month last year.

6. NORTH KOREA ISSUES

FMD Proliferates in North Korea...Alarming the Farms near Border Areas [Korean, KSY]

http://www.hani.co.kr/arti/society/area/630895.html

SUMMARY:  The foot-and-mouth disease (FMD) that broke out in North Korea has spread near the demilitarized zone (DMZ), alarming the farms located in border regions of Gyeonggi and Gangwon Province.  Pyongyang's official news agency announced that 3,200 pigs were affected, and UN FAO recently found 4 affected cows in the collective farm in Gangwon Province during their visit from March 14^th to 21^st.  Gyeonggi provincial government will vaccinate 650,857 livestock in 3,027 farms.  It is planning to reach 100% in antibody possession through vaccination. Gangwon provincial government set out an emergency vaccination on 215,000 livestock.  MAFRA is attempting to be recognized as ‘FMD free country’ in the OIE general session next month.

7. MAFRA PRESS RELEASES

Korea-U.S. Talks on Organic Equivalency Agreement Begins [Korean, KSY]

http://www.mafra.go.kr/list.jsp?&newsid=155445533&section_id=b_sec_1&pageNo=1&year=

SUMMARY:  According to National Agricultural Products Quality Management Service, full-fledge talks between Korea and the United States on Organic Equivalency Agreement will be held during April 9 – 10, 2014 in Korea.  Until 2013, organic labelling was permitted if the organic processed food had foreign organic certificate.  From 2014, organic labelling is only allowed to the products that have domestic certificate or organic equivalency approval by the law.