The 2012 Agricultural Outlook Forum on February 2, 2012 in Seoul, covered production and marketing trends in the Korean rice, livestock, fruit and vegetable, and food processing and manufacturing sect
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number: KS1208
Korea - Republic of
2012 KREI Agricultural Outlook Forum
M. Kathryn Ting
The Korea Rural Economic Institute (KREI) held the 2012 Agricultural Outlook Forum on
February 2, 2012, in Seoul. The conference covered production and marketing trends in the
Korean rice, livestock, fruit and vegetable, and food processing and manufacturing sectors.
The forum also included presentations on the impact of free trade agreements on the Korean
agricultural sector, as well as on ongoing efforts to boost the vitality of the Korean agricultural
sector. Sessions also covered organic, environmentally-friendly and local food trends; school
lunch programs and impacts of climate change on agriculture.
The Korea Rural Economic Institute (KREI) held the 2012 Agricultural Outlook Forum on
February 2, 2012, in Seoul. The forum covered a total of 33 topics, ranging from free trade
agreements (FTA) to climate change. The following is a summary of the sessions attended by
2012 Agriculture, Farming and Food Industry Outlook
World Major Countries‟ Economic Situation: The world economy in 2012 will be heavily
affected by the direction of the European financial crisis. Major developed countries will
tighten their belts to ensure their own fiscal soundness and developing counties will also
tighten their money to counter high prices coming from the rapid increase in liquidity. The IMF
and World Bank‟s most recent reports forecast that the world economy may grow only 3.4% in
Korea‟s Economic Situation and Outlook: In 2011, the Korean economy grew 3.8% up from
2010. However, an even slower growth, 3.6 percent, is expected in 2012. The domestic
economy will be impacted by increasing consumer price and household debts, depreciation of
assets and reduced the Social Overhead Capital investment by the government. Exports may
not grow due to the global economic recession and relatively strong Korean currency.
Korean Food Industry Situation and Outlook
Food Manufacturing Industry: In 2009, Korea manufactured $57.4 billion of food, up 9.1% from
$52.6 billion in 2008. The food sector showed a 11.7% growth, while the beverage sector and
tobacco sector showed a1.9% and 0.2% decline respectively.The total value of Korea‟s food
manufacture will slowly increase on a long-term basis.
Impact of the Spread of FTA and our Counter agenda
Korea has entered 8 FTAs into force with 45 nations and is currently negotiating FTAs with 12
nations. It also has a number of FTAs currently undergoing feasibility studies. In 2010, 53
percent of total agricultural imports came from countries where there is a FTA. With respect to
the KORUS FTA, projections are that Korean agricultural production will drop by 678.5 billion
won (US$605.8 million) in year 5. This is projected to further go up to 991.2 billion won
(US$885 million) in year 10 and 1,235.4 billion won (US$1,103 million) in year 15. The total
accumulated production drop for 15 years after its implementation is 12,225.2 billion won
The total amount of support to be provided to farmers due to KORUS FTA is 23.4 trillion won
(this is about US$ 20.9 billion and does not include the 0.7 trillion won for fishery). Out of this,
7 trillion won will come from the 119 trillion won farm support program. Some of the support
programs include direct payment for farmers that suffer losses due to FTA, compensation for
farmers that stop farming, training, modernization of livestock facilities, insurance, direct
payment for stabilization of income, etc. The presenter stressed the need for enhancing the
efficacy of support programs and efforts by the agricultural sector itself.
Overview & Outlook of the Korean Food Processing Industry
Production & Added-Value
Total production of the Korean food processing industry is estimated at 69.4 trillion won
in 2011, up 5.5 percent from the previous year. The annual growth of the industry
production has been on a decline since 2008. Total value added by the industry is
estimated at 24 trillion won in 2011, up 4.9 percent from the previous year. The ratio of
added value over total production has declined to 34.5 percent in 2011, a significant
decline from 40.9 percent in the mid 2000‟s.
Trends by Product
Products that led the growth between 2005 through 2011 were processed livestock
meat, processed produce, processed grain, and processed fat & oil. On the other hand,
processed dairy products and beverages showed less growth during the period.
Changes in consumer preferences (such as healthy diet), alternative demand for price
inflation (such as dining out), and new growth in demand (such as packaged Kimchi)
were the major reasons for increased production in the industry.
Total exports of the industry amounted to $3 billion in 2010. Processed products have
been accounting for a half of total Korean agricultural exports since 2006.
Major export products were tobacco, processed prepared foods, table sugars, instant
coffee, and instant noodles. Japan, China, and the U.S. were the major export market
Total exports in 2011 through November amounted to $3.9 billion, up 25.8 percent from
the previous year. Products that showed strong export growth in 2011 were beverages
(bottled water and coffee drinks), instant coffee mixes, liquor (rice wine and beer), and
Total number of food processing companies in the industry was 4,169 in 2009, up 21.5
percent from 2000. However, the number of companies that sell less than 1 billion won
of annual sales accounted for 19.4 percent of the industry, a significant decline from
39.1 percent in 2000.
Large companies are maintaining dominant market share for many products. For
example, top 4 processors accounted for 76 percent of noodle production, 61 percent of
tea production, and 56 percent of cooking oil production.
Large companies showed much higher per labor added value than small companies.
Increased numbers of food processors are developing products in cooperation with
regional farmer groups for higher brand recognition. For example, CJ has launched rice
wine in partnership with rice farms in Junjoo province.
Growth of the industry production is expected to slow down to 3 percent in 2012.
Beverage segment may be the slowest growing segment (2 percent).
Growth of single or dual member households and expansion of „silver‟ population will be
a force behind new industry trends.
Foreign markets, particularly China and South Asian countries, will show bigger
demand for Korean processed foods.
Bacon, packaged Kimchi, organic processed food, processed rice products, refrigerated
sauces, functional herb products, NFC fruit juices are likely to show strong production
growth in the coming year.
Environmental Friendly Ag. Products and Processed Organic Products Situation
The Korean government has been promoting the environmentally friendly agricultural product
(EFAP – including organic and no pesticide products) industry to improve the competitiveness
of local agricultural products. In 2011, EFAP accounted for 11 percent of Korea‟s total
agricultural products in value and is expected to increase to 19 percent by 2020. To date, the
promotion policy has been focused on the production side, and not consumption side. To
grow the industry and expand consumption to absorb the increased production, Korea needs
to think about how to attract more consumers and meet the consumer demand for EFAP. The
price of organic products is 1.9 times higher than conventional products. One survey also
shows that over 75 percent of consumers thought that EFAP was expensive. Reducing
product cost, improving distribution channel, building up a reliable certification system,
diversifying processed products, and introducing EFAP to the school meal program would help
expand the EFAP market in Korea. For processed organic products, as demand increases,
production of organic products in Korea would increase. As Korea is highly dependent on
imported organic ingredients, imports of organic ingredients would increase accordingly.
Imports of finished organic products are expected to continue to increase steadily.
Improved Product Supply to School Feeding Program
Official school feeding program started in 1997 in elementary schools, and expanded to
high schools in 1999 and to middle schools in 2003. 99.9 percent of Korean students,
about 7.18 million students in 11,389 schools, are covered by the program.
Outbreaks of food poisoning incidents in 2006 encouraged more schools to switch from
commercial service to direct operation. As of 2010, 95 percent of schools are running
the program directly.
Majority of the schools are procuring food products for the feeding program on their
own. 26 percent of the schools are doing a group purchase with other schools.
For more stable and safe supply of products, group purchases are encouraged, but the
schools need support and guidance from the local and central government.
Policy makers and administrators of the school feeding program should pay attention to
developing new measure that will encourage the school feeding program to use more
environment-friendly and locally grown agricultural products.
Local Food & Regional Specialty Food Market Opportunities
As the distribution channels for food and agricultural products diversify, there is growing
consumer interest in locally produced food. Farmers and retailers also want to play important
parts in this niche market but the current market share of local food is small. A growing local
food market can helplocal communities achieve economic growth, better health & nutrition,
food safety, and environmental goals.
Outlook Conference of Rice
Production: According to a KREI survey conducted during December 23-27, 2011, Korean rice
farmers 2012 planting intention was 847,000 HA, down 7,000 HA or 0.8 % from the previous
year. This reduction is far lower than the 2.2 % annual average reduction in planted area for
the past five years. Higher market prices after the 2011 rice harvest have encouraged rice
farmers to continue rice cultivation in their paddy field. The completion of four river projects
has also allowed more rice farmers to resume rice cultivation. Rice farmers who participated in
the government rice reduction program in 2011 plan to return to rice from other crops such as
soybeans and radish etc because they had experienced difficulties not only from lower income
due to declining prices of these other crops but also in finding a way to sell them.
In the mid-longer term, KREI expects rice area to continue declining to 804,000 HA in 2018
and 758,000 HA in 2023.
Government rice purchase under the Public Rice Stockholding Program (PRSP) reached
261,000 MT (milled basis), or 76.8 percent of the purchasing plan for the 2011 crop, because
rice farmers preferred to market their rice rather than sell to the government whose initial
payment was lower than the market price during the harvest season (Oct-Dec).
Trend and Outlook for Fruit Supply and Demand
Local fruit production for 2012 is forecast to decrease slightly compared to the previous years.
With the implementation of the KORUS FTA and a smooth progress on the phytosanitary
negotiations, imports of U.S. origin fruit are expected as follows: For apples, it may start to
enter the Korean market after September 2012 with the completion of the phytosanitary
negotiations. The import volume may not significant at the beginning within the maximum
level of safeguard applied 9,000 metric tons. U.S. pears are forecast to be not competitive in
the Korean market as the major US pear varieties are not attractive to Korean consumers.
Even Asian pears produced in the United States are not quite same as Korean pears in terms
of quality. Thus the impact of U.S. pear import is expected to be minimal. For oranges, the
import of U.S. oranges in 2012 is expected to increase by 20,000 MT, 13 percent up from the
previous season with the benefit of reduced seasonal tariff. For table grapes, a considerable
increase in import like Chilean grapes is not expected due to the limit in available import
volume of table grapes produced in the United States. Instead, imports of U.S. processed
grape products such as wine and raisins are expected to increase. With the immediate
removal of tariff, import of cherries is expected to increase noticeably. Under the
aforementioned forecast on the impact of the KORUS FTA, Korea may face over supply of fruit
in the domestic market in 2012.
Dried Capsicum for red pepper powder: Estimated amount for supply of dried capsicum in 2011
is at 195,000 metric tons, under the production decline and import increase. Due to local
production decline, price has been rapidly increased which resulted in 3% decrease of per
capita consumption to 3.3kg in 2011. The total import of dried capsicum increased to 100,500
metric tons, reaching at the highest number, three times bigger than that of 2000. Most of the
imported dried capsicum is imported from China. The retail price for imported Chinese dried
capsicum was KRW 6,650 (about $6) which is 55~60% of domestic capsicum. Per capita
consumption of dried capsicum decreased by annual average 2% to 3.5kg in 2010 from 4.3kg
Garlic: The reduction is due to the increase of production cost, expand of aging society
resulting reduces of cultivating area, and decline of Kimchi consumption. Per capita
consumption for 2011 is estimated at 7.7kg with increase of 3% compared to last year. China
is the biggest supplier of garlic importer. Annual import amount was increased by annual
average 8% to 89,000 metric tons in 2010 from 52,000 metric tons from 2003. Total imported
garlic amount for 2011 is estimated at less than 80,000 metric tons, due to the price reduction
of domestic products by 30% drop down.
Onion: The augment is due to an increase of western style dietary life and an expansion of
perception regarding onions as healthy well-being food. Per capita consumption for 2011 is
estimated at 31.4kg which is increased by 21% compared to annual average (26kg), 6%
compared to last year (29.7kg.) According to survey, 7% of Korean consumers are willing to
purchase imported onions from China if the price is set as 75% of domestic products;
moreover, 50%of price for 19% consumers; 30% of price, 8% consumers. Increasing the
domestic production brought decrease of imported amount down to 49,000 metric tons in
2010. Starting from 2006, the Chinese imported onions price was kept at 90% of domestic
products price or even higher.
Green Onion: Import of green onions is divided into three categories: fresh, frozen, and dried.
Converting all the types of green onions into fresh onions brings 5 to 60,000 metric tons of
total imports since 2000. Imported amount in 2011 was increased by 23% compared to last
year at 73,000 metric tons. The number takes 15% of domestic supply. Import of fresh green
onions hardly processed, unless excessive price increase in domestic products. Dried green
onions were imported 1,848 metric tons in 2011. Frozen green onions were imported 5,100
metric tons in 2000, however, after China joining WTO, in 2002 the number has been started
to increase by annual average 7% to 30,000 metric tons in 2010. In 2011, 29,700 metric tons
were imported. Per capita consumption for 2011 is estimated at 9.7kg increased by 32%
compared to last year, due to the price augmentation.
Vegetable Price Instability and Countermeasures
The main reason for the price instability of Napa cabbages, chilies, and garlic are due to
weather. For cabbage, if there is a price decline during the previous season, cabbage farmers
tend to speculate that the prices will go up the following year which causes the cultivated area
for the following year to expand. However, garlic and chilies producers tend to increase their
planted area in the following year if the prices are high during the previous year. However,
for garlic and chilies, the overall production area will continue to drop despite high prices
during the previous year, due to shortage in manpower and aging of the garlic and chilies
farmers. In order to stabilize vegetable prices, systematization of contract cultivation is
needed among producer organizations. Moreover, storage systems need to be standardized
and systematized to deal with short-term market failures.
Trend and Outlook for Livestock Supply and Demand
Cattle and beef
Due to the low calf prices and lower semen sales, cattle inventory is projected to drop in 2012.
This may fall even further to 2,790,000 heads if the government program to reduce the cow
inventory by 100,000 heads in 2012 is effective. High inventory and increased slaughter
number will increase beef production by 18 percent in 2012.
Beef consumption continues to increase as consumers take advantage of the domestic beef
sale promotion activities. Also the percentage of consumers that had purchased U.S. beef in
2011 was 48.0 percent, over twice the 2010 level of 22.1 percent.
The projected appreciation of the won currency and the implementation of the KORUS FTA,
etc., will lower the import prices for U.S. beef by 0.9 percent. However, as the import price of
Australian beef is projected to go up and due to higher domestic beef production, the overall
beef imports is projected to drop in 2012.
Unit CY CY CY 2017 CY 2022
Inventory 000 2,950 2,890 2,530~2,580 2,490~2,500
Production (Boneless 1,000 216 255 253 249
Import (Quarantine 1,000 289 272 309 336
Per Capita Consumption Kilogram 10.7 11.1 12.1 12.7
Hanwoo carcass price Won / Kg 12,782 12,069 12,739 13,612
Source: Korea Rural Economic Research Institute (KREI)
Swine and pork
As sow numbers rapidly increased in 2011, after the FMD outbreak in late 2010, the total
swine inventory is recovering. The total inventory is projected to exceed 9 million head by
September 2012. However, annual average inventory is projected at 8.84 million heads.
Higher swine inventory will allow for pork production to increase by 19.3 percent over the 2011
As domestic pork production recovers from the FMD crisis, domestic pork prices will drop in
2012, allowing for increased consumption of domestic pork. According to a survey by KREI,
24 percent of consumers preferred chicken as an alternative for domestic pork whereas 22
percent chose fish and 17 percent chose domestic Hanwoo beef, spurred by Hanwoo beef
As more domestic pork becomes available, pork imports are projected to drop in 2012. Given
that 2011 was an abnormal case where Korea had imported massive amounts of pork in 2011
to cope with the shortage in domestic pork production, it is inevitable that pork imports will
drop in 2012.
Unit Forecast CY 2011 CY 2012 CY 2017 CY 2022
Inventory 000 heads 8,171 8,840 9,750 9,990
Production (Boneless basis) 1,000 tons 575.8 687.1 771.3 800.1
Import (Quarantine basis) 1,000 tons 370.4 256.3 289.1 321.0
Per Capita Consumption Kilogram 19.2 19.3 21.4 22.7
Hanwoo carcass price Won / Kg 5,808 4,669 4,495 4,652
Source: Korea Rural Economic Research Institute (KREI)
Due to the increased number of parental stock (PS) throughout the 2011, the average annual
inventory in 2012 is forecast at 87.2 million birds, up 3.5 percent from 2011. Therefore, broiler
meat production is forecast at 473,000 tons (boneless basis) in 2012, up 3.9% from the
production (455,200 tons) in 2011.
Broiler meat demand in the first half of 2012 is expected to decrease slightly due to the
diminished substitute demand for pork with recovery of domestic pork production from the
FMD outbreak in 2011. However, still the broiler meat consumption is expected to increase
gradually along with the trend of increasing meat consumption.
With the expected increase of broiler inventory during the first half of 2012, broiler meat
imports are expected to decrease by 11.9 percent at 96,000 tons. However, frozen U.S.
broiler meat is forecast to increase its market share due to price competitiveness and the
lower tariffs expected with implementation of KORUS FTA in 2012.
Unit CY 2011 CY 2012 CY 2017 CY 2022
Annual Average Inventory Million bird 84.2 87.2 93.6 96.8
Production (Boneless basis) 1,000 tons 455 473 511 530
Import (Quarantine basis) 1,000 tons 109 96 105 113
Per Capita Consumption
(Bo Kilogram 11.2 11.3 12.3 neless basis)
Farm Price Won / Kg 1,857 1,729 2,037 2,283
Source: 2011 Forecast by the Korea Rural Economic Research Institute (KREI)
The Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) provided a summary of
the various livestock policies that it was planning for 2012.
Beef cattle and beef: MIFAFF will continue to encourage discount sale of Hanwoo beef
through agricultural cooperatives and also replace pork and imported beef for military use with
domestic Hanwoo and Holstein. In order to promote the less popular Holstein beef, MIFAFF
will foster restaurants and processed beef products specializing in such meat. It will also run a
trial of slaughtering 1,000 head of Holstein steer calves and try to develop a veal market. It
will also budget a total of 30 billion won in 2012 to help reduce the lower quality Hanwoo
cows. MIFAFF hopes that it will be able to reduce up to 200,000 head of Hanwoo cows by the
end of 2013.
Swine and Pork: MIFAFF will provide a TRQ of 70,000 MT for pork imports in 2012 (50,000
MT for pork bellies and 20,000 MT for processing). It will also provide a TRQ for 5,000 heads
of sow imports.
Dairy and chicken: MIFAFF will allocate a TRQ of 40,000 MT for 8 dairy products during the
first half of 2012. As for chicken, it will try to stabilize the price by having the major packers
release their stocks during the high consumption period and continue to increase exports of
ginseng chicken soup.
Improvement of livestock products’ marketing structure:
Develop the Ahnshim livestock company owned by the National Agricultural
Cooperative Federation into a packer like the Danish Crown.
Improve the performance of the slaughter plants by reducing the current 83
slaughter houses into 36 by 2015.
Make it mandatory to market meat products in packages by 2015 by increasing
the percentage of boxed meat being auctioned in wholesale markets.
Increase the sale of meat products through internet to reduce marketing costs.
Increase the number of butcher shop style restaurants.
Introduction of licensing for livestock business: MIFAFF will gradually introduce the
licensing system for the livestock farmers, beginning with company-owned farms in 2013 and
gradually enlarging it to small farms by 2016.
Establish a constant quarantine system against livestock diseases: MIFAFF will
introduce a system where there is constant monitoring of livestock diseases, such as FMD and
Stabilization of compound feed prices: MIFAFF will extend by one year the repayment
period for loans to the livestock farmers to purchase compound feed and will also expand the
acreage for producing roughage to 330,000 hectares by 2012. It will also provide TRQ for 21
feed products and extend the VAT (value added tax) exemption for compound feed up to
Dairy industry: MIFAFF will announce a plan for developing the dairy industry in February. It
will also provide support for modernization of the facilities, R&D, etc., to improve the dairy
Livestock Manure treatment: MIFAFF will continue to monitor and provide consulting to
farmers so that they can cope with the ban that went into effect as of January 1, 2012, on
disposing livestock manure in open sea.
R&D for livestock industry: MIFAFF has established an organization called the “Future
Livestock Forum” to coordinate research that is currently scattered among various research
Fostering of the equine industry: MIFAFF will provide support for developing the equine
industry into a leisure business. It will also support the establishment of 100 farms raising
Increased export of veterinary drugs: Korea is currently exporting about $100 million worth
of veterinary drugs to 82 countries. MIFAFF will provide support for marketing efforts in the
Scenario for climate change and its use in agriculture
Won Tae Kwon, Director General of National Center for Intensive Observation of Severe
Weather (NIMR) noted that in the last 100 years, Earth's average surface temperature
increased by 0.74°C and the sea level rose by 17 cm. On the other hand, Snow cover has
decreased in the Northern hemisphere at 2.7% per decade. On top of that, these changes are
becoming even more severe and frequent over time.
Korea's Climate Change
Over the last 90 years, Korea‟s average temperature rose by 1.8°C and annual average
rainfall rose by 200 mm. Temperature rise is extreme in winter and spring and relatively low in
summer. As a result of global warming, summer in Korea is definitely getting longer and hotter
and winter is short-lived. The growth season for spring flowers has been extended and fall
foliage season is cut short, causing leaves to change colors and drop faster than in the past.
Likewise, seawater temperature around the Korean peninsula has risen by 1°C. Climate
change will also have an effect on cultivation land for apples and garlic, habitat loss for
migrating birds in Korea and changes in the marine ecosystem. The number of days when
Han River is frozen no longer exceeds 20 days per year.
The representative concentration pathway (RCP) was used to make climate predictions for
both the world and for Korea under two scenarios: RCP 8.5 referring to “no action”, and high
concentration with continuous greenhouse gas emission and RCP 4.5 referring to a stable low
concentration scenario where there are some efforts to reduce greenhouse gas. Impacts for
the whole world and Korea differ according to different RCPs as shown below.
Future climate predictions (2070-2099)
RCP 4.5 RCP 8.5
Temperature + 2.8°C +4.8°C
Precipitation +4.5% +6.0%
Water elevation 72.7cm 90.0cm
RCP 4.5 RCP 8.5
Temperature +3.4°C +6.0°C
Precipitation +17.3% +20.4%
Heat wave +23.8 days +57.4 days
Tropical night +30.9 days +59.1 days
Below 0°C -28.4 days -53.1 days
Heavy rain +4.24 days +4.39 days
Natural disasters and food security
Korea‟s annual average property damage from natural disasters is approximately 2.3 trillion
won, more than a 3-fold increase since 1980 (700 billion won). Restoration of the domestic
agricultural industry cost 670.5 billion won per year over the past 10 years. Typhoon-induced
repair costs accounted for 39%, heavy snow 29%, and heavy rain 28%.
The total area of farmland decreased by 16,017 hectares per year for the past 30 years and
the area of rice paddies has diminished every year since it peaked at 1,357,857 hectares in
Recent global phenomenon such as global warming, severe drought and heavy rainfall have
caused unstable agricultural production. Diseases and insect pest problems make it more
difficult to predict crop production. The occurrence of Rice stripe virus (RSV) has been
confirmed in some parts of South Korea.
Studies show the potential impact of climate change on Korean rice and barley yields:
Average yield per hectare of rice
Average yield per hectare of rice (kg/ha)
1971~2000 2011~2040 2041~2070 2071~2100
Scenario 1: Temperature change,
CO 11,809 9,797 8,422 7,669 2 stable
Scenario 2: Temperature stable,
CO 11,809 13,314 14,570 15,429 2 change
T 11,809 11,044 10,395 10,020 emperature change, CO2 change
Ideal temperature for growing rice in Korea is around 22°C. Rice is extremely vulnerable to
rapidly changing temperature so the yields will decrease in scenario 1 and 3.
Average yield per hectare of barley
Average yield per hectare of barley(kg/ha)
1971~2000 2011~2040 2041~2070 2071~2100
Scenario 1: Unhulled
T 6,876 6,949 6,430 5,501 emperature change, barley
CO2 stable Rye 6,101 5,572 5,061 4,002
Scenario 2: Unhulled
T 6,876 7,707 8,828 9,839 emperature stable, barley
CO2 change Rye 6,101 6,476 7,346 8,011
Scenario 3: Unhulled 6,876 7,795 8,351 8,205
Temperature change, barley
CO2 change Rye 6,101 6,612 7,044 6,883
Barley is commonly grown in high temperatures. Barley, which is cultivated in the central area
of the south, would be cultivable in the north as the weather gets warmer. Scenario 3 is the
most ideal because CO2 is able to stimulate photosynthesis at night.
Reducing climate change impacts on agriculture
Three factors cause climate change: rise in temperature due to higher concentration of
greenhouse gases, change in global-scale heat and hydrological balance, and lastly, El Niño/
la Niña. Climate change can have both positive and negative impacts on the agricultural
sector. Firstly, climate change can help by lengthening the period of growing crops, enabling
introduction of new varieties, and saving heating costs for certain crops grown in facilities. At
the same time, climate change decreases volume and quality of crops due to high
temperatures, makes weeds and pests flourish, and worsens soil fertility. Also, climate change
can change distribution of crops that are primarily grown in certain regions, posing either crisis
Weather phenomena caused by global warming is making global price of crops become
volatile and the problem of food security to loom large. During the global food crisis of 2008,
for example, soybean prices reached 553 USD/t and wheat prices 403 USD/t. In Korea, the
situation worsened in the summer with heat waves and heavy rains affecting the price
fluctuation and destabilization of premium cabbages. Price of the cabbage was KRW 6,800
per 10kg in August, 2010, but doubled in price in September.
The Korean agricultural sector is responsible for 3% of total national emissions – 54.1% is
used in agri-production and 45.9% in livestock. Methane (CH4) emissions from flooded rice
cultivation are 57.1% of all gas emissions. Emissions are also produced through intestinal
fermentation of ruminant livestock and decomposition of animal waste. 42.9% of Nitrous oxide
(N2O) is emitted when trying out nitrogenous fertilizer and decomposing animal waste.
Korea ratified the United Nations Framework Convention on Climate Change in December
1993 and the Kyoto Protocol in November 2002. Auto-control greenhouse and geothermal
heat pump installation is now booming in Korea. Furthermore, transformation of livestock
manure into resources has accomplished energy reduction and expansion of renewable
The two main objectives to counter climate change are: Green House Gas (GHG) reduction by
35% of total projected emissions in 2020 and agricultural adaptation to climatic variation
through Farming Future initiative. The government is to provide modern agricultural subsidy
programs, develop alternative technology suitable for local specialties, and improve seeding