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Korea has reduced its support to agriculture in recent years. However, support remains relatively high at 47% of farm income and the forms of support that most distort production and trade still represent 90% of the support.
On the other side, the level of price distortions has been reduced, as documented by the Nominal Protection Coefficients (NPC).
- Overall, some progress has been made towards more market oriented policies. The level of producer support, as measured by the PSE, dropped significantly in 2010 due to a sharp rise in world rice prices and decrease in domestic rice prices. Market price support accounts for a significant share of producer support, although in recent years the share of support from direct payment schemes has increased.
- The expansion of a traceability information system and the increase of direct payments for environmentally friendly agriculture are responses to increasing consumer interest in food safety and organic products. The recent policy focus on green growth could lead to more effective policy measures that respond to climate change.
- While progress has been made in reducing the level of support, future efforts need to focus on improving market access, and better target of support. Efforts have been made to integrate various direct payment systems so as to improve efficiency of delivery. Further efforts are needed to reduce the level of direct payments and to improve their targeting.
Korea: OECD Producer Support Estimates (PSE)
Level and composition by support categories, 1986-2010