KOREA: ESTIMATES OF SUPPORT TO AGRICULTURE

Contact person: Yoon-Jong Kim

Email: yoon-jong.kim@oecd.org

Tel :

(33-1) 45 24 95 27

Fax :

(33-1) 45 24 18 90

DEFINITIONS AND SOURCES

Country Total Support Estimate (TSE) and derived indicators in Table 1 cover all agricultural production, i.e. all agricultural commodities produced in the country. Definitions of basic data sets refer to the specific name of the programmes. For the Producer Support Estimates (PSE) and Consumer Support Estimates (CSE), the description of policy measures indicates the commodities covered by the measures, as well as the method of allocation of the corresponding transfers among commodities. "MPS commodities", which vary across countries, are those for which market price support is explicitly calculated in Table 2.

Market Price Support (MPS) and Consumer Support Estimates (CSE) by commodity in Table 2 are calculated for the following set of commodities: barley, rice, soybeans, milk, beef and veal, pigmeat, poultrymeat, eggs, red pepper, garlic, and Chinese cabbage. Definitions are provided only for basic data sets from which all the other data sets in this table are derived, following the formula indicated in each commodity table. Specific sources are indicated in square brackets.

Producer Support Estimates (PSE) by commodity in Table 3 are calculated only for commodities produced in the country within a common set of commodities (wheat, maize, barley, oats, rice, sorghum, soybeans, sunflower, rapeseed, sugar, milk, beef and veal, pigmeat, poultrymeat, sheepmeat, wool and eggs), provided that the value of production of that commodity exceeds 1 per cent of the total value of production in the country concerned. All data sets in the calculation of PSE by commodity come from Tables 1 and 2 where definitions are included.

Definitions of the indicators, criteria of classification of programmes included, and methods of calculation can be seen in OECD, Methodology for the measurement of support and use in policy evaluation [http://www.oecd.org/agr/policy].

All data are in calendar years except crop consumption which is in marketing year (rice year) 1 November/30 October, beginning in November of the previous year. For example, crop consumption from November 1999 to October 2000 is associated with data for the 2000 calendar year. In the case of crop production, calendar year 2000 corresponds to the November 2000 harvest.

List of acronyms:

LIDF: Livestock Industry Development Fund.

LPMO: Livestock Products Marketing Organisation (ceased in 2001).

MAF: Ministry of Agriculture and Forestry.

NACF: National Agricultural Co-operatives Federation.

NLCF: National Livestock Co-operatives Federation (merged into NACF in 2000).

RDA: Rural Development Administration.

RPC: Rice Processing Complexes.

Table 2. Market Price Support and Consumer Support Estimate by Commodity

Definitions:

I. Level of production

Barley: Total production of unhulled barley, naked barley and malting barley in unhulled barley equivalent [1]

Rice [paddy]: Rice production in husked rice equivalent [1].

Soybeans: Total production [1].

Milk: Domestic production of raw milk [2].

Beef and veal, and pigmeat: Domestic production in carcass weight equivalent [2].

Poultrymeat: Domestic production of chickenmeat in carcass weight equivalent [2].

Eggs: Domestic production of eggs in shell, converted in tonnes using the coefficient 1 egg = 55 grams [2].

Garlic, red pepper, and Chinese cabbage: Total production [1].

II. Producer price

Barley: Weighted average of government purchase prices (unhulled and naked barley), government administered price (malting barley) and voluntarily marketed farm gate price of barley [3].

Rice and soybeans: Weighted average of government purchase prices [3] and voluntarily marketed farm gate price [4].

Milk: Producer price of raw milk at farm gate [2].

Beef and veal: Average auction price of beef in three wholesale markets in Seoul, in carcass weight equivalent [2] adjusted for by-product value, and slaughtering and transportation costs (around 3 per cent) to convert it to a farm gate price [5].

Pigmeat: Average auction price of pigmeat in three wholesale markets in Seoul, in carcass weight equivalent [2] adjusted for by-product value, and slaughtering and transportation costs (5-8 per cent) to convert it to a farm gate price [5].

Poultrymeat: Delivery price of chickenmeat to wholesale markets in carcass weight equivalent [2] adjusted for slaughtering and transportation costs (15-20 per cent) to convert it to a farm gate price [5].

Eggs: Price of large size eggs received by farmers [2].

Garlic, red pepper, Chinese cabbage: Value of production divided by level of production [1].

IV. Level of consumption

Barley: Total domestic consumption of barley for food, feed and malting use [6].

Rice: Total consumption in husked rice equivalent [6].

Soybeans: Total consumption of soybeans [6].

Milk: Total domestic consumption of cow milk in raw milk equivalent [6].

Beef and veal, and pigmeat: Total domestic consumption in carcass weight equivalent [6].

Poultrymeat: Total domestic consumption of chickenmeat in carcass weight equivalent [6].

Eggs: Total domestic consumption of eggs [6].

Garlic, red pepper, and Chinese cabbage: Total domestic consumption of garlic, red pepper and Chinese cabbage [6].

VII. Reference prices

Barley: Weighted average of import reference prices for unhulled barley and malting barley. For unhulled barley, from 1979 to 1994, the US export price of second grade barley, f.o.b., (annual average price of Portland cash grain price) plus transportation costs (9.48 per cent) [7] and from 1995, the Korean average import price of ordinary barley in unhulled equivalent, c.i.f. [8]. For malting barley, from 1979 to 1988, the average Japanese price of malting barley imported from Australia (9) and from 1989, the Korean average import price of malting barley in unhulled equivalent, c.i.f. [8].

Rice: Chinese export price of rice, f.o.b., plus transportation costs (3 per cent) [10] and from 2001, average import prices (c.i.f.) of rice from China, the U.S. and Thailand. [3]

Soybeans: Korean average import price, c.i.f. [8].

Milk: Border prices of butter and SMP (skimmed milk powder) converted into a milk equivalent border price using technical coefficients minus a processing margin, calendar year. The border prices of butter and skimmed milk powder are the average import prices (c.i.f. prices) of butter and skimmed milk powder [18]. The processing margin is calculated as a simple average of the processing margins for the four main exporting countries: Australia, EU, New Zealand and the United States.

Beef and veal: From 1986 to 1988, US choice steers, Nebraska, 1100-1300 lb. [13] plus transportation costs from the US to Korea [13].

Since 1989, unit value of imported beef from Canada and the US, in carcass weight equivalent. [14].

Pigmeat: US No.2 grade wholesale price plus transportation and insurance costs [15].

Poultrymeat: US producer price, adjusted for EEP [16] plus 20 per cent transportation costs.

Eggs: Wholesale price of eggs in Japan minus tariffs [15].

Garlic: Since 1993, unit import value [17]. From 1986 to 1992, domestic producer price multiplied by price gap (3.50 times) calculated by comparison of 1993-99 domestic producer price and unit import value.

Red pepper: Since 1993, unit import value [17]. From 1986 to 1992, domestic producer price multiplied by price gap (3.75 times) calculated by comparison of 1993-99 domestic producer price and unit import value.

Chinese cabbage: Domestic producer price minus tariffs (1994: 30%, 2002: 27.6%) [12]

Sources:

[1] MAF, Crop Statistics, various years, Seoul.

[2] NLCF, Materials on Price, Demand and Supply of Livestock Products, various years, Seoul.

[3] MAF, Foodgrain Policy Division, Seoul.

[4] NACF, Monthly Review, Seoul.

[5] MAF estimates.

[6] MAF, Food Grain Policy Division, Statistics on Demand and Supply of Food Grains, various years.

[7] USDA, FAS database.

[8] Korean Customs Services [KCS], Statistical Yearbook on Foreign Trade, various years, Seoul.

[9] MAFF Japan, Japanese exports and imports published by the Japanese Tariff Association.

[10] FAO Trade Yearbook, various years, Chinese Trade Yearbook, 1996.

[11] Information provided directly by the New Zealand Ministry of Agriculture and Fisheries.

[12] MAF, Seoul.

[13] USDA, Agricultural Outlook [AGLINK database].

[14] MAF, Seoul.

[15] OECD PSE/CSE Tables for Japan [Originally from USDA, Agricultural Outlook].

[16] OECD PSE/CSE Tables for the United States.

[17] MAF, Trade Statistics (Ministry of Finance and Economy), various years, Korea

[18] FAO Statistical Databases.