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Farming Regulations in Europe (Netherland) Vs Korean:: European Union
Farming Regulations in Europe (Netherland) Vs Korean:: European Union
European union:
Support for agriculture:
Support to agriculture in the European Union has declined gradually since the 1990s.
Support to producers as a share of gross farm receipts (%PSE) has stabilized at around 19%
since 2010. Although support in the form of price distortions has been reduced substantially,
trade protection measures (including import and export licensing, Tariff Rate Quotas (TRQs)
and special safeguards) remain in effect for a number of sectors. Overall levels of market
price support declined in 2019, as the gap between domestic and world prices narrowed for
some of the most protected products. Production distortions from payments have also
declined since the early 2000s and most payments today do not require production.
Payments not requiring production accounted for 41% of support on average in 2017-19. At
the same time, more payments are contingent upon environmental compliance – more than
60% of payments to producers are conditional on mandatory environmental constraints, and
an additional 14% of payments to producers come from voluntary agri-environmental
schemes with conditions that go beyond the mandatory requirements. The greatest share of
overall support to the agricultural sector (TSE) goes to producers (89% in 2017-19). Public
expenditure for general services to the sector at large (GSSE) relative to total support was
10% in 2017-19, similar to the 9% in 2000-02. However, the composition of GSSE has
evolved. Agricultural knowledge and innovation accounts for 56% of the GSSE, up from 42%
in 2000-02. Expenditures for both infrastructure and public stockholding have declined over
the period, falling respectively from 27% and 15% in 2000- 02 to 15% and 1% in 2017-19.
Special attention must be devoted to the continuity of businesses and the opportunities for
young people to take over a business. The shift to circular agriculture requires, more than
ever, a long-term perspective. Young entrepreneurs who are innovative and who will play a
key role in realizing the circular aspect should receive a reliable income, with sufficient space
in their business operations to be able to invest in new processes. Entrepreneurs must be
able to organize themselves more easily in existing or new partnerships or to join forces with
market players who work with suitable contracts and private-law agreements.
Korea:
Support for agriculture:
Korea’s level of support to agricultural producers gradually decreased during the last two
decades due to continued efforts towards market-oriented reforms, but in spite of these
reductions, support levels remain well above the OECD average and potentially most
distorting forms of support predominate. Producer support as a share of gross farm receipts
(%PSE) decreased from 60.9% in 2000-02 to 47.9% in 2017-19, compared to an OECD
average of 17.6% In the context of reforms, a range of direct payment programs and an
agricultural insurance scheme were introduced in the late 1990s and in 2005, respectively.
Since the rice tariffication in 2015, all import restrictions on agricultural products have been
applied in the form of tariffs and tariff rate quotas (TRQs). Market Price Support (MPS) is the
dominant component of the PSE, accounting for 89% of PSE over the period 2017-19,
maintained mainly through tariff rate quotas with high out-of-quota tariffs. Budgetary
payments to general services directed at the sector as a whole (GSSE) averaged 14% of total
support to the agricultural sector (TSE) in 2017-19. The main elements are expenditure on
infrastructure, representing 62% of the GSSE, while government funding for the agricultural
knowledge and innovation system accounts for 18%.
Contextual information
Korea achieved the fastest growing per capita income among OECD member countries over
the past 25 years (OECD, 2018[2]). The level of GDP per capita increased by 27% during
2000-18. The economic growth was significantly led by a strong trade focus: in 2018, trade
accounted for 33% of GDP, more than twice the average of all countries covered in this
report. The weight of agriculture within the economy is relatively small, accounting for 2% of
GDP and 5% of employment in 2018. Agro-food products accounted for just over 1% of all
exports in the same year. Arable land per capita was 0.03 hectare in 2018, one of the
smallest among OECD countries. Over the past two decades, the Korean agricultural sector
continued to diversify towards livestock, due to a rapid change of dietary patterns. Crops
represented 61% of the total value of agricultural production in 2018, down from three-
quarters in 2000. Rice still dominates crop production, even though its share in total crop
production has declined. Output growth slowed down in recent years, while there was a
slight economic upturn in 2017 led by business investment and a continuing boom in
construction (OECD, 2018[3]). Inflation rates have declined to levels below 2% since 2013
and reached the lowest level in 2019 at 0.38%. Korea is a net importer of agro-food
products, and one of the largest importers in the world. Agro-food exports slightly grew in
2018 but the agro-food trade deficit worsened. Key imported agricultural commodities are
maize, soybeans, and potatoes, and key exported commodities are red ginseng,
strawberries, grapes, and pears. Over 85% of agro-food exports are products for final
consumption, notably processed food products and fruit, and less than half of imports are
for further processing by Korean industry. Both agricultural output growth and total factor
productivity (TFP) are below the global averages. TFP growth made up for the declining use
of primary factors, resulting in output growth of less than 0.1%. TFP growth averaged 1.2%
per year over the period 2007-16, slowed down compared to the period 1991-2000.
Although pressure from agriculture on the environment has declined over the last decade,
nutrient surpluses for nitrogen and phosphorus are still well above the OECD averages,
resulting from high fertilizer use and intensive livestock production linked to land scarcity.
Agriculture accounts for more than half of the country’s water use, due to the high portion
of rice paddy fields. The sector’s shares in energy use and GHG emissions have decreased
since the 1990s.
Sources:
1) https://www.government.nl/topics/agriculture/agriculture-and-horticulture
2) http://www.compareyourcountry.org/green-growth-indicators/en/3/all/default
3) https://www.thebalancesmb.com
4) https://aerofarms.com/technology/