Preparation of Mid- to Long-Term Development Plans for the Dairy Industry at Year-End, Including Crude Oil Production Cost Linkage System

Operation of the Dairy Industry Development Committee... Discussion Accelerates

[Sejong=Asia Economy Reporter Moon Chaeseok] The government plans to establish a 'Mid- to Long-term Development Plan for the Dairy Industry' by the end of the year to strengthen the competitiveness of domestic raw milk.

The Ministry of Agriculture, Food and Rural Affairs announced on the 22nd that it will form a 'Dairy Industry Development Committee' and hold its first meeting on the 25th. Although the Dairy Promotion Association had operated subcommittees for producers, consumers, experts, and consumers for a year, it was judged that there had been no discussions on system improvements.

The committee will include government officials, academia, consumers, producers, demand-side representatives, and related organizations. An expert advisory group and a practical task force for system improvement led by Director Park Beom-su of the Livestock Policy Bureau will also be operated together. Expert research projects will be conducted to prepare the final plan by the end of the year.

The plan to be prepared by the end of the year will include measures for the sustainable development of the dairy industry and income stabilization for dairy farmers, such as ▲ reforming the price determination and transaction system including a production cost linkage system ▲ reducing production costs ▲ supporting research and development (R&D) and government budget funding.

According to the Ministry of Agriculture, Food and Rural Affairs, dairy product consumption last year was 4.47 million tons, a 46.7% increase from 3.046 million tons in 2001. During the same period, dairy product imports surged 273% from 653,000 tons to 2.434 million tons. Meanwhile, production decreased by 10.7%, from 2,339 tons to 2,089 tons. The self-sufficiency rate also dropped significantly by 29.2 percentage points, from 77.3% to 48.1%.

Director Park diagnosed, "The raw milk price structure continues to rise regardless of consumption patterns or demand decreases," adding, "From the perspective of dairy farmers, even if they produce raw milk at a cheaper price that consumers want, there is no incentive to receive greater compensation due to an unreasonable price determination system."

He continued, "In a situation where dairy product consumption and imports are increasing, for the long-term development of our dairy industry, it is necessary to reform the price determination system along with stabilizing dairy farmers' income, improving productivity in the dairy industry, and reducing production costs," and added, "We will prepare fundamental measures for this by the end of the year."

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