Evolution of Vertical Integration in the Korea Broiler Industry

한국육계산업의 수직통합(계열화) 전개상황

The broiler industry in Korea has been gradually changing its structure of independent operation into integrated and coordinated production and marketing system. It was in 1960s when the broiler industry first tried the integrated effort, but never succeeded as it was expected since due mainly to growers' attitudes favorable for traditional operation and agribusiness' passive response on structure change. Until mid 1980s, however, a bit of partially integrated system had been evolved by several factor suppliers. Recent years have furthered its progress toward completely integrated pattern, the ultimate goal of broiler integration. It is true that the external factors including the GATT Negotiations through the Uruguay Round stimulated the people involved in the industry to find the way of making it competitive to survive in the open, liberalized world economic system rapidly emerging through the process of globalization. Once the industry realized the necessity of reducing the cost of production and improving the quality of it, the conclusion tended to come to the point of an entire structural alteration by means of integration rather than an improvement of a certain segment such as marketing. It is very obvious. therefore. that the movement toward the complete integration will speed up in a coming few years under the leadership of not only entrepreneurs but also producers group. According to a report. there were three almost complete integrators and thirteen partial integrators as of December, 1990, all of which eagerly directed toward the completely integrated system in due course . Among others as an advantage of integrated structure. the cost saving must be pointed out as the greatest one In a survey, it was estimated that the cost of dressed and ready-to-eat chicken could be lowered by 31.8 percent and 41.5 percent, respectively, over that to be under the independent, non-integrated system. As long as everybody concerned about the future of the industry in the open market mechanism realizes the importance of the structure change through an integration, the broiler sector of Korean agriculture shall be moving toward the direction of vertically and completely integrated structure in order to make it competitive, even to export, hopefully before 1995 or by the end of this century in any case.