Korean Journal of Organic Agriculture (한국유기농업학회지)

Korean Association of Organic Agriculture (한국유기농업학회)
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An Analysis on the Damage Compensation of Hanwoo Farmers as a Result of the Korea-U. S. Free Trade Agreement

한.미 FTA 체결에 따른 한우농가 피해보전효과 분석

  • 최세현 (부산대학교 농업경제학과) ;
  • 조재환 (부산대학교 농업경제학과) ;
  • 김은순 (충남대학교 농업경제학과)
  • Received : 2013.10.06
  • Accepted : 2013.11.03
  • Published : 2013.12.31
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Abstract

To help improve the current government practice of direct damage-compensation policies, resulting from the loss of profit, sustained by Hanwoo farmers, as a result of the recent Korea-U. S. Free Trade Agreement (FTA), this research aims to examine any problems or issues caused by said policies. To accomplish this task, we have established Hanwoo-SIMO model and estimated the damage of Hanwoo farmers, one without the implementation of the FTA and another with the FTA, to compare and contrast the two. We then analyzed the efficacy of the current government policies. According to our analysis, the current direct compensation policies for the loss of profit on the part of Hanwoo farmers are insufficient. To address this problem, we recommend the government enact a new direct damagecompensation law to address the following issues. First, as the base formula of damage-compensation, the government should use current price of the beef rather than the annually changing flexible price. Second, the flexible control index should remain fixed at 1.0 rate while the government prepares the adequate amount of the damage compensating direct payment resulting from the FTA. Third, the direct government compensation policy should extend beyond the current 15 years (2013-2026) as the profit loss is expected to increase after the midpoint of the FTA.

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References

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