Development of Agribusiness Enterprises - Asian Productivity ...

and to provide price support for agricultural products. Rural food-processing enterprises in
particular have a positive impact on unemployed labor in the rural areas by providing offfarm
income sources.
However, the liberalization of international markets, including those for agricultural
products, has weaken the relationship between rural food-processing enterprises and
agricultural production. This negative impact has created a need for developing rural foodprocessing
enterprises that provide price-competitive agricultural products, in order to
support farm income and stabilize prices of agricultural products. These are both reasons for
the government to support rural food-processing enterprises.
Between 1989 and 1998, the government provided subsidies totaling US$156 million
(W= 121,700 million) and loans totaling US$243 million (W= 189,800 million) to 1,395
enterprises. This development program is being extended to a total of 2,000 enterprises.
The present situation among government-supported rural food-processing enterprises
and the management problems associated with insolvent firms have been examined in this
paper. In addition, development programs have been examined, based on the current
business environment of the local food-processing industry.
Each stage of rural food-processing enterprises has been examined, including start-up,
production and marketing.
The establishment of local processing factories implies the stimulation of the local
economy. This requires local governments or related institutions to provide the appropriate
functions. Local governments should proceed with comprehensive plans in accordance with
local development, rather than following uniform and rigid central government plans. That
is, responsibility for supervising rural food-processing enterprises should be given to local
government. The central government should then focus on subsidizing other areas of general
business.
BIBLIOGRAPHY
Agricultural and Fishery Marketing Corporation, 1994. Report on the Imported
Agricultural/Marine Products and Processed Food Marketing, Seoul.
----------, 1996. “Report on the Business Status of Agricultural and Marine Products
Processing Enterprises”, Seoul (unpublished).
Bank of Korea, 1998. 1995 Input-Output Table, Seoul.
Choi, T. D. et al., 1994. Food Industry Statistics, Korea Food Research Institute.
Heo, K. H. et al., 1997. Report on Improving Marketing Strategies for Agricultural and
Marine Products for the 21 st Century – Marketing and Processing Sectors, C97-5-4,
Korea Rural Economic Institute.
Jang, J. K., 1997. “The Status and Policy Assignment for the Food Processing Industry”,
monthly seminar report, Forum for Agricultural and Rural Policy.
Jeong, Y. I. et al., 1998. The Status and Developing Course for Rural Food Processing
Industry, Forum for Agricultural and Rural Policy.
- 102 -