April 15, 2011

South Korea will help farmers cope with EU FTA

South Korea plans to invest more money to help local farmers cope with the possible fallout from a free trade pact with the EU, the government said Thursday (Apr 14).

The Ministry for Food, Agriculture, Forestry and Fisheries said it will set aside an extra KRW2 trillion (US$1.8 billion) in the next 10 years aimed at helping farmers deal with the influx of meat and dairy products from Europe.

The plan comes as Seoul is calling on lawmakers to swiftly ratify the free trade agreement (FTA) signed in October, which calls for lowering tariffs across the board and opening the local market to EU farms' products.

The EU parliament has already approved the landmark deal that could boost two-way trade by 20% in the long term. The FTA could go into effect as early as July 1 if South Korea's parliament ratifies the pact.

The extra money will augment the KRW8.9 trillion (US$0.0082) in funds already set aside by Seoul to help farmers.

Of the extra money, the ministry said KRW780 billion (US$0.72) will be spent on revamping the local distribution sector, with KRW630 billion (US$0.58) used to help improve productivity of locally raised livestock. 

Other areas to receive money include support to improve market sanitation and measures to assist farmers in overcoming short-term liquidity problems.

Government policymakers and private sector experts have said extensive support is needed because the FTA could cause South Korea's farm production to decline by an average of KRW187 billion (US$0.17) every year in the next decade, with local pig and dairy producers expected to be hit hardest.