September 3, 2008

A new company would be set up to help increase income for local farmers facing the threat of cheap imports, according to the National Agricultural Cooperative Federation (Nonghyup).
 

Chairman Choi Won-byung said the company would be set up in 2009-2010 so as to benefit both farmers and consumers.

The company will provide a direct link between producers and consumers, which can help increase sales price while making it more affordable to buyers by removing the middlemen in the distribution chain, Choi said, adding that beef made up a large part of earnings for farmers.

Domestic beef cattle raised in South Korea reached 2.27 million head in June, up from 1.84 million head in 2006, but input costs are rising steadily as sales prices decline. Prices and sales have also been affected by the return of the cheaper US beef.

As Nonghyup would be able to control both production and distribution, this arrangement can help to reduce fluctuations in prices that can contribute to inflation.

Nonghyup also said it plans to invest US$135 million to build the country's largest agriculture logistics centre near Seoul next year, and the facility is expected to have cold storage and packaging infrastructure on a building area of 132,000-165,000 square metres.

Nonghyup would also be establishing a similar company for South Korean rice farmers.