|South Korea Table of Contents
At the start of the economic boom in 1963, the majority of South Koreans were farmers. Sixty-three percent of the population lived in rural areas. In the next twenty-five years, South Korea grew from a predominantly rural, agricultural nation into an urban, newly industrialized country and the agricultural workforce shrunk to only 21 percent in 1989. Government officials expected that urbanization and industrialization would further reduce the number of agricultural workers to well under 20 percent by 2000.
South Korea's agriculture had many inherent problems. South Korea is a mountainous country with only 22 percent arable land and less rainfall than most other neighboring rice-growing countries. A major land reform in the late 1940s and early 1950s spread ownership of land to the rural peasantry. Individual holdings, however, were too small (averaging one hectare, which made cultivation inefficient and discouraged mechanization) or too spread out to provide families with much chance to produce a significant quantity of food. The enormous growth of urban areas led to a rapid decrease of available farmland, while at the same time population increases and bigger incomes meant that the demand for food greatly outstripped supply. The result of these developments was that by the late 1980s roughly half of South Korea's needs, mainly wheat and animal feed corn, was imported.
Compared with the industrial and service sectors, agriculture remained the most sluggish sector of the economy. In 1988 the contribution of agriculture to overall GDP was only about 10.8 percent, down from approximately 12.3 percent the previous year. Most economists agreed that the country's rural areas had gained more than they had contributed in the course of industrialization. Still, the growth of agricultural output, which averaged 3.4 percent per year between 1945 and 1974, 6.8 percent annually during the 1974-79 period, and 5.6 percent between 1980 and 1986, was credible. The gains were even more impressive because they added to a traditionally high level of productivity. On the other hand, the overall growth of the agriculture, forestry, and fishing sector was only 0.6 percent in 1987 as compared with the manufacturing sector, which grew 16 percent during 1986 and 1987. During the first half of 1989, the agriculture, forestry, and fisheries sector grew 5.9 percent, as opposed to manufacturing's 2.9 percent.
Rice was the most important crop and yields were impressive. As noted by Donald S. Macdonald, however, rising wage levels and land values have made it expensive to produce. Rice represented about 90 percent of total grain production and over 40 percent of farm income; the 1988 rice crop was 6.5 million tons. Rice was imported in the 1980s, but the amount depended on the success of domestic harvests. The government's rice support program reached a record US$1.9 billion in 1986, as compared with US$890 million in 1985. By raising procurement prices by 14 percent over the 1986 level, Seoul achieved a rice price structure that was about five times that of the world market in 1987.
Barley was the second most important crop. Its production declined from about 1.5 million tons in 1970 to about 561,500 tons in 1988. Other crops included such grains as millet, corn, sorghum, buckwheat, soybeans, and potatoes. Fruits and vegetables included pears, grapes, mandarin oranges, apples, peaches, Welsh onions, Chinese cabbage, red peppers, persimmons, cabbage, peaches, and radishes. Other important cash crops included cotton, hemp, sesame, tobacco, and ginseng. In 1988, livestock heads included native Korean cattle (2 million), hogs (4.9 million), and poultry (almost 59 million).
The Agricultural Crisis of the Late 1980s
Agricultural labor costs rose as young people left rural areas for urban jobs, and farm work mainly was done by women and old men. Farmers' relative earnings improved during the 1970s, but fell in the 1980s. The gap between incomes of urbanites and people in rural areas widened considerably in the late 1980s. In 1988 the average income of people in gun (counties) amounted to 79.1 percent of that of people in cities, as compared with 84.7 percent in 1985. South Korean farming households earned about US$12,000 in 1988, up 24.4 percent from 1987. In comparison, the average income for an urban family in 1989 was about US$15,000. Nonfarm income in 1989 comprised 39.5 percent of average farm household earnings, as compared with more than 50 percent in Japan and approximately 70 percent in Taiwan.
Farm families accumulated debts averaging about US$4,620 per household in 1988 and had average assets of about US$66,057. The purchase of modern farm machinery as well as of many new consumer goods contributed to higher debts. The 35 percent rise in assets between 1987 and 1988 mainly was because of a 41 percent increase in the price of land. Budgetary pressures from the government on agricultural price supports also reduced farm income.
There was increased rental of farmland in the 1980s. The percentage of rented farmland among total farmland rose from 21 percent in 1980 to 30.5 percent in 1985. The percentage of farm households renting some of their land among total farm households expanded rapidly from 37.1 percent in 1980 to 64.7 percent in 1985. Nonfarmer ownership of tenant farmland also increased to 63 percent in 1985.
The farmers who rented land were mainly the small-landed farmers adversely affected by Seoul's agricultural open-door policy of the 1980s. Under this policy, the government sought cheap cereal prices by increasing cheap imports and promoted large-scale farming where crops could be produced more cheaply and efficiently. In the early 1970s, a farm family could meet almost 100 percent of household expenses by farming 0.5 to 1 hectare, but by 1985 such small plots of land only met 59.8 percent of expenses. Many farmers had to rent extra land to augment their incomes.
Poor prospects on the farm depleted farm villages as the young left and the old died. Parents sent their children to the towns and cities for a better education. Young farmers who could not find wives also left for the cities.
The government initiated various programs to improve rural conditions. The most extensive of these was the New Community Movement (Saemaul undong, known as the Saemaul Movement). Its goal was to mobilize villagers in their own service. At first Saemaul projects were aimed at improving household living conditions. Later, projects were directed more to the village as a whole and included the construction of roads, bridges, irrigation ditches, and common compost plots. Next, the program focused on more economic concerns--group farming, common seed beds, livestock production, forestation, and even joint marketing and factories. Better health and sanitation as well as beautification of the environment also became program goals. The government provided the materials and small amounts of money to the villagers, who supplied the labor. In the early 1980s, President Chun removed control over the Saemaul Movement from the Ministry of Home Affairs and left most decisionmaking to the Saemaul leaders and bureaucrats, headed by the president's younger brother, Chon Kyong-hwan. The Saemaul Movement initially was quite successful but deteriorated in the early 1980s. Chon Kyong-hwan, arrested on a variety of corruption charges in 1988, was accused of large-scale extortion and embezzlement while he was chairman of the movement between 1981 and 1987.
South Korea, a high-cost agricultural producer, prohibited unrestricted beef and rice imports and severely limited many other agricultural imports. Foreign trading partners such as the United States pressured South Korea to open up the agricultural market, but Seoul said that its farmers would be hurt badly by the importation of inexpensive beef, rice, tobacco, and other products. In April 1989, Seoul released a list of 243 agricultural products scheduled for import liberalization by 199l, but the list did not include beef. In the late 1980s, many farmers, were already deeply in debt, told by the government that they might have to compete in the world market and took to the streets to protest against foreign demands and to demand further protection from the government.
In the late 1980s, farmers gained political strength through the increased activities of various farm associations and the formation of new organizations, such as the National Association of Farmers (Chon'guk-nongmin hyophoe) established in 1987. The Korean Catholic Farmers Association and Protestant Farmers Association became active in 1987. These and other independent farm groups applied strong pressure on the government to alleviate their problems. Rural residents made up less than one quarter of South Korea's voters, but they elected almost half of the National Assembly; thus, they exercised virtual veto power over farming legislation.
More about the Economy of South Korea.
Source: U.S. Library of Congress