Changing comparative advantage in Korean agriculture : a domestic resource cost study
Date
1982
Authors
In Chan, Ahn
Journal Title
Journal ISSN
Volume Title
Publisher
Canberra, ACT : The Australian National University
Abstract
The role of agriculture in saving or earning foreign exchange
is usually very important for a developing open economy. How important
it is for any particular country depends on the extent of agricultural
comparative advantage enjoyed by that country, which changes as its
economy develops.
The main purpose of this study is to trace the locus of
comparative advantage of rice and barley production in Korea through the
Domestic Resource Cost (DRC) analysis. Secondary data from the Ministry
of Agriculture and Fisheries of the Republic of Korea are used for this
purpose.
The data on foodgrain production and trade and the protection
and DRC estimates for the period 1964 to 1980 reveal that Korea's rice
and barley industries have become both increasingly less competitive
and increasingly inefficient in saving foreign exchange. The production
and trade data show that self-sufficiency in foodgrains has declined
from close to 100 per cent in the mid 1960s to less than 70 per cent in
the late 1970s, despite the fact that prices received by Korean cereal
producers have risen from about equal to world prices in the mid 1960s
to more than three times world prices in the late 1970s.
Over this period the domestic resource cost ratios for rice and
barley have increased from slightly less than unity to three or more,
indicating that on average for each unit of foreign exchange saved by
producing rice and barley domestically rather than importing it,
the Korean economy foregoes about three units of foreign exchange by not being able to use those resources in more productive
activities.
The thesis concludes that policies aimed at facilitating
structural adjustment would be far more appropriate for Korea, given
its rapid decline in agricultural comparative advantage, than
policies aimed at ever increasing protection from import competition.
Description
Keywords
Citation
Collections
Source
Type
Thesis (Masters sub-thesis)
Book Title
Entity type
Access Statement
Open Access
License Rights
Restricted until
Downloads
File
Description