Consequences of further opening of the Korean dairy market

Hyunok Lee, Daniel A. Sumner, Byeong-il Ahn

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

This paper develops a simulation of Korean dairy policy that is tailored to the data, institutions, and policies in South Korea. It compares potential effects of changes in trade and domestic policy to baseline projections to 2015. Beverage milk continues to be supplied from domestic sources, implying imports compete in the manufacture of tradable products. We model manufactured dairy product supply, demand, and trade on a milk fat and non-fat-solid component basis reflecting product fungibility over the 10-year horizon used for our trade policy analysis. We find that if the domestic price support is removed with no change in trade policy, the market price of raw milk falls by about 2% and raw milk production declines by 4.5%. Under substantial tariff cuts of 30-40% with no effective change in domestic dairy policy, Korean fat and non-fat-solid prices fall by 7% and 11%, fat and non-fat-solid imports rise by 9% and 7% and Korea raw milk production falls by about 2% relative to the baseline. Prices of Korean farmer-owned dairy inputs, labor, and capital fall by about 1%.

Original languageEnglish
Pages (from-to)238-248
Number of pages11
JournalFood Policy
Volume31
Issue number3 SPEC. ISS.
DOIs
Publication statusPublished - 2006 Jun 1
Externally publishedYes

Keywords

  • Dairy
  • Korea
  • Policy
  • Trade

ASJC Scopus subject areas

  • Food Science
  • Economics and Econometrics
  • Development
  • Sociology and Political Science

Fingerprint Dive into the research topics of 'Consequences of further opening of the Korean dairy market'. Together they form a unique fingerprint.

  • Cite this