How Economic Dependency Was Created Through the WTO: A Case Study of South Korea

Abstract

Adapting the framework of dependency theory, the article asks how the economic dependency of less developed countries (LDCs) on developed countries (DCs) is created through free trade. This article uses South Korea’s entry into the World Trade Organization (WTO) as a case study to illustrate this economic dependency creation process. Based on second-hand data from existing studies, the European Union, and the WTO, this article finds: (i) due to limited farmland size and high production costs, South Korean agricultural products cannot win a seat in the world market; (ii) the local agricultural sector was destroyed in South Korea because small farmers cannot earn a living by farming; and (iii) since the local agricultural sector cannot support the food demand in South Korea, South Korea now has to import a large amount of food. This article concludes that free trade actually destroys the local agricultural industry and the food security of South Korea, and consequently makes South Korea have to rely heavily on DCs for food import.

Keywords

Dependency theory food security small farmers free trade

Introduction

While the World Trade Organization (WTO), which was established to promote and secure free trade in the world, was having its fifth ministerial conference at Cancun, Mexico, in March 2003, millions of protesters who had come from all around the world demonstrated outside the conference center. Kyung-Hae Lee, who was carrying a sandwich board that said “WTO Kills Farmers!” climbed the chain-linked fence of the gate at the entrance of the conference center and stabbed himself in the heart with an old Swiss Army knife. Lee was a South Korean farmer and former parliamentarian of South Korea (Anonymous, 2004). He wanted to raise people’s awareness by confronting them with the reality that millions of farmers in less developed countries (LDCs) cannot earn a living by farming and were abandoning their farmlands because their living had been ruined under policies of free trade. He demanded the WTO’s abandonment of the Agreement on Agriculture (AoA) (Watts, 2003).

The struggle to exclude agriculture from the WTO still continued after Lee’s suicide. In December 2005, the 6th WTO ministerial conference was held in Hong Kong. 10 thousand farmers from South Korea and other LDCs gathered in Hong Kong, and again requested that agriculture be excluded from the control of the WTO. These farmers tried to reach the conference venue by fighting with police officers, swimming across Victoria Harbour, and marching to the venue to voice their wishes (Korean Peasants League, 2006; Luk, 2005).

Why did these farmers protest against the WTO? As a member of the university WTO concern group, I participated in the demonstration and I asked Mr Park, a South Korean farmer, why they were protesting. He told me that opening the market to foreign agricultural products hurt local farmers in Korea. Tons of cheap imported agricultural goods flowed to South Korea and drove prices down. Since then, farmers have not been able to earn more than what they had spent, resulting in debt and causing them to give up farming. To save traditional farming in South Korea, they had dedicated their lives to protesting against the WTO.

The question is, “What is wrong with the WTO and free trade?” The Hong Kong government told people that free trade was good for them since it would let the people have a variety of choice and enjoy cheap products (Tong, 2005). Even within the Millennium Development Goals (MDG) of the United Nation (UN), the UN also stressed the importance of free trade for boosting development in LDCs and improving the living standard of people there (Unwin, 2007). Based on the above, it can be assumed that every person in the population should benefit from free trade.

Thesis Statement

The account above indicates that there is a heated debate on the effects of free trade on the agricultural industry. On the one hand, governments are teaching people to treasure the chance of having free trade. On the other hand, millions of farmers regard free trade as something evil.

This article argues that the existing free-trade system fails to bring benefits to the majority of small farmers in LDCs. This free-trade system, instead, destroys the local agricultural industry and diminishes the food security of LDCs. This makes LDCs have to rely heavily on developed countries (DCs) for food import. Thus, economic dependency on DCs is created.

Objective

The first aim of this article is to reveal the damage caused by the existing free-trade system on small farmers in LDCs. The majority of people, many government officials, and some scholars (Beghin, Bureau & Park, 2003) believe that the free-trade system is good for the world due to its promise of cheaper products and more choice. But in fact, not everyone can benefit from free trade, especially farmers in LDCs. However, very few people have considered the side effects of free trade. This article attempts to tell the farmers’ stories so that more people can learn of the dark side of the existing free-trade system.

The second aim of this article is to show that the WTO is a platform made for LDCs to be more economically dependent on DCs. The objective of the WTO is to create an open market for all member states to participate in. But, actually, not all member states are equal in the WTO. DCs have more economic power, while LDCs have less power. Due to this unfairness, DCs can get opportunities to force LDCs to be dependent on them through the WTO. This article tries to document how economic dependency was created through the WTO.

Theoretical Framework

This article adopts dependency theory as a framework to analyze how the WTO creates an opportunity for DCs to make LDCs dependent on them economically. Dependency theory mainly argues that the process of poverty in LDCs is induced externally as a consequence of unequal relationships between DCs and LDCs. Since DCs are more powerful than LDCs, they can decide how to trade with LDCs by controlling the content of the open market agreement signed with LDCs, such as the AoA in the WTO. These free trade and unequal exchanges give DCs an opportunity to create the LDCs’ dependency on them (Saul & Leys, 2006).

Literature Review

Since the beginning of the globalization projects, free trade has been admired as a panacea to eliminate poverty and boost development in LDCs (Unwin, 2007). A good example is the MDG Project of the UN. In this neoliberal agenda, the ideas of free trade, liberal democracy, and economic growth are dominant. Another example is the British Government’s issuance of the UK White Article on international development in 1997, in which the Secretary of State for International Development stressed that “Trade and investment are crucial to poverty elimination … multilateral liberalisation of trade in agriculture, including increased access to markets in all DCs, and the phasing out of export subsidies, has huge potential benefits for developing countries” (Secretary of State for International Development, 1997, p. 58, 61). Here again, free trade was portrayed as a key to eliminate poverty.

In fact, on 1st January 1995, before the MDG was carried out, Western countries established the WTO to replace the General Agreement on Trade and Tariffs (GATT) as a free-trade promoter. According to the homepage of the WTO, the aim of the WTO (2013) is expressed in the following quote: “The opening of national markets to international trade, with justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable development, raise people’s welfare, reduce poverty, and foster peace and stability.” The WTO has a judicial system and the power to enforce its rules on member states. Sanctions will be imposed on those member states that do not follow the guidelines of the WTO (McMichael, 2011).

In regard to the agricultural sector, the WTO stresses that free trade can create a fairer market for farmers. The WTO claims that GATT allowed countries to implement an import quota system and export subsidies. These measures distort trade, and make access to the market difficult. Therefore, according to the WTO, in order to level the playing field for all farmers, it is essential to create fair competition and a less distorted market by ensuring market access, prohibiting export subsidies, and eliminating import restriction policies (World Trade Organisation [WTO], 2013).

Agricultural economists (Chang, Lee & Hsu, 2013; Diao, Roe & Somwaru, 2002) support free trade as it can speed up development in LDCs. Many LDCs carry out policies, such as tariffs, subsidies, and administration fees, to protect their national food security. But, these distortions in policy are not effective tools to achieve the aim of food security. They in fact impose high prices on agricultural products for consumers and cause welfare losses. This is unfair to consumers and makes food access difficult for the poor (Beghin et al., 2003). For instance, the case of South Korea (Beghin et al., 2003) shows that each 1 won in subsidies to farmers cost consumers and taxpayers around 1.6 won. Instead of using trade distortion policies, Beghin and colleagues (2003) found that free trade and setting production quotas are more effective ways to provide the same level of protection to farmers, and secure the food level. So, they recommend that LDCs give up trade distortion policies and endorse free trade.

On the other hand, dependency theorists have opposite opinions (Emmanuel, 1972; Frank, 1969). They argue that free trade creates room for DCs to make LDCs dependent on them. Trading with rich countries without protection is detrimental for poor countries because of the inherent dynamics of international capitalism (Shandra, Shircliff & London, 2011). Free trade gives the rich countries an opportunity to exploit the labor and resources of poor countries. In other words, free trade involves unequal relationships between the rich countries and the poor countries.

Dependency theorists explain that there are three ways for rich countries to exploit poor countries (Cruz & Repetto, 1992; Kaimowita, Thiele & Pacheco, 1999). One way is by exporting products to poor nations. For instance, in their cross-national studies, Moon and Dixon (1985) documented that free trade is negatively related to the provision of basic needs, such as food, water, or education. This means that the higher is the level of free trade, the lower is the level of basic needs provision people can have. A good example is Malaysia. After joining the WTO, Malaysia opened the local agricultural market to the world. Since then, tones of agricultural products have flooded the market in Malaysia. This flooding of cheap foreign crops drove the price of local agricultural products down. For example, in 1997, the price of pepper dropped dramatically from RM 12 per kilo to RM 9 per kilo for white pepper and RM 9 per kilo to RM 4 per kilo for black pepper. As farmers’ income could not cover the necessary expenditures on fertilizer, insecticide, and weed killer, they had to abandon their farmland and seek jobs in cities (Borneo Indigenous and Peasant Movement Malaysia, 2006). Consequently, the national food security has been destroyed.

The second form of exploitation is through the investments of transnational corporations. These investments had bad effects on LDCs by increasing income inequality, over-urbanization, environmental degradation, and the lack of basic needs. For example, in 2008, the UK’s Prince Charles warned of a humanitarian crisis in India because of the monopolization of seed by Monsanto India. Although he was criticized for being a scaremonger, his warning was, in fact, true (Malone, 2008). Since Monsanto entered the Indian agriculture market in 1988, they have controlled 95 percent of the cotton seed supply there by claiming traditional cotton seeds, which are farmers’ common resources, as Monsanto’s intellectual property, and promoting genetically modified (GM) seeds. Cotton farmers have to buy seeds from Monsanto, and they are forced to purchase the GM seed which costs them £10 per 100 grams. These GM crops require much more chemical insecticide and fertilizer, and do not produce viable yields. The high cost of chemicals and seeds traps farmers in debt. Worse still, the GM seeds can pollute the farmland nearby; this meant that Monsanto could sue these farmers for illegal use of Monsanto’s property (Shiva, 2013). Due to this debt trap, the Ministry of Agriculture recorded more than 1000 suicides among farmers each month in 2008 (Malone, 2008).

The third form of exploitation is by debt and loans. This trend mainly concerns how the structural adjustment policies and loans policies of the International Monetary Fund (IMF) or World Bank (WB) affect people’s lives in LDCs, as measured by such factors as child mortality and deforestation (Shandra, Shircliff & London, 2011). For example, following WB’s instruction, the Philippine government implemented the structural adjustment policies during the 1980s and 1990s. These policies resulted in a 20 percent wage reduction and a high rate of unemployment. As people could not seek jobs or earn enough in cities, they moved to rural areas and cut down trees to grow subsistence crops. Thus, forests were lost (Cruz & Repetto, 1992). Similarly, the Bolivian government was requested by the WB to implement structural adjustment policies to reduce the tax on the logging industry in Bolivia. Consequently, forestry losses increased from 13,000 hectares in 1985 to 115,000 hectares in 1994 (Kaimowita et al., 1999).

This article follows the line of dependency theory by focusing on the ways DCs force LDCs to depend on them by destroying LDCs’ national food security. I am using the entry of South Korea into the WTO as an example to show how the WTO plays a role as a platform for DCs to force LDCs to be dependent on them. First, I investigate how the WTO destroyed the local agricultural industry in South Korea through unequal exchange of agricultural products with DCs. Second, I examine how food security was affected, resulting in dependency.

Data and Method

This article uses second-hand data from existing literature and Statistics Korea. To determine the impact of free trade on farmers in South Korea, data collected by Statistics Korea on the amount of imported agricultural products, the price of main agricultural products, income disparity between farmers and urban residents, and the financial situation of farmers are included. Data and information collected by scholars and from the mass media are also used.

Analysis

In the 1970s and 1980s, South Korea was one of Asian countries which largely supported its agriculture (Chang, Lee & Hsu, 2013; Lee & Lee, 2009). The experiences of severe food shortage from the Korean War (1950–1953) to the 1970s made the public and the South Korean government insist that it was essential to secure the food supply as much as they could. Therefore, the government implemented a set of policies to protect the domestic agricultural sector. These policies can be divided into two categories: those that protect local farmers, and restrictions on foreign agricultural products. To protect local farmers, the South Korean government provided high production subsidies and purchased products from domestic farmers at high prices. In regard to restrictions on imported agricultural products, the South Korean government imposed a quota system on imported products, high tariffs, and non-tariffs barriers, such as high administrative fees and sanitary restrictions (Kang, 2006).

These food security policies contradicted the aim of the WTO’s AoA. The AoA is an international treaty of the WTO, which was negotiated in 1986 during the Uruguay Round meeting of GATT (the precursor organization of the WTO), and was in effect before the WTO was established on 1st January 1995. The aims of the AoA are to (i) liberalize agricultural markets by reducing tariff subsidies, or other domestic agricultural protection policies, and abolishing non-tariff restrictions; and (ii) develop clearly defined agricultural products and non-agricultural products. In general, member states who have signed this agreement must reduce tariffs on all agricultural products by 36 percent, reduce domestic agricultural support by 20 percent, and reduce export subsidies by 30 percent. For LDCs, tariffs on average must be reduced by 24 percent, while domestic agricultural support and export subsidies must be reduced by 13 percent and 24 percent, respectively. All state members were expected to fully carry out these policies during the period of 1995–2004, except under-development countries (WTO, 2013).

Under the effect of the AoA, South Korea, a member state of the WTO, was forced to open its agricultural market and abolish its agricultural protection policies (Kim & Lee, 2004). Initially, South Korea tried not to open up its agricultural market and not abolish food security policies. However, as the WTO has complaint and judicial systems, other WTO member states complained to the WTO that South Korea did not follow the AoA regulations. These states also claimed that while enjoying the benefit of global industrial export opportunities, the South Korean government imposed very high restrictions on imported agricultural products. It was not a fair game. The South Korean government explained that these protection policies were essential for raising farming income, reducing rural to urban migration, and meeting public financial needs. However, the WTO did not recognize these political and economic factors as legitimate reasons for the existence of agricultural subsidies policies, and ruled that South Korea must open its agricultural market as soon as possible (Beghin et al., 2003). As a result, the AoA had an impact on South Korea.

Economists argue that open markets and free trade are in the common interest of most developing countries because developing countries gain profits by trading with DCs with fewer restrictions (Diao et al., 2002). Below, this article will show the impact of the AoA on the South Korean agricultural sector in order to find out whether or not the AoA gives opportunities for South Korea to boost its agriculture and improve farmers’ living standards.

Once South Korea signed the AoA, it was requested to cut its subsidies on agriculture. As South Korea had the status of a developing country, it received special treatment in terms of tariff reduction, with a minimum reduction rate for 10 years of 10 percent instead of 20 percent required of developing countries (Kang, 2006). Table 1 shows the reduction rate of South Korea’s tariff on agricultural products. Before the AoA came into effect, the total amount of subsidies, which the WTO described as Aggregate Measurement of Support (AMS), was 1719 billion won. In 1995, the amount was 1696 billion won, which represented a reduction of around 2 percent. In 2004, the support was reduced by 14 percent to 1490 billion won (Kang, 2006, p. 6).

Another requirement of the AoA is the opening of the agricultural market. According to the minimum market access (MMA) policy, South Korea was required to increase the imported agricultural products share from less than 3 percent to 5 percent within 10 years. The South Korean government was not allowed to impose high tariffs on the in-quota volume. As a result, many key agricultural producers in South Korea are now facing the challenges of imported products, such as rice and barley (Kang, 2006).

Table 1.

Aggregate Measurement of Supports (AMS) Reduction Schedule for Korea (Billion won)

Year	Baseline	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004
Amount of AMS	1719	1696	1672	1650	1627	1604	1581	1559	1536	1513	1490
Reduction rate		2.00%	3.00%	5.00%	6.00%	7.00%	9.00%	10%	11%	12%	14%

Source: Kang (2006, p. 6).

Rice is as an example of the influence of the AoA on the local agricultural market in South Korea. Table 2 shows the amount of rice production in South Korea and the amount of imported rice. The amount of imported rice rose from 1 percent in 1994 to 4 percent in 2004. But, as it negotiated with the WTO regarding the importance of rice in country, South Korea obtained an exemption that all imported rice would be used in the food industry instead of being sold in the market. However, this exemption ended in 2004, and South Korea had to open its market to the world (Kang, 2006).

In the 2000s, South Korea asked for an extension of the MMA for 10 more years. The South Korean government stressed that they were facing political pressure, and old rice farmers had difficulties finding new jobs (Kang, 2006, p. 9). Finally, the MMA was extended, but with a revision. Under the new MMA, imported rice can be sold in the public market, and the amount of selling cost increased from 10 percent in 2005 to 30 percent in 2013 (see Table 3).

As described previously, Korean farmers are facing two challenges: reduction of governmental subsidies and increased competition in the local agricultural market. But what did they gain from the AoA? As the WTO stresses that the AoA give opportunities for fair trade between countries, farmers can gain benefits from this trade. Below, I examine the case of the EU, one of the largest agricultural markets in the world, as an example to highlight what farmers in South Korea gained from the liberalization of trade in the agricultural sector.

Table 2.

Rice Production in South Korea and Amount of Imported Rice in South Korea

Year	Rice Production in South Korea (Tons)	Imported Rice (Tons)	Shared % of Imported Rice in the Market
1994	5,059,764
1995	4,694,956	51,307	1
1996	5,322,962	64,133	1.25
1997	5,449,561	76,960	1.5
1998	5,096,879	89,787	1.75
1999	5,262,700	102,614	2
2000	5,290,771	102,614	2
2001	5,514,796	128,267	2.5
2002	4,926,746	153,920	3
2003	4,451,135	179,574	3.5
2004	5,000,149	205,228	4

Source: Kang (2006, p. 7).

Table 3.

2005–2013 Extension of MMA

Year	Imported Rice (Tons)	% of Imported Rice Sale at the Market
2005	225,575	10
2006	245,922	14
2007	266,269	18
2008	286,617	22
2009	306,964	26
2010	327,311	30
2011	347,568	30
2012	368,006	30
2013	388,353	30

Source: Yoo-Duk Kang (2006, p. 9).

Table 4 shows the amount of agricultural products imported from South Korea to the EU from 2008 to 2012. Among all imported agricultural products, Korean products only constituted a small amount: 378 million euros (1 percent of total imported agricultural products) in 2008 and 579 million euros (1.5 percent of total imported agricultural products) in 2012 (European Union, 2009, 2013a). Furthermore, the agricultural products imported from South Korea included raw materials such as cotton. Considering only the live animals and animal products and vegetable categories, the market share of South Korean products is much smaller. Table 5 shows the values of EU imports from South Korea, with 78 million euros in live animal and animal products and 16 million euros in vegetables in 2008, and 70 million euros in live animal and animal products and 20 million euros in vegetables in 2012 (European Union, 2009, 2013a). The market share rates in 2008 and 2012 of these two types of products in EU were both <1 percent.

Table 4.

European Union Import Product from South Korea

	2008	Share of Imported Product in EU	2010	Share of Imported Product in EU	2012	Share of Imported Product in EU
Agricultural products (food and raw material)	378 (million euro)	1%	430 (million euro)	1.10%	579 (million euro)	1.50%

Source: European Union (2009, 2013a).

Table 5.

Agricultural Products Imported from South Korea to EU and Exported to South Korea from EU (Million euro)

	EU Import from South Korea					EU Export to South Korea
	2008	2009	2010	2011	2012	2008	2009	2010	2011	2012
Live animal and animal products	78	72	77	65	70	350	268	380	742	624
Vegetable products	16	14	15	17	20	85	122	254	182	243

Source: European Union (2013a, p. 8).

On the other hand, EU products are also exported to South Korea. Table 5 shows the amount of live animal and animal products and vegetables that were exported to South Korea from 2008 to 2012. In 2008, exports in the live animal and animal products and vegetables categories were 350 and 85 million euros, respectively, which had sharply increased to 624 and 246 million euros, respectively, by 2012 (European Union, 2009, 2013a). The market share rate of EU product in South Korea is much larger than the market share rate of South Korean product in EU. For example, EU dairy products has 14 percent of market share in 2012 (United States Department of Agriculture, 2013). From these tables, it is evident that South Korean products failed to occupy a significant place in the EU agricultural market, and South Korea is suffering from trade imbalance with regard to agricultural products imported from the EU.

The geographical features of South Korea do not allow South Korean agricultural products to win a place in the EU market. Table 6 shows the top 10 largest EU trading partners in regard to agricultural products, and the amount of agricultural products imported from these countries in 2012. The top four are Brazil, the USA, Argentina, and China (European Union, 2013b). These countries have larger areas of arable farmland compared to South Korea. This large farmland allows farmers to implement mechanization in order to practise commercial farming. The large scale of operation can lower the cost of agricultural products and increase production (Schnepf, Dohlman & Bolling, 2001). In contrast, South Korea is a hilly country and farmland there is very limited. It is not suitable for mechanization. Consequently, the farming style there is small-scale farming with high production costs and low productivity. Due to these limitations, South Korean products are not able to compete with products from large agricultural countries in the EU market.

The result of these trade policies is that farmers in South Korea can no longer earn a living from farming. Facing the challenge of imported agricultural products in South Korea, and the failure of export products to the world, farmers in South Korea are severely hurt. Table 7 shows the rural–urban household income gap from 1985 to 2004. Before joining the WTO, farmer rural household income was almost the same as urban household income. But after the AoA came into effect, the gap increased. In 2000, the income of an agricultural household was only 81 percent of that of an urban household, and the number dropped to 73 percent in 2002 (Kim & Lee, 2004). This means that farmers earned less than urban residents in response to South Korea’s becoming a member state of the WTO. Worse still, the income from farming is decreasing year by year. Table 8 shows the share of farming income of agricultural households. The share of off-farming income was 35.5 percent in 1985. But since 1995, the year the AoA went into effect, the share has risen dramatically so that in 2001, more than half of agricultural household income was from off-farming income (Kim & Lee, 2004). Furthermore, the above tables also show that even though the income of farmers increased annually, it could not catch up with the inflation rate in South Korea. Since earnings cannot cover the cost of farming, an increasing number of farmers have fallen into debt. Table 9 shows that the average debt of agricultural households was only 16,000 won in 1970, but the number skyrocketed to 26,619,000 won in 2003 (Korean Peasants League, 2006).

Table 6.

2012 EU Top 10 Imports Partners

	Imports Amount (Million euro)	% of Agricultural Product Imported to EU
Brazil	14.196	14
USA	8.342	8
Argentina	6.114	6
China	4.489	4
Switzerland	4.178	4
Ukraine	4.123	4
Indonesia	4.088	4
Turkey	3.636	4
India	2.783	3
Malaysia	2.512	2

Source: European Union (2013b).

Table 7.

Rural–Urban Household Annual Income Gap (1000 won)

Year	Farm Households	Urban Households	Ratio
1990	11,026	11,319	0.97
1995	21,803	22,933	0.95
2000	23,072	28,643	0.81
2002	24,475	33,509	0.73

Source: Kim and Lee (2004, p. 10).

As people cannot earn a living by farming, the agricultural sector in South Korea has deteriorated. Table 10 shows the number of farming population and farming households. In 1970, the farming population in South Korea was 14,421,730 people, but the number of farming population dropped by 77 percent to 3,414,551 in 2004 (Korean Peasants League, 2006). The number of farming households shows the same pattern. From 1980, the number of farming households dropped 50 percent to 1,240,406 in 2004 (Korean Peasants League, 2006). As the farming population has decreased, more and more farmland has been abandoned. From Table 11, we can see that the farmland in South Korea was 2297.5 ha in 1970, but by 2003, it had decreased to 1846 ha. Interestingly, due to the faster decrease of farming population compared to the decrease in farm size, the size of farms per household increased from 0.93 ha in 1970 to 1.46 ha in 2003 (Korean Peasants League, 2006). Regarding the farming population structure, those who are still farming are elderly. Table 12 shows the age distribution of farmers in South Korea. In 1981, over 50 percent of farmers were under 50 years old. In 2003, more than 80 percent of farmers were 50 years old or above. Almost 60 percent were 60 years old or above (Korean Peasants League, 2006). This means that the agricultural sector in South Korea is facing an ageing problem.

Table 8.

Share of Off-farm Income in Farm Household Annual Income (1000 won)

Year	Farm Income	Off-farm Income	Ratio (%)
1985	5736	2037	35.5
1990	11,026	4762	43.2
1995	21,803	11334	52
2000	23,072	12175	52.8
2001	23,907	12640	52.9
2003	26,878	11428	42.6
2004	29,001	12550	42.9

Source: Kim and Lee (2004, p. 10).

Table 9.

Debt of Agricultural Households in South Korea (1000 won)

Year	1970	1980	1990	1993	2000	2001	2002	2003
Total debt amount	16	339	4734	6828	20207	20376	19898	26619

Source: Korean Peasants League (2006, p. 14).

Table 10.

Farming Population in South Korea

Year	Farm Household	Farm Population	Household Size (People)
1970	2,483,318	14,421,730	5.81
1980	2,155,073	10,826,748	5.02
1995	1,500,745	4,851,080	3.23
2000	1,383,468	4,031,065	2.91
2003	1,264,431	3,530,102	2.79
2004	1,240,406	3,414,551	2.75

Source: Korean Peasants League (2006, p. 12).

Table 11.

Size of Farmland per Household in South Korea

Year	Farmland size (ha)	Farmland size per household (ha)
1970	2297.5	0.93
1990	2108.8	1.19
1995	1985.3	1.32
2000	1888.8	1.37
2001	1876.1	1.39
2002	1862.5	1.45
2003	1846	1.46

Source: Korean Peasants League (2006, p. 13).

Table 12.

Age Distribution of Farmers in South Korea

Year	Total No. of Agricultural Households	Below 30 (%)	30–49 (%)	50–59 (%)	60 or above (%)
1981	2030	104 (5.1)	936 (46.1)	555 (27.3)	435 (21.5)
1990	1767	37 (2.1)	594 (33.6)	584 (33)	552 (31.3)
1995	1501	12 (0.8)	406 (27.1)	447 (29.8)	635 (42.3)
2000	1383	7 (0.5)	322 (23.3)	348 (25.2)	706 (51)
2001	1354	4 (0.3)	274 (20.2)	326 (24.1)	750 (55.4)
2002	1280	3 (0.2)	252 (19.7)	299 (23.3)	727 (56.8)
2003	1264	2 (0.2)	240 (18.9)	293 (23.2)	730 (57.7)

Source: Korean Peasants League (2006, p. 13).

Table 13.

Rate of Foodstuff Self-sufficiency % in South Korea

Year	1970	1980	1990	2000	2001	2002	2003	2004
Rate	80.5	56	43.1	29.7	31.1	30.4	26.9	25.3

Source: Korean Peasants League (2006, p. 12).

The decline of the agricultural sector in South Korea harms the national food security. Table 13 shows the foodstuff self-sufficiency rate. In 1970, 80.5 percent of foodstuffs were produced in South Korea. But, by 2004, the number had dropped to 25.5 percent. This decrease means that almost 75 percent of foodstuffs in South Korea were imported from other countries (Korea Peasants League, 2006). Regarding food security, South Korea now heavily relies on imported food. If the amount of imported food decreased, South Korea would suffer from a food shortage problem. Food security is no longer guaranteed since South Korea became a member state of the WTO.

Conclusion

From the above analysis, we can see that South Korea now has to depend on DCs such as the EU and the USA for importing their food. The WTO, through its agricultural policies, has made South Korea dependent on DCs for its food. Since South Korea joined the WTO, DCs have destroyed the food security policies of South Korea by a series of free trade agreements, such as MMA and AMS. While increasing the amount of foreign products imported, South Korean farmers have difficulties exporting their products to the DCs because of the incompetence of the nation’s agricultural sector relative to those of other big agricultural countries. Consequently, farmers have given up farming, resulting in the deterioration of the agricultural sector. As local agriculture is no longer able to support the demand for food in South Korea, the nation now relies further on imported food.

In fact, the story of South Korea reflects that the WTO is not a level ground on which all countries can trade with one another. In the WTO, DCs can exploit LDCs or those less powerful or resourceful countries through the judicial system in the WTO. For example, South Korea banned the import of Canadian beef because of “mad cow” disease in Canada in 2002. The government of Canada challenged this decision and complained to the WTO in 2009. The WTO judged that South Korea broke the free-trade agreement and that they should reopen the market to Canadian beef (Agriculture and Agri-Food Canada, 2013). Scholars (Ortino & Petersmann, 2004) explain that the judicial system demands large amounts of legal resources and money, leaving LDCs at a disadvantage in this system. We can see that after being a WTO member state, small countries no longer have the power to decide what kind of food the country needs. Second, the DC can fight for benefits for their farmers by negotiating with other countries. For example, the government of Canada signed a set of agreements with the EU with regard to veterinaries, hormone-free beef, genetic modifications, and organic labeling. These agreements can lower the cost of exporting agricultural products to the EU from Canada, such as the cost of testing for hormones in beef. Also, the EU gives the status of most favored nation to Canada, so that tariffs of the EU on Canadian agricultural products are lower. But it is difficult for South Korea to do so as South Korea is less powerful and resourceful.

In sum, LDCs need to work together to change the existing WTO system in order to survive the unfair trade game. While DCs raised an unacceptable proposal to exploit further the agricultural sector in LDCs, LDCs formed a counter group, G-20*, and raised another proposal to protect their local agriculture during the WTO ministerial conference in Doha in 2003 (Hanrahan & Schnepf, 2005). G-20 requested cutting all forms of subsidies within a five-year period: the proposed reduction rate of tariffs in DCs was 45–75 percent, and in LDCs, it was 25–40 percent. As G-20 insists on not negotiating with DCs unless their proposal is accepted, there was no progress in the discussion of further liberalization of agricultural sectors in the world. Thus, DCs can have more time to protect their agriculture. In the future, LDCs should be more united to keep agriculture out of the WTO. Otherwise, the WTO will continue to betray farmers in poor countries, and LDCs will continue to be dependent on DCs.

Footnotes

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