Innovation, Agricultural Productivity and Sustainability in Korea is a part of the OECD Food and Agricultural Reviews series. The review was implemented as a co-operative activity with the Korea Rural Economic Institute (KREI) under the leadership of Chang-Gil Kim. It examines the conditions in which farms and businesses in Korea undertake innovation in the food and agriculture sector to become more productive and environmentally sustainable. It starts with an overview of the food and agriculture sector and outlines development challenges and opportunities (Chapter 2). A wide range of policies which influence incentives for innovation are then examined: a favourable and predictable environment for investment (Chapter 3); capacities and public services enabling business development (Chapter 4); agricultural policy (Chapter 5) and the operation of the agricultural innovation system (Chapter 6).

Korea has achieved the fastest growing income per capita amongst the OECD economies over the past 25 years. During that time, the share of primary agriculture in the economy has declined as its export-driven economy has reallocated capital and human resources to manufacturing. The food and agriculture sector has been under pressure to meet changing domestic demand, to improve its productivity to keep up with the highly competitive manufacturing sector and to increase its exposure to international competition under the GATT Uruguay Round Agreement on Agriculture and bilateral Free Trade Agreements (FTAs). The societal demand on agriculture has diversified from focussing on stable supply of food to other functions of agriculture, such as preservation of natural resource and ecosystem as well as traditional culture and rural landscape.

This chapter presents the framework used in the report to analyse the extent to which policies in Korea are supportive of innovation and structural change, and the extent to which they affect access to, and use of, natural resources for productivity growth and sustainability. It also gives an overview of the review’s findings on a wide range of policies and develops specific recommendations for related policy areas.

This chapter describes the overall economic, social and environmental context in which the food and agriculture sector in Korea operates, and the natural resource base upon which it relies. It provides an overview of the general geographical and economic characteristics of Korea; outlines the share of the agri-food complex in the economy; identifies the main structural characteristics of the food and agriculture sector; provides an overview of the main food and agriculture outputs and markets; and analyses the main trends in agricultural productivity, competitiveness and sustainability. It finally raises a number of issues the agri-food complex is likely to face in the future.

This chapter gives an overview of the performance of the overall economy, macroeconomic developments and challenges, governance and institutions, and general incentives in Korea for investments by firms, including farms, input suppliers and food companies. It discusses basic conditions for investment established by the overall regulatory environment; trade and investment policy, which influences the flow of goods, capital, technology, knowledge and people needed to innovate; and access to credit needed to innovate. The general fiscal policy and the treatment of agriculture are then discussed. Specific obstacles and incentives for investment in the agricultural sector are dealt with in later chapters of this report.

Capacity building, including provision of essential public services, is one of the main channels or incentive areas to support innovation and sustainable development. This chapter concerns four relevant policy areas: infrastructure and rural development policy; land use planning and regulation, water policy; labour market policy; and education and skills policy.

This chapter provides an overview of developments in agricultural policies in Korea. It also reports on trends in the level and compositions of support and discusses the likely impacts of agricultural policy measures on structural change, environmental performance and innovation in the sector.

This chapter describes the agricultural innovation system in Korea and outlines the recent changes it has undergone. It first provides an overview of the general innovation system; presents agricultural innovation actors and their roles in the system; outlines changes in roles and themes of R&D; and presents the main policy instruments and monitoring efforts. It then reviews the main trends in public and private investments in R&D, the funding mechanism and the means used to foster knowledge markets and networks. This is followed by an overview of policy incentives for the adoption of agriculture innovation, with an emphasis on the role of training and advisory services at farm level.