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| A consumer reaches for a milk carton at a retail chain store in Seoul. Korea Times file |
By Lee Kyung-min
A group of dairy farmers is threatening an all-out strike followed by a refusal to supply milk for confectionery and coffee-making industries, in protest of the government's plan to lower milk prices, according to the association of dairy farmers Thursday.
The Ministry of Agriculture, Food and Rural Affairs is seeking to establish a new method of setting milk prices so as to reflect falling market demand, a years-long overhaul move opposed fiercely by dairy farmers who maintain that the current production cost-tied method remain in place.
The supplier-friendly status quo comes at the expense of consumers, many of whom have turned to cheaper imported milk. Korea's self-sufficiency ratio of raw milk fell to 48.1 percent in 2020, down from 77.3 percent in 2001. The number of dairy farms slumped to 4,929, down 61.1 percent from 12,827 over the same period. The number of livestock decreased to 410,000, down 25.2 percent from 548,000.
Vested interest?
Korea Dairy & Beef Farmers Association said its members will hold a rally in Yeouido, Seoul, Feb. 16.
"The government, in the name of price stability, is suppressing dairy farmers," the group said in a statement. "This is an abuse of administrative power, enabled by collusion with the country's milk-processing businesses where former bureaucrats seek to earn money after retirement."
The statement followed an impasse over the government's plan to categorize raw milk into two options ― one for consumer sales and the other as a raw material for processed products.
The ministry says the per-liter price of milk for wholesale and retail sales should be kept at 1,100 won ($0.92), whereas the figure for makers of processed milk products should be lowered to 800 won. It plans to cut the supply price further to 600 won for processed product makers after shouldering 200 won in the form of state subsidies, in a bid to reduce the burden of raw material costs and bolster the use of locally produced raw milk.
However, farmers say the plan is irresponsible, since the price cut does not guarantee an increase in raw milk demand by more processed product makers.
Another sticking point has to do with the farmers' fury over a recently approved change to the Korea Dairy Committee, an interest group representing dairy producers set up to control the market supply of milk, changing the makeup of its board to reduce the influence of farmers.
The revised rule no longer requires the attendance of two-thirds of the 15 members for the board to convene, essentially removing any possible deadlock by technicality, given that the board currently has seven farmers sitting on it.
Discussions at the board will move forward as long as the remaining eight representatives from the government, academia and consumer groups ― a majority ― are in attendance.
Data from the ministry shows per-capita milk consumption fell to 31.8 kilograms in 2020, down 12.9 percent from 36.5 kilograms in 2001, whereas the figure for processed dairy products including cheese, butter and ice cream rose to 83.9 kilograms, up 31.3 percent from 63.9 kilograms.
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