The public value of food security and other agricultural functions in South Korea amounts to as much as 31.6 trillion won ($22.3 billion) per year, according to a new analysis. The figure encompasses the economic worth of maintaining stable domestic food production, securing overseas supply chains and ensuring that consumers can buy essential food at reasonable prices.
The findings were presented Saturday at a policy forum on food security organized by the Korea Rural Economic Institute, or KREI. Yoo Chan-hee, a KREI research fellow, delivered a presentation titled "Results of Food Security Index Development and the Value of Food Security," in which he assessed the public functions of agriculture — including food security — in economic terms.
The researchers divided the value of food security into three broad categories: maintaining the domestic supply base, securing overseas supply channels and guaranteeing food accessibility. They then added the economic value of other agricultural public functions — such as environmental conservation — to arrive at a total figure.
The table below summarizes the estimated annual economic values by category:
Category | Economic value Maintaining domestic food production base | 5.08 trillion won – 5.82 trillion won Securing overseas food supply base | 461.6 billion won – 470.8 billion won Combined domestic and overseas supply base | 5.93 trillion won – 5.96 trillion won Guaranteeing food accessibility | About 5.9 trillion won Agricultural public functions beyond food security | About 20 trillion won – 21 trillion won Total public value | Up to 31.6 trillion won
The combined economic value of maintaining domestic and overseas food supply bases was estimated at about 5.9 trillion won per year. Because market prices alone are insufficient to capture this value, the researchers used contingent valuation methodology, or CVM, surveying consumers on how much they would be willing to pay in additional costs.
Willingness to pay for maintaining the domestic food production base was estimated at 5.08 trillion won to 5.82 trillion won per year. Securing overseas food supply channels was valued at 461.6 billion won to 470.8 billion won annually. Combined, the two categories total 5.93 trillion won to 5.96 trillion won per year.
The value of "food accessibility" — ensuring that people can reliably purchase food — was also estimated at about 5.9 trillion won per year. The researchers calculated this figure by converting the projected increase in consumer spending during a food supply shock into an economic value.
If rice and wheat output were to fall simultaneously, the resulting increase in consumer spending was estimated at 4.13 trillion won to 4.37 trillion won. Should a simultaneous drop in rice and wheat production be compounded by mass pig deaths, the additional burden on consumers could rise to 6.81 trillion won to 8.56 trillion won.
Agricultural public functions beyond food security were also found to carry substantial economic value. Based on existing research, functions including flood control, groundwater recharge, climate change mitigation, air purification, soil erosion reduction and water purification were estimated to be worth about 20 trillion won to 21 trillion won per year.
The researchers took a broad view of food security, looking beyond the simple question of whether enough food is produced. They also developed a "Korea-specific food security index" designed to assess whether citizens have economic access to food, whether supply is stable and whether the production system is sustainable.
When index weights were calculated, domestic supply infrastructure carried the highest weighting at 0.602. Food accessibility came second at 0.219, followed by overseas import infrastructure at 0.179. The results indicate that maintaining a stable domestic production base is the single most important factor in South Korea's food security.
Yoo said the economic value of food security should be assessed to include not only the maintenance of domestic production capacity but also overseas supply chains and citizens' access to food. He also proposed that the newly developed food security index be used in policy design, monitoring and vulnerability assessment, and that a traffic-light system be adopted to gauge risk levels and set policy priorities.
adastra@heraldcorp.com
