Farm investment

President Lee Myung-bak called on large food companies Thursday to use more of their profits to help move South Korea's farm sector forward through greater investment in agricultural research and development.

   Lee made the remark during a weekly economic meeting, stressing that government-led R&D investment in the agricultural sector is not enough and food companies should contribute from the large gains they make from processing items farmers produce with only small profits.

   "There is a limit in asking farmers to make R&D investment," Lee said during the meeting at the Rural Development Administration. "Large food companies should make R&D investments together with the government if we want to get good results."

   Lee has said agriculture can become a future growth engine for South Korea and farmers should study ways to produce top-quality products and add value to them through additional processing.

   The president made a similar point again in Thursday's meeting.

   "We should not try to compete by producing low-priced agricultural products," he said. "If we produce reliable, high-quality products, they will sell even if they are expensive."

   Lee said South Korea is well positioned to export agricultural products because large markets in China and Japan are nearby, and the number of high income earners in China is rising.

   "The global agriculture market is larger than the auto and IT markets are combined," Lee said later during a speech at the ceremony to mark the 50th anniversary of the Rural Development Administration.

   "But the proportion of agricultural and food products in (the country's) total exports still stands at a mere 1.4 percent. If we are to compete with advanced nations in the global market, we have to further improve the competitiveness of our agriculture."

   Lee said he understands concerns about negative effects the free trade agreement with the United States could have on the country's agricultural sector, but he believes the pact also represents an opportunity for the sector to leap forward.

   "The government will provide active policy support to further lift the competitiveness of our agricultural sector," he said.

Source: Argentine Beef Packers S.A.