Ministry of Agriculture, Food and Rural Affairs to Hold Public '1st Dairy Industry Development Committee Meeting' on the 26th
[Sejong=Asia Economy Reporter Moon Chaeseok]
"Most dairy companies cannot make a profit even when selling milk, so investment is impossible. Why should dairy companies buy raw milk that does not even sell?" (Lee Changbeom, President of the Korea Dairy Processing Association)
"Some home shopping channels are selling imported sterilized milk at 1,180 KRW per liter. The domestic raw milk price does not operate under market principles. Can the dairy farming and dairy processing industries really be sustainable?" (Jo Seonghyeong, Vice President of Maeil Dairies)
In an effort to control milk prices, the government announced it would actively intervene in the price determination process by forming an 'Industrial Development Committee.' However, at the first meeting, dissatisfaction with the government's decisions poured out mainly from private companies.
On the 26th, the Ministry of Agriculture, Food and Rural Affairs disclosed the contents of the first meeting of the Dairy Industry Development Committee held the previous afternoon. Of the 19 total committee members, 17 attended, including Park Youngbeom, Vice Minister of Agriculture, Food and Rural Affairs (Chairman), and Kim Injoong, Director of Food Industry Policy at the Ministry (Vice Chairman).
The government reflected that although consumption has increased, the competitiveness of domestic raw milk has continuously declined. It stated it would actively intervene in price determination and transaction system formation. After operating the Dairy Promotion Association without improvement, the government declared it would intervene directly.
Vice Minister Park said, "We discussed institutional improvements through the Promotion Association but failed to see results. To avoid repeating past mistakes, we will prepare government-led institutional improvement discussions and mid- to long-term industrial development plans accordingly."
Producers, represented by the Dairy and Livestock Association, and demand-side groups such as the Dairy Processing Association and dairy product companies, raised doubts about the effectiveness from the first day of the meeting.
Lee Seungho, President of the Dairy and Livestock Association (producer side), criticized, "The dairy system has traditionally been created through consensus among the government, producers, and demanders, but now the government has abandoned its role as a mediator and is not listening to the industry or experts. I question whether the committee is for industrial development or for hindrance."
Lee Changbeom (demand side) said, "Due to asymmetric systems, most dairy companies operate at a loss and cannot invest because they do not make profits even when selling milk. Why should dairy companies buy raw milk that does not sell?" Vice President Jo also said, "Instead of fighting internally, we need to cooperate to improve the system and secure international competitiveness to compete with foreign rivals."
Kim Seungeon, Executive Director of Namyang Dairy Products, said, "With low cost competitiveness, it is difficult to supply competitive products to consumers. Since even the shrinking white milk market could be replaced by foreign products, we need to prepare measures to increase self-sufficiency."
The Ministry of Agriculture, Food and Rural Affairs announced that it plans to continue discussions at the second committee meeting after organizing progress through future research projects and a working-level task force.
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