Modernization in Rural Korea. The Case of Cooperative Farming in South Korea 1984

Evaluation Report of the ASA Project

Academic Paper, 1984

43 Pages


Table of Content

1. The role of agriculture in export-oriented industrialization

2. Agricultural Constitution

3. Agricultural Structure
3.1. Labor force in the agricultural sector
3.2. Planting Structure
3.3. Livestock

4. Budgetary balance of agricultural holdings

5. Agricultural prices and agricultural price policy

6. Debt and migration

7. The "New Village Movement"

8. Credit cooperatives

9. Pulmuwon - a country cooperative

10. Kuokmal - a country cooperative


Preliminary remarks

This work is the result of the ASA project "Land Cooperatives in South Korea", which I conducted from December 1984 to February 1985. Mr. Klaus Gihr was already in the summer of 1984 in the same project in South Korea. For professional reasons, I was only able to leave in December. Perhaps the fact that we worked separately and at unequal time on the same project, makes the comparison of the evaluation reports particularly interesting for the interested reader.

At the first review of the table of contents, the reader will notice that the actual topic of "land cooperatives" is somewhat neglected, whereas the present situation of the agricultural sector is described in detail under several aspects.

There are several reasons for this. First of all, there are not many land cooperatives in South Korea (estimated at 5-6). On the other hand, the climatic conditions often made it impossible to reach existing cooperatives in the hinterland - both heavy snowfall and sudden thawing made the roads impassable to the cooperative. And if there were no English speaking people, I was not visiting the cooperative since my Korean language skills are quite meager.

Although I was only able to visit two land co-operatives, I got an idea of the benefits to farmers of sharing the machines and ordering the fields together.

In the cooperative "Kuokmal" I was able to experience the complexity of the tasks the cooperative has set itself. The stated goal of improving living conditions, in addition to the common effort to overcome material needs, also requires social and cultural services that can be provided within the community. Kuokmal does not provide these services on its own, but receives financial support from foreign development services.

The rural cooperative "Pulmuwon", on the other hand, has achieved remarkable successes without the help of third parties. Organic farming is also practiced there.

The presentation of the credit cooperatives has been given a chapter of its own. In addition to a brief historical outline of the savings rings, their significance in terms of social development in rural areas is presented.

The government's own Rural Development Campaign is presented critically in the chapter "New Village Movement." Because the factors that led to the unfavorable overall impression were not systematically weighted, I find my verdict on this campaign quite worthy of discussion.

The direction of government policy is of crucial importance for the future development of farms and cooperatives. The forecasts and targets for the year 2000, which were propagated by the Government at the turn of the year with propaganda effort, promise an uncertain future for small farm holders.

According to the government, small farmers are expected to disappear from the agricultural sector in the near future and agricultural production will be taken over by modern large-scale enterprises.

The role of agricultural policy is further explained in the chapter on agricultural prices.

Many thanks to all who helped me in South Korea!

List of pictures

Picture 1: Hanu cattle .

Picture 2: Traditional farm house

Picture 3: Traditional fisherman's house

Picture 4: Single-axle tractor

Picture 5: Kuokmal

1. The role of agriculture in export-oriented industrialization

Indisputable are the industrialization successes of South Korea. The Economic Planning Board (EPB) provides aggregate economic data, which is unquestionably impressive: South Korea's per capita income, for example, has increased twenty-fold over twenty years, and in 1965 the per capita income of the population was straight 105 US$; in 1984 it was around US$ 2,000 (1)[1].This impressive growth rate of national wealth has undergone a major change in the structure of the economy, turning agricultural land into an important industrialized country within twenty years Whereas in 1965 half of the working population was employed in agriculture, today less than a quarter work in the agricultural sector.

The capitalist development of the country has created two major areas of conflict that shape domestic political disputes. These are the classic contradiction between wage labor and capital and for another the contrast of city and country.

The South Korean industrialization type is characterized by the predominant production of labor-intensive goods for the world market. Economic policy aims to win shares in the world market for developed, developed countries through the supply of cheap, technologically advanced products. The associated compulsion to produce with low labor costs brings the downside South Korean development: the overwhelming part of the wage labor force had to work for many years under inhumane conditions for lowest wages.

Even today, South Korea has the highest working hours in the world and as a result, the highest number of accidents at work.

Although wages have risen in recent years, they are at a very low level compared to those of industrialized countries. Moreover, wage increases have not been the same for all, but a segmentation of the workforce has occurred. Primary workers of large companies earn many times more than workers in small businesses and workers without employment contracts. With regard to gender, a sharp separation in the remuneration of the working body can also be drawn. Female workers earn less than half the men's salary for the same job.

In addition to the increasing privilege of certain sections of the industrial workforce, South Korea's current development is also marked by an increased unequal distribution of riches between town and country. In the course of South Korea's industrialization efforts, income disparities between farm households and other households have increased significantly. The economic development of South Korea has thus been unequally pronounced in relation to the economic sectors. The main focus of development was on the processing industry while neglecting agriculture.

The annual average growth rates of the secondary sector compared to those of the primary sector make the uneven development clear. In the period from 1962 to 1980, the annual average growth rates were in 15.9% of the manufacturing industry, while the growth rate of the agricultural sector was only 2.4%. Accordingly, the contributions of the primary sector to the gross national product have become progressively smaller over the years. In 1965, the contribution from the agricultural sector was still 38%, in1983 it dropped back to 14%. Also, the structural change of the employees according to branches of industry can be seen: In 1964, 62% of the employees in South Korea worked in agriculture, whereas in 1983 only 29.7% worked.

On the other hand, workers in the manufacturing industry have increased significantly. In 1964, 8.8% of employed persons found employment in the manufacturing sector, compared with 23.3% of all employed persons in 1983. In absolute terms, the increase in the workforce in the secondary sector is even more powerful: in 1964, 690 thousand people were employed in the manufacturing sector, compared to 3.383 million in 1983.

South Korea's economic policy is enshrined in five-year plans, which are drafted by the government and relevant stakeholder groups on the Economic Planning Board. Specifically, five-year plans cannot be discussed here in order to make an assessment of the government's agricultural policy. In general, the five-year plans show that agricultural development has received much less importance in the overall economic development strategy than in the manufacturing and service industries. Rural development was given little importance in the first three five-year plans (FJP). In the FJP, the construction of the import-substituting industry was at the forefront of South Korean economic policy. In the second and third FJPs, the accelerated development of the export-oriented economic sector was at the heart of South Korean economic policy. Although the government emphasized in the 2nd FJP the need for substantial improvements, the socio-economic situation in rural areas only provided little financial resources for modernization measures in rural areas, compared to capital aid for industrial development.

Already in the 1st FJP (1962-66) there was the target to increase production by means of modern inputs (new cultivation methods, artificial fertilizers and pesticides). The successes were modest overall. Only the middle peasants, who had equity capital or were creditworthy, were able to achieve production increases in this way.

In the 2nd FJP (1967-71) a comprehensive land consolidation was tackled. Even so, no significant improvements could be achieved in the agricultural sector. The annual growth rate during this period was only 2.5%. All attempts to alleviate rural poverty ultimately failed because of the tight financial resources of the government and the too high personal contributions that the farmers should raise.

In the 3rd FJP (1970 -1975) and the 4th FJP (1975-1980) it was necessary to increase agricultural productivity. The introduction of high-yielding varieties and the associated use of artificial fertilizers and pesticides played the central role. The measures to increase productivity were accompanied by the “Saemaul Undong Movement”, which consisted mainly of material and credit offerings to farmers to enable them to independently carry out necessary infrastructure work. Critically questioning the achievements of the Saemaul Undong movement is a subject of the ASA project. The results are incorporated in this evaluation report.

2. Agricultural Constitution

Before discussing the socioeconomic structure of agricultural households, it is necessary to present the agricultural constitution of South Korea, as it is the ownership structure on soil in South Korea that was changes by various state regulations since the Korean War. Even before the colonial period (1910-1945), Korean agriculture was characterized by tenancy and concentration of land. During the Japanese colonial rule land concentration was increased and the levies to the owners often amounted to more than half of the harvest.

In the thirties, about 3% of the rural population had over 65% of the land. In addition to the lease, levies for water and other means of production had to be levied. The vast majority of the rural population suffered from hunger months before the new harvest. The nutritional situation and the health of the farmers were generally poor. The rice as a means of payment was too precious to eat it yourself. Rice was replaced by barley and other cereals.

It was only on big holidays, since the cattle and the pig breeding were unknown and therefore the offer on meat was low. The need was so great that the peasants rebelled (Samil Movement, 1919).

The landlords were abolished after decolonization by a land reform initiated by the American occupiers. While in 1945 about 20,000 farmers had more than half of the agricultural area and 72% of the farmers could call their property less than 11% of the acreage, in 1955 only 6,000 farmers had more as 3 ha of land. The distribution of land (1949) led to a significant increase in the proportion of dwarf farms (farm households with less than half a hectare of land), while the proportion of holdings over 3 hectares fell from 46,000 to 6,000.

Although the land redistribution law set the maximum limit of 3 hectares, there was already 1955 6,000 companies whose area exceeded the maximum limit. This contradiction, as shown in the official statistics, confirms the assumption that land distribution was not carried out with the intended severity. The practice of circumventing land abandonment was that the land records were forged for their own benefit, or that portions of the property belonged to family members and relatives have been overwritten. In this context it is also important which country was redistributed. Fertile soil was largely preserved for the landlord.

The land released for redistribution was sold to former tenants. The prices were very high and drove the small farmers from the beginning in the debt. The usual lease of about 50% of the harvest was fixed by the purchase price of 30 to 40% of the crop for a period of five years. The big farmers, who gave land to the government, got shares through the nationalized industrial plants, thus gaining access to industrial capital.

Land reform has produced three peculiarities that characterize South Korean agriculture up to the present day: first, Korean agriculture is characterized by the parceling of the soil, i. the proportion of dwarf farms is very big. Secondly, the role of landowners is marginal and so is the number of farm workers very low. Third, the landlords have become modern capitalists and no longer determine the political interests of persons employed in agriculture.

In the 1980s, the issue of unequal land distribution has once again entered the public debate. Exact data on the extent of tenure is not available. It is estimated that about 55% of farm households own the agricultural land they are cultivating. 45% are tenants and part tenant.

Since 1970, the leased land has increased overall. The share of leased land in agricultural land was less than 14% in 1975 and climbed to 26.8% in 1983 (2). The areas around the big cities and along the highways are in large part owned by so-called "absentee landlords", who acquired the land for the purpose of speculation and less for the achievement of a high land rent. It is estimated that over 60% of the owners of more than two hectares of land are urban capitalists. The exodus of many former peasants to the cities has also led to increased leasing of the land. Often the farmers, who want to find a job in the modern economy sector in the city, are leasing their land for the purpose of reinsurance, if the expectations they associate with the city are not fulfilled.

The parceling of the soil is an obstacle to mechanization. In order to use modern rice planting and harvesting machines, the areas are too small. The Government of South Korea therefore has the intention to increase the size of the farming land of the farmers to create the condition for mechanization and the modernization of agriculture.

On 31.9.1981 a law came into force, which allowed the land ownership of areas with more than 3 hectares again and thus accelerated the expansion of the tenancy. The law was justified as follows: "... Existing land laws, formulated over 30 years ago for the purpose of minimizing tenant farming and reducing the size of land holdings in populated rural areas, should be reformed in order to facilitate the modernization The ability to rent farm land, currently prohibited, should be restored. (3) Today, there are companies in the South Korean food industry (agrobusiness), which have huge fields and livestock. Thus, the food supplier "Samjang" (known by Instant soups and others) has about 2,000 hectares of land, 3,000 cattle, 2,000 dairy cows, 10,000 chickens and 5,000 pigs (according to a conversation partner).

3. Agricultural Structure

As already mentioned, the South Korean agriculture is characterized by the parceling of the soil. The average land use area in 1983 was 1.08 hectares (for comparison: Japan 1.15 ha and USA 1.60 ha). Over 60% of agricultural holdings farm less than one hectare of land. In total, about 2,180,000 ha of land are used of which 1,300,000 ha as irrigated land and 851,000 hectares unirrigated. Thus in 1983 about 65% were wet fields, whereas in 1965 they were only 51%. However, land use has the land economy since 1965 annual average of 8,000 to 10,000 hectares were taken in favor of the industrial and colonized countries. With the decrease of the cultivated land also the peasant households decreased. In 1970, 14.4 million people still lived in 2.48 million farm households (5.81 persons on average), compared to 2 million in 1983. Households and 9.6 million people (4.8 persons on average). The decrease in land use is therefore lower than the decline in households resp. the persons who live from agriculture.

The examination of farm households according to farm size for 1965 and 1983 reveals two major manifestations of structural change in South Korean agriculture. On the one hand, the percentage of micro-enterprises (under 0.5 ha) has fallen by about eight percentage points between 1965 and 1983, in absolute terms: in 1965 there were still 901,000 households with less than half a hectare of land employed in agriculture, there were just 571,000 farm households in 1983. Although the average households of 0.5 ha to 2 ha have also declined, the reduction of less than 200,000 means that they still account for the largest part of the rural households. In 1965, 57.4% of all farmers had households over 0.5 ha and less than 2 hectares, 1983 were it is 63.6%. By contrast, the farmer households have more than 2 ha decreased by approx. 60,000. In 1965, 169,000 farm households owned more than two hectares of land, in 1983 there were 107,000. The two movements - the decrease of small farms and the decrease of large farms - produced a company structure with high homogeneity. A polarization of farm households with regard to the agricultural land cannot be determined.

3.1. Labor force in the agricultural sector

In view of the dominance of peasant small businesses, it is not surprising that agricultural work can be carried out almost exclusively without wage laborers. The vast majority of farm households can completely dispense with wage laborers and do the work independently. Only in times of hard work are people looking for work outside families. For example, around 635,000 people from foreign households were employed in June during the rice transplantation period. In October at harvest time there are 610,000 people. Wage workers who do not belong to the peasant family account for just under 12% of all labor even during peak hours. Conversely, in the low labor-cost months, only half of the farmer's households are employed: approximately 845,000 people work outside agriculture during the winter months.

These statistics show that underemployment in the rural sector is not a problem throughout the year. Even at peak working hours, family members of rural households are not enough to do the work. In addition, agricultural workers must be employed.

The shortage of labor is also evident in the employment structure by age and gender. In 1965, the proportion of women working in agriculture was 39%. In 1975, the proportion rose to 42.8% and in 1983 it has already reached 43%. As women increase as a work force, the proportion of people over 50 years of age is becoming ever more important. In 1965, 18.6% of all employees were over 50 years old, in 1975 it was 26.7% and in 1983 it was 35.5%.

The above-average proportion of women working in agriculture and older people also means that young workers are no longer available and employed outside agriculture.

3.2. Planting Structure

Due to the small plots available to most farmers for development, the predominant operational goal is food self-sufficiency. About two-thirds of farm households can be termed subsistence or semi-subsistence farms. This also results in the cultivation structure. The largest part of the cultivated area is destined for the food rice and other cereals, predominantly barley. A total of 72% of the area under cultivation was for the main cereals in 1983 and 6% for rice. In contrast, this part of land use in 1965 was still over 90%. This means that there was a diversification of agricultural products. On the one hand, the cultivation of main cereals in favor of vegetables, fruits and special cereals is steadily decreasing. On the other hand, the meaning decreases of rice within the cultivated staple foods to the detriment of barley and wheat.

The focus on rice can be explained by the government's "high-price" policy. The yield of rice has been increased considerably by the introduction of high-yielding hybrid varieties, the use of chemical fertilizers and pesticides as well as the improvement of irrigation systems Hectares 2890 kg; 1983 4420 kg and 1984 4630 kg. The record crop of 1984 made South Korea self-sufficient with rice. The yield quota was even higher than that of the Japanese, who are known for intensive land use.

In addition to the grain, the vegetables play a significant role in the dietary habits of the Koreans. Kimchi, which is served with a mix of chopped cabbage and radish, fermented with capsicum and garlic, at each meal, requires the cultivation of ingredients throughout the year. As purchasing power has increased with the country's economic development, eating habits have also changed in favor of fine vegetables and meats. Today, cucumbers, tomatoes and salads are grown as well as fruits such as apples, mandarins and pineapples. However, the climatic conditions in South Korea are not suitable everywhere to cultivate "tropical fruits" throughout the year. So the cultivation of pineapple and mandarins remains on the island and is limited to the island of Cheju-Do.

In this context, the cultivation in so-called vinyl houses plays an important role. Wherever the climate would not permit the cultivation of vegetables that need plenty of sun and do not tolerate cold nights, there are now vinyl houses. They are about 1.40 meters high and consist of metal arches that are covered with vinyl foil. The film cost 2,000 won each in early 1985 - 20 mm roll (width: 90 cm). That's about 4 DM for the roll and 22 pennies per m2. A glasshouse in the Federal Republic costs in comparison to 400 DM per m2. This vinyl tunnel are used for winter early-morning cultivation (tomatoes, cucumbers).

Since during the very cold winter months (in January 1985 to minus 25 C cold) the sun shines almost all day long, changing the radiation effect with the vinyl film on the floor creates enough heat to grow the early vegetables. In addition, soil heat is generated by the incorporation of compost from wet straw and rice fur, which releases heat during bacterial degradation.

The markets for vegetables are particularly large in the cities, where they lack the opportunity to preserve the vegetables in fermented-fermenting barrels and thus buy the inhabitants of the city fresh vegetables. Most vinyl tunnels and vinyl houses are therefore also located near the big cities. But even along the highways and railways, growing in vinyl houses is becoming increasingly popular, as the transport routes to the potential buyers are favorable.

Similar to vegetable cultivation, the cultivation of high-quality fruit, apples, pears, peaches, grapes and Cheju-Do mandarins has become more important in recent years. In 1965, the acreage for fruit was just 1%. 1983 were already 4% of the total area for fruit growing. The climb In terms of vegetable production, a similar degree is assumed: in 1965, vegetables accounted for 4 % of the total area already grown to 12% in 1983.

3.3. Livestock

In addition to the diversification of agricultural crops, the increasing importance of livestock farming and livestock by-products of South Korean agriculture are giving a new lease of life. In 1965, just 7,000 dairy cows and 1,314,000 cattle were counted in South Korea. In 1983 there were already 274,800 dairy cows and nearly 2 million cattle. In earlier times, livestock farming played no role in Korean agriculture.


[1] All statistical information has been extracted from various publications of the EPB; only if the data does not come from EPB, the sources are mentioned in the text.

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Modernization in Rural Korea. The Case of Cooperative Farming in South Korea 1984
Evaluation Report of the ASA Project
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Kurt Lehberger (Author), 1984, Modernization in Rural Korea. The Case of Cooperative Farming in South Korea 1984, Munich, GRIN Verlag,


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