Agriculture can become an export industry if it grows with capital

3–4% of the agricultural population uses 20% of the national land

To achieve food self-sufficiency, smart farms must be allowed

If agriculture escapes its premodern nature, agricultural exports and globally recognized food brands are possible

There was a time when 80% of the population worked in agriculture. People had lived by gathering and eating wild fruits, but once they began farming and living in settled communities, the population increased explosively.

Water control was extremely important in agriculture, so farming was mainly done near rivers. People viewed the world from the perspective of “how many people are capable of managing water.” As better water management increased agricultural output and population grew, the state system began to emerge, and agricultural production became even more important. Naturally, more effort was devoted to water control, and managing water played a capitalist role.

When agriculture was important, society depended largely not on capital but on land. Countries with abundant land and farmers with large tracts of land were highly important. As reclaimed land was turned into farmland suitable for cultivation, land came to play the role of capital. No matter how vast they may be, deserts or the Amazon are not capital. Land became capital only after labor was投入ed to transform it into a structure suitable for farming.

As the Industrial Revolution unfolded, agriculture gradually declined in importance. With the development of manufacturing, commerce, and services, people came to work year-round without an off-season. Unlike in the era of primary industry, when income rose during harvest season, productivity increased explosively throughout the year after the Industrial Revolution. In this process, capital came to play an important role.

At present, only 3–4% of our country’s population is engaged in agriculture. The share of value added created by agricultural products is even lower. In fact, agriculture’s total value added is less than the value added of a decent-sized mid-sized business group. Yet agriculture uses about 20% of the country’s land. From the standpoint of making good use of limited resources, this is extremely inefficient.

Food self-sufficiency is often advocated in the name of food security, but most of what we eat is imported agricultural produce. This is a very natural phenomenon. There is little real difference between buying and selling goods between Chungcheong and Gangwon and importing agricultural products from China and Australia.

People say food self-sufficiency is essential in preparation for disasters or war, but looking back over the past 100 to 200 years, this is an unnecessary concern. Famine in Africa or North Korea has occurred because those are poor or closed countries. In normal countries, even when war breaks out, civilians do not end up unable to eat. Calling for self-sufficiency in the name of food security is something that applied in primitive communal societies. In modern civilizational history, such things do not happen even in wartime.

If food self-sufficiency is to be realized, smart farms must be allowed. If crops are grown through smart farming, there is no need to worry about the climate. Since rice is already in oversupply, it would be economically viable to convert some of the land formerly used for paddy farming into smart farms for growing vegetables.

A smart farm is simply an industry. Farmers or companies can operate it. But it is difficult to change land use, and capital cannot be invested in agriculture, which is deeply regrettable. If agricultural products are produced in smart farms, self-sufficiency is possible and exports are possible as well, but regulations are blocking the way.

Although the agricultural sector still occupies vast land and remains unmoved despite its many harmful effects, it will inevitably face change within 20 years. The average age of those currently engaged in agriculture is in the late 60s, and cultivated land is shrinking because there is no one to take over the farms.

Tying up land and preventing other resources from entering is also a kind of compulsory quota system. If land is converted to smart farms or solar power generation, there should be flexibility to allow agricultural land to be converted into industrial land.

The system under which only those who farm may own farmland should also be abolished. Since rice is in oversupply, it is only proper to reduce farmland. Regulations should be eased so that land can be freely bought and sold and large tracts can be acquired for competition. If corporate farming is to be pursued, companies or cooperatives must be allowed to own land. If multiple people jointly own land or operate it in the form of a cooperative, economies of scale can be realized. Cultivating large tracts of land makes capital investment and mechanization possible.

People say large-scale farming is impossible because the country is small, but if individually fragmented plots are combined, it is entirely possible. We must also abandon the idea that if outsiders own land, farmers will be reduced to tenant farmers. People living in cities generally work for companies and receive wages. What matters is creating a structure in which productivity is raised through large-scale farming and farm household income is generated.

Agriculture must grow together with capital and develop into an export industry. It is far more advantageous for 100 people to unite and corporatize than for 100 households to each farm separately. Going further, it is much more advantageous to establish smart farms and engage in factory-style farming.

There is an outcry that climate change is making farming difficult. Smart farms can produce high-quality agricultural products regardless of drought, flooding, or sunlight levels. The Netherlands overtook Spain to become the No. 1 exporter of tomatoes. The secret lies in smart farms. Spain, with its blazing sun and favorable natural environment, fell behind Dutch smart farms.

Agriculture must quickly escape its premodern nature. We should become a country that exports agricultural products, like Harim chicken, New Zealand’s Zespri kiwifruit, and Dutch tomatoes. Beyond that, I hope globally recognized food brands will emerge. Nestlé, a global food company, is the largest Swiss listed company by market capitalization and generates annual sales of 100 trillion won. Agricultural exports and globally recognized food brands are by no means a dream.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: 농업, 자본과 함께 성장하면 수출산업으로 발전 가능하다

Author: Sung-no Choi

Date: 2024-04-23

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=2&idx=26572