TOOLS TO RETAIN ADDED VALUE IN DAIRY FARMS: THE SOUTH KOREA CASE

Abstract

South Korea witnessed an increase in the average size of dairy farms over the past decade, probably because of high production costs especially relevant for farms with less than 40 heads. Korean dairy farms have production costs that are 63.9% higher than the international milk price, and the producer support by the Korean government is 2.5 times higher than the average of the Organization for Economic Co-operation and Development countries. Considering a possible reduction of public support, and the increasing market openings, one of the objectives for farmers would be to try retaining on farm a higher added value for their dairy products such as cheese and fermented milk. Out of this perspective, and on the basis of a questionnaire that involved the great part of the farmers that produce cheese, this paper describes three possible tools for the valorization of dairy products: short supply chains and direct marketing, dedicated supply chains with certification and labels and the approach values based supply chains.