Economic analysis of agriculture support programs related to Korea-Chile FTA
2023
Moon, Hanpil
In this study we conduct an ex post economic assessment of domestic measures related to Korea-Chile FTA as seven years have passed since the free trade agreement was in effect in 2004. The production-increase and cost-reduction effects are evaluated by constructing a regional and periodical panel model using the investment and financial results of the domestic FTA measures for the fruit industry. In addition, the effects of the investment and financial support programs on the farmers' selling prices of fruits are estimated using inverse demand functions. We calculate the effects of the quality improvements as well as the products diversification on the increasing added values. According to our empirical results, the investment and financial support for the domestic fruit industry against Korea-Chile FTA is shown to have partly contributed to increases in production, reductions of production costs, increases in added values of final products, and reductions of distribution costs.
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