The Effects of Forage Policy on Feed Costs in Korea

Feeding operations are substantial on livestock farms, besides being potentially expensive. Feeding efficiency has been considered a major influence on profits in the livestock industry. Indeed, feed costs are shown to be the largest single item of production cost in Korea. To promote production and use of domestic forage, the Korean government has enforced the forage base expansion program that strengthens the competitiveness of the livestock industry by reducing the production cost. The forage base expansion program includes three main policies: subsidized forage production, support for processing and distribution, and expanding land for forage production. This paper investigates the influence of the government’s policies often conjectured to have pronounced effects on forage production. To evaluate the forage policies, this paper uses a path-analysis approach linking government spending on forage base expansion programs and feed costs. Results indicate that the Korean government’s spending on supporting domestic forage production results in a decrease in the ratio of forage expenses to total feed cost.