Korean Dairy Sector in Transition

The process of expansion of Korean dairy sector is reviewed in terms of the value of raw milk produced, supply and demand for dairy products, number of dairy farms and cows, herd sizes, ongoing change in the location of dairy farming, etc. Relevant government policies regarding pricing for raw milk and institutional changes are presented. With the market liberalization for dairy products in 1996, the sector faces a challenge. The strategy for `a stable growth of the industry` with strengthened quality competitiveness of drinking milk by the government faces a problem of balancing the supply and demand of raw milk, due to oversupply of raw milk in recent years and a continued declining demand for drinking milk. As a way of resolving the current oversupply problem of raw milk, some basic policy guidelines to follow are drawn.