In a study of agricultural cooperative RPCs(rice-processing complexes)in the Gimjae region of South Korea, we performed an analysis focusing on the issues of profit and distribution in sales to agricultural co-operative vendors, because these issues have a major influence on RPC management.
We found that many agricultural co-operative RPCs, including those in the Gimjae region, depend on sales to agricultural co-operative vendors, that there is fierce competition among RPCs, and that it is not easy for individual RPCs to sell as much as they wish.
Furthermore, in these transactions with agricultural co-operative vendors, RPCs in rice production areas suffer losses. On the other hand, wholesale(agricultural co-operative grain centers)and retail vendors(Hanaro Mart)always make a sales profit. Sales profits therefore favor wholesale and retail and are unfavorable to RPCs in the production areas.
Furthermore, agricultural co-operative in production areas, and their RPCs, focus on sales to agricultural co-operative vendors, and it is difficult for RPCs to make sales at the prices they want. This leads to a situation where it is easy for extreme price-slashing to occur. Responding to this will surely be an important issue from now on.