[Feature] Korean Agricultural ODA ③ From Aid That Hands Over Machines to Aid That Keeps Them Running

Parts 1 and 2 of Korean Agricultural ODA examined agricultural machinery that stops running once projects end and a structure unable to explain its results. Looking back at the problem also reveals the direction of the solution: send the right machines, design together from the start, purchase with the life cycle in mind, and prepare in advance for what comes after the project ends. In this installment, we examine ways to improve Korean agricultural ODA by synthesizing the views of the sources interviewed in Parts 1 and 2 and of Song Yang-hoon, professor in the Department of Agricultural Economics at Chungbuk National University.
 

Start with machines suited to local soil

The lack of after-sales service is often cited as the reason Korean agricultural machinery stops in developing countries. But there is an earlier cause. When an ODA project specifies and orders the number of agricultural machines needed, companies usually send machines used domestically as they are. If engine horsepower, drive type, tire material, and vehicle width and height do not fit the local soil and cultivation methods, the machinery cannot last long even if an after-sales network exists.

Ahn Wook-hyun, director of the Export Agricultural Technology Division at the Rural Development Administration, said, “Among the cases described as after-sales service problems, many were situations where machines that were not suited to that country were sent in the first place, so they were bound to break down,” adding, “The technology level should actually be lowered, and the contents should be changed to fit that country’s environment.”

Where to send the machinery must also be selected carefully. Professor Song assessed that Korean agricultural machinery is “half suited and half unsuited” to conditions in developing countries. Large U.S. and European equipment is appropriate for big farms in Latin America cultivating hundreds of hectares, while Korea’s advanced tractors are “over-spec” for small African farmers who would struggle even to cover maintenance costs. Song proposed supplying small machines such as power tillers and threshers to low-income countries with mechanization rates below 10% through village-level rental systems. He added, “Small and medium-sized farms of 1 to 5 hectares in middle-income countries, where demand for mechanization is exploding, are the ‘sweet spot’ for Korean-style small and mid-sized agricultural machinery,” saying, “Only by first establishing localized research and development (R&D) centers there and modifying implements to suit local conditions can this lead to exports.”
 

At one table from the planning stage

Behind the failure to reflect localization in projects is a fragmented implementation system. Agricultural ODA is divided among the Ministry of Foreign Affairs and the Korea International Cooperation Agency (KOICA), the Ministry of Agriculture, Food and Rural Affairs and affiliated agencies such as the Korea Rural Community Corporation, the Rural Development Administration’s Korea Program on International Agriculture (KOPIA), the Export-Import Bank of Korea, the Ministry of the Interior and Safety, the Ministry of Trade, Industry and Energy, and local governments. Yet there is no public institution dedicated to agricultural machinery, so the Korea Agricultural Machinery Industry Cooperative plays that role instead. Because each institution conducts separate bidding, machinery types are mixed even within a single country, and the scale needed for local parts dealerships to take root is not created.

Professor Song pointed out, “When the place that buys the machinery, the place that teaches the technology, and the budget and personnel to repair it all operate separately, sunk costs arise as expensive agricultural machinery is left as scrap metal after only one or two years.”

In the field, this gap appears immediately. Lee Sang-gye, former director of the KOPIA Bolivia Center, said, “KOPIA, which focuses on technology dissemination, effectively has about 70 million won per project for purchasing agricultural machinery,” adding, “The budget runs out after buying just a few machines.” KOICA, which mainly carries out hardware projects, rarely has agricultural experts in its local offices, so identifying agricultural projects depends on the personal capacity of the office director. In projects involving multiple institutions, there are also criticisms that field managers lack decision-making authority. Jung Sang-hoon, former KOICA Senegal project manager (PM), explained, “Insufficient delegation of authority to the field is one of the representative criticisms Korean aid received in international peer reviews.”

The solution is to move up the timing of integration. Professor Song said, “Integration should take place not at the implementation stage, but at the planning stage, the very first button of a project,” adding, “It should be institutionalized so that KOICA, the agriculture ministry, the Rural Development Administration, and agricultural machinery specialist agencies form a joint planning team starting from the preliminary feasibility study stage.” He viewed the “Innovative Rural Community Project,” in which KOICA, the Rural Development Administration, and the Saemaul Undong Central Association participate together in project formation, as a potential good model.
 

Evaluate by total life cycle, not lowest price

The reality that low-cost agricultural machinery from third countries enters projects funded by the Korean budget has long been a complaint in the industry. But making Korean-made products a condition is not the answer. The Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) recommends that member countries reduce tied aid, which requires aid funds to be used only to buy products from donor countries, and Korea also promised to comply with the recommendation on untied aid for least developed countries when it joined the DAC in 2010. Professor Song also drew a clear line, saying that putting specifications tailored to a particular company into a bid document or dumping expensive equipment unsuited to local conditions is not aid but commerce.

The problem lies not in the norm but in the bidding method. Professor Song said, “The reason third-country machines win bids is not the untied norm, but a one-dimensional bid evaluation focused on the lowest delivery price,” adding, “At present, there is no way to sanction a company even if it supplies cheaply and then withdraws.” The alternative Song proposes is an evaluation that reflects the concept of total life-cycle cost (LCC). If the score weighting for equipment price is lowered and high scores are given to parts supply networks and after-sales service operation plans for the next five years, companies willing to remain in the local market for a long time can win fairly without designating Korean-made products.

What companies offer must also change. Former PM Jung produced maintenance manuals along with tractors in the Senegal project and led the establishment of a service center. He said, “With machinery alone, you cannot compete in international bidding,” adding, “You must sell value as a package that includes training, manuals, and operational capacity.”
 

Design in advance for after the project ends

Professor Song explained, “ODA projects usually end in three to five years, and under project guidelines and the National Finance Act, it is difficult to continue aftercare for local equipment with the Korean budget.” After the KOPIA Bolivia Center closed, it sent a list of frequently failing parts to Korea, but there was no budget to buy them. In Africa, it costs 20 million to 30 million won just to send a technician once to make repairs. A structure that supplies only a few units and then expects companies to provide after-sales service is impossible to maintain from the outset.

He diagnosed this as “poverty of planning” that uses the “limits of budget regulations” as an excuse and shield. If it was known that support would be cut off, a revenue-generating after-sales service model should have been embedded during the project period, such as operating paid repair centers or accumulating a parts fund with rental income. According to Professor Song, the Japan International Cooperation Agency (JICA) connects technical cooperation projects and volunteer dispatches when grant aid ends, allowing retired maintenance experts to stay locally and repair machines. It also trains local dealers and mechanics of its own country’s agricultural machinery companies with ODA funds.

Similar ideas are emerging in Korea. Professor Song proposed a structure in which ODA funds are used to build training and maintenance centers at hubs and train local mechanics on Korean agricultural machinery, after which companies participating through KOICA’s “Inclusive Business Solution” (IBS) program take charge of parts dealerships and paid repairs. There are also field proposals for small and medium-sized agricultural machinery companies to jointly establish local sales offices, operate demonstrations, promotions, and repairs for several years with government support, and then transfer them to a cooperative. Ultimately, the key is scale. Only when a certain number or more of the same models are gathered does enough revenue arise to maintain parts inventories and maintenance personnel, and from then on, after-sales service becomes a business, not aid.
 

Toward a structure where ODA and exports pull each other along

The Rural Development Administration is testing this direction in Bolivia. Based on the agricultural machinery left behind by the KOPIA Bolivia Center, it began a five-year localization project for tractor-mounted implements in 2026. LS Mtron is in charge of the tractors, while small and medium-sized companies handle the implements, which will be demonstrated in Bolivia for three years before expanding to Peru and elsewhere. This project is being carried out with an R&D budget, not an ODA budget, and uses only KOPIA’s local network. It is a design intended to lay the foundation for exports while preserving the purity of aid.

Director Ahn said, “Until now, it has been a fixed idea that ODA must go first,” adding, “If locally customized machines are developed in advance, they can be used immediately in later ODA projects or procurement projects by recipient-country governments.” It is a cycle in which exports take root where aid has ended, and that export base in turn helps the next aid project run well.

The yardstick for measuring performance must also change. As Kwon Taek-yoon, former director general of the RDA’s Technology Cooperation Bureau, pointed out in Part 2, how many agricultural machines were sent is not a result. Professor Song said, “The number of units supplied is administration, the operating rate is process, and the final outcome is farm household income,” adding, “We need to see whether the increased cultivated area and reduced labor costs from mechanization actually lead to income.” He emphasized, “The more the budget shrinks, the more we must reduce one-off donations of equipment and materials and focus on integrated projects that combine seeds, irrigation, mechanization, post-harvest management, and distribution in one region.”

Professor Song said, “The goal is that after ODA ends, farmers in recipient countries will, when buying machines with their own money, choose Korean-made products on their own because parts are easy to obtain and repairs are convenient,” adding, “This is not using aid for commerce, but allowing legitimate business to sprout on the soil created by aid.”