The South Korean government has announced a plan to reduce price fluctuations in agricultural products by half by 2030 through the digitization of the distribution chain. The strategy seeks to shorten the steps from farm to consumer, aiming to secure fairer returns for producers and lower costs for buyers.
The core of the "Agricultural Product Distribution Structure Improvement Plan" is the online wholesale of agricultural products. Instead of concentrating flows through wholesale markets such as Gara Market, the plan connects farmers and consumers directly via online platforms.
Currently, distribution costs account for nearly half of consumer prices. In 2023, they represented 49.2% of total prices. Price instability has also been linked to abnormal weather. For example, apple production fell 30% last year due to cold damage and anthracnose, which led to a 62% rise in wholesale prices. A government spokesperson said, "We judged that improving distribution efficiency is essential as abnormal weather becomes routine."
The government aims to expand the online wholesale market, launched in November 2023, from US$730 million in transactions to US$5.1 billion by 2030. This would account for half of all wholesale distribution. Entry restrictions will be lifted to allow participation by small-scale farms, and vouchers will be offered to cover logistics and marketing. Transaction formats will diversify to include auctions and reverse auctions.
To support digital distribution, 300 smart agricultural product production area distribution centers (APCs) will be built. These will use AI to analyze production and logistics data and RFID tags to track product movement. By 2030, the government intends to cut daily price volatility for key crops such as napa cabbage and apples from 42% to 21% or less, reduce annual consumer price volatility from 20% to 10% or less, and lower distribution costs by 10%.
Reforms also target wholesale markets. Underperforming wholesale corporations may lose their licenses, with annual evaluations conducted by committees including producers and consumers. A shipment price guarantee system will ensure farmers receive at least the transport and packaging costs if auction prices fall sharply. Fee reduction pilots for wholesale corporations will begin at Gara Market in 2026.
Electronic shipping documents will become mandatory. Producers will need to submit shipment plans in advance, with full implementation at Gara Market scheduled for 2027.
Consumer-focused measures include a mobile app, set to launch next year, that will allow shoppers to check local price comparisons, such as "the cheapest napa cabbage today" or "whether now is a good time to buy apples." Local food stores will increase from 50 to 90 by 2030, and 10 new urban-rural cooperative markets will open annually.
Climate adaptation measures include real-time monitoring of crop conditions via drones and satellites, with coordinated treatment of nearby farms if pests or diseases are detected.
Source: The Chosun Daily