2024-05-01 17:58:56
Announcement of a plan to improve the distribution structure of agricultural and marine products
Target 5 trillion won online wholesale market by 2027. Reduce distribution costs by 10% by lowering the market threshold and inducing competition among businesses for fees and services.
Behind the succession of agricultural products bearing the “gold” prefix, including “golden apples”, lies an outdated distribution structure. To correct this, the government decided to exclude underperforming wholesale companies from the market and promote fair competition among wholesale companies to reduce distribution costs, which account for almost half of consumer prices. , by more than 10%.
On the 1st, the Ministry of Agriculture, Food and Rural Affairs jointly announced the “Measure to Improve the Distribution Structure of Agricultural and Fishery Products” with the following content.
The key to the strategy presented by the government is ▲ improving the public nature and efficiency of the public wholesale market ▲ revitalizing the online wholesale market ▲ increasing the scale and efficiency of distribution on production sites ▲ improving the distribution environment at places of consumption. The aim is to reduce distribution costs by more than 10%, which currently stand at 49.7% of the price of agricultural and marine products, and to expand the transaction volume of the online wholesale market to 5 trillion won by 2027.
The government has decided to expand competition among wholesale companies in public wholesale markets such as the Garak market. Most agricultural and marine products shipped from production areas are sold to consumers in retail markets through middlemen and wholesalers in auctions conducted by wholesale companies in wholesale markets public. About half of all fruits and vegetables go to public wholesale markets, but a few wholesale companies take over the entire auction and make excessive margins.
The government has decided to evaluate the performance of existing wholesale companies after the expiration of the 5-10 year designation period, decide whether to redesignate them and select new companies through a public offer. The “Agricultural and Fishery Products Distribution and Price Stabilization Law” (Agricultural Security Law) will be revised to require companies with poor performance to cancel their designation even during the designation period. Even today, a company’s designation can be canceled arbitrarily, but only six companies have been deregistered since the law was enacted in 1976.
It was decided to encourage competition in fees and services by removing restrictions on transaction elements for certain companies in the Garak market. Currently, in the Garak market, new entrants trade only 4% (8 items) of the total 193 items traded. Existing businesses are therefore very territorial and barriers to entry are high. The situation in other wholesale public markets is not much different.
The government is also considering revising the auction commission system for wholesale companies, which is currently around 4-7%. If competition among wholesale companies is encouraged, farmers and consumers can benefit by increasing their investments in delivery regions and reducing commissions to attract contracts. The online wholesale marketplace, launched in November last year, will increase the number of agricultural products traded from 121 this year to 193 by 2027, and will also start trading seafood products in the second half of the year. The government announced that it would increase the number of smart agricultural product distribution centers (APCs) to 100 by 2026 and increase the proportion of APCs processing fruits and vegetables from 30% to 50% of production.
Kwak So-young, journalist in Sejong
1714599671
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