Online Wholesale Market Share to Reach 50% by 2030... Developing an App to Find the Lowest Price Agricultural Products

[Financial News] The government has announced an 'Agricultural Product Distribution Structure Improvement Plan' that includes expanding the share of online wholesale markets to 50% of total agricultural wholesale transactions by 2030. The goal is to manage the volatility of consumer prices for agricultural products, which currently fluctuate around 20%, to below 10% by 2030. When local supermarkets purchase agricultural products directly from farms online, it can reduce intermediate distribution costs, effectively preventing price surges. For consumers, a nationwide mobile app (App) providing agricultural product price information by sales outlet will be developed and distributed by next year.
 The Ministry of Agriculture, Food and Rural Affairs and others announced this improvement plan at the Economic Ministers' Meeting on the 15th to supplement the wholesale market auction system, which is cited as a major cause of agricultural price instability. Due to recent supply instability caused by abnormal weather, agricultural prices have been fluctuating sharply, prompting a shift to an online-focused transaction structure to reduce distribution costs and enhance price stability.
 The government's core goals are △ reducing the volatility of wholesale and retail prices for key items like cabbage and apples by half △ reducing daily auction price volatility from an average of 42% over the past 5 years to below 21% by 2030, and reducing consumer price volatility from an average of 20% over the same period to below 10%. Additionally, △ a 10% reduction in agricultural distribution costs △ expanding the scale of online wholesale market transactions from 1 trillion won this year to 7 trillion won by 2030 are also being pursued.
 Currently, agricultural distribution follows a 4-step structure of 'farmer/producer distributor→wholesale market (corporation)→intermediate wholesaler→retailer', but in the online wholesale market, products can be sent directly from the production site to the buyer or bypass intermediate steps. The Ministry of Agriculture plans to halve the existing distribution steps through this, thereby reducing costs.
 Furthermore, to lower the entry barrier for participating in the online wholesale market, the seller registration requirements will also be relaxed. Previously, only individual or corporate businesses with an annual transaction volume of over 2 billion won were eligible, but now there will be no size restrictions. Even small supermarkets will be able to receive agricultural products directly through online transactions. Along with this, a customized voucher system will be implemented, allowing sellers and buyers to choose logistics or promotional support programs.
 The government will revise the evaluation system for wholesale corporations to eliminate underperforming companies and introduce a competitive system that allows for the designation of new corporations. To this end, a legal amendment mandating the cancellation of wholesale corporation designations is also being pursued. Until now, there have been no cases of designation cancellation even if a poor performance grade was received in evaluations. In the future, a basis will be established for wholesale corporations to create public funds, and a 'Shipment Price Compensation System (tentative name)' will also be newly established to compensate farm income in the event of a sharp price drop.
 A nationwide mobile app that allows consumers to compare seasonal agricultural products and prices by sales outlet will also be launched next year. The app will initially provide location-based store-specific price information and a seasonal agricultural product consumption guide, with further advancements using artificial intelligence (AI) planned.
 A 'Comprehensive Agricultural Product Information Support Platform' encompassing producers, consumers, and distributors is also planned to be established by 2028. Through this, comprehensive production, distribution, and price information will be provided to assist in rational decision-making.
junjun@fnnews.com Choi Yong-jun Reporter