Pain in the produce aislePrices for fresh vegetables are shocking these days. A bag of lettuce costs 4,000 won ($3.53), while white cabbage is going for 14,000 won a head. Restaurants are encouraging customers to pile more meat onto each lettuce leaf so they don’t order seconds, and housewives are encountering severe sticker shock at the corner market ahead of kimchi-making season.
Netizens mocked President Lee Myung-bak over his recent comment that he advised his cook to make kimchi out of regular cabbage rather than the white variety, as he appeared woefully out of touch given that the former still costs 10,000 won per head today.
The public is hyper-sensitive about fresh vegetable prices these days, and that could have a larger effect on the overall economy.
The nation’s fresh produce index shot up 45.5 percent in September over the same period last year, sending the broader consumer price index up 3.6 percent. With the inflation rate rising at such a pace, the central bank may have to move forward with a rate hike to dampen inflationary pressures.
The recent rise in vegetable prices is largely tied to poor crop yields resulting from an unusually cold spring and heavy, frequent rainfall during the summer. The prices of indispensable consumer products tend to turn volatile when the balance between supply and demand is disrupted, as it has been recently.
But several other factors have also sent prices for lettuce and white cabbage up a whopping 233 percent and 119 percent, respectively, over the year-ago period. Some retailers expecting price increases built up their supplies in advance, hoping to sell at a higher cost down the road - further disrupting the balance between supply and demand.
In response to increasing prices, the government allowed tariff-free imports of cabbage from China as part of an emergency measure to stabilize prices. But the government must learn from this fiasco and embark on an effort to review and realign its overall agriculture policies. Korea’s agriculture base, which consists mostly of rice and other grains, does not meet the needs of today, when there is growing demand for fresh vegetables.
Vegetable imports offer poor substitutes, as they can rot quickly and take up huge amounts of space when shipped. Officials should therefore encourage farmers to convert to producing vegetables. We also must fix the retail structure to ensure transparency in the entire process, from the point vegetables are picked until they reach the produce aisle. While we are wary of government intervention, officials should get involved in this matter to help both farmers and consumers at the same time.