Ministry tackles overly complicated distribution

The vice minister of Agriculture, Food and Rural Affairs said the key goal of the ministry is to create a distribution structure through which consumers pay less and producers receive more.

Yeo In-hong, the newly appointed vice minister, exchanged views with retail industry reporters on the government measures for restructuring the distribution process while ensuring a stable supply during a press meeting at the Korea Agro-Fisheries & Food Trade Corporation in Yangjae-dong, southern Seoul, yesterday.

The ministry wants to create a win-win structure for both producers and consumers by reducing the level of distribution based on Nonghyup, the National Agricultural Cooperative Federation.

“The key challenge is to improve the distribution structure,” Yeo said.

“We aim to cut unnecessary wholesale processes. While the former government focused on managing the food price indexes by individual food item, the new government will be striving to establish a management system that will enable communication between producers and consumers.”

President Park Geun-hye has emphasized restructuring the distribution of agricultural and livestock products saying that due to its current complications, distribution costs account for 70 percent of retail prices of vegetables and 50 percent of the prices of fruits. She made the comments while visiting the retail store of Nonghyup Hanaro Club in Yangjae-dong on March 13.

“Our goal is to create a distribution structure that allows producers to take 5 percent higher profits while consumers enjoy 10 percent cheaper prices,” Yeo said. “Currently, there are multiple distribution channels, and we intend to bring them into competition with each other,”

The Agriculture and Food Ministry said it will slash costs by systemizing the distribution steps from farmers, or producers, to consumers.

Through cooperation with Nonghyup, the ministry decided to foster a direct shipment organization from farmhouses. The number of organizations will be increased from 1,600 last year to 2,200 by the end of 2016.

This means that more farmers will be able to sell radish and Napa cabbage to Nonghyup after harvest.

Nonghyup’s role is expanding for the distribution of livestock products. The government plan is to nurture a national cooperative meatpacker.

The ministry said it will allow regional livestock associations to collect and supply beef and pork while making Nonghyup responsible for slaughtering, processing and distributing.

By Kim Jung-yoon [kjy@joongang.co.kr]