Dissemination of Distribution System of Coexistence between Producers and Consumers
A. Status
In the current agricultural goods distribution system, due to high proportion of going via wholesale markets (2017: 53.4%), the distribution distance is long and excessive distribution costs are incurred * Proportion of Consumer Price of Agricultural Goods (2017): 44.4% distribution costs, payment to farms 55.6%
In particular, due to high freight costs and price fluctuations, wholesale market cannot provide a stable destination for SME farmers * Large farms ship 46.5% of production volume to the wholesale market whereas medium farms ship 32% and small farms ship only 27.2% to the wholesale market (KREI, sample survey in Gyeonggi and Jeonnam, 2016)
Emergence of diverse local consumption system (local food) models in and out of Korea that provide stable sales channels to SME farms at reasonable prices and invigorate the local economy by creating jobs, etc.
US (Farmer's Market) and Japan (Local Production for Local Consumption) have built systems that connect producers and consumers so that SME farmers can sell via the local community * Japan: Set 30% usage goal of local food ingredients in school meal service in each prefacture (2012: 25%)
Jeonbuk Wanju introduced various culinary, processing and leisure functions to local food direct store to facilitate the local community and create jobs in the area * Monthly income of KRW 1.7 million is guaranteed to (2,526) participating farms that offer 659 local jobs
Regional agricultural goods supply and consumption system is expected to have high expandability since it can reduce distribution costs of SME farms and create jobs
Supplying local produce to meal services in public agencies and military troops in Naju Innovative City to create performance model through collaboration with the public sector
B. Implementation Plan
To phase in local distribution system (local food) where the local agricultural produce is consumed within the area from meal services and direct stores ※ Distribution Proportion of Local Food (Public Meal Service, Direct Stores, etc.): (2018p) 4.2% → (2019) 6% → (2022) 15%
Accomplish visible results such as improvement in income levels of SME farmers and new jobs through the leading model for meal services to public agencies (Naju) and military troops (Gwacheon and Pocheon) (first half of 2019)
(Public Agency) Increase destinations to all public agencies (14) in Naju Innovative City, and continuously expand items, volume and producing farms including processed food * (August 2018) 16 items supplied from 9 farms → (November 2018) 71 items from 47 farms → (2019) 150 items from 100 farms - In 2019, analyze the demand and expand participating farms to provide the basis for planned production of each item, and foster social enterprises to supply processed food
(Military Meal Service) Confirm local food expansion plan* and cooperate with agricultural technology center to select new possible items and systematize local farms especially SME farms * (Hwacheon) 2017: Local produce 31% → 2022: 76.7% (Pocheon) 2017: 33% → 2022: 70.8%
Empirically analyze the effectiveness of supplying local food by analyzing the increase in income levels and reduction in distribution costs, etc. (second half of 2019)
Expand the leading model to innovative cities (10 cities, public agencies) and borderlands (15 areas, military meal service)
(Secure Demand) Add 'local food purchasing performance' in the management evaluation index of public agencies, and reflect the local produce obligatory proportion in the military meal service related agreement (Ministry of National Defense & Nonghyup)
(Supply Basis) Inspect production status and logistics facilities of local produce and provide consulting
(Improve Policy) Abolish the Danjijang policy* that has continued from early stage of military supply to ensure the expansion of local food supply to military meal service (with cooperation of Ministry of National Defense) * An intermediary distribution system in charge of farm management and collection of supplied produce at fixed commissions (3 - 6%)
Nationwide dissemination of local food consumption system led by public meal service
(Administrative Support) Encourage enactment of an ordinance on public meal service support (2018: 8 → 2019:20), and run professional educational course to improve awareness of local government officials (first half of 2019) - Produce and distribute operating manuals about exemplary cases such as Wanju
(Build Infrastructure) Provide packaged supports such as facilities and operating programs (2019: 7 projects → 2020: 12) - Preferentially support local governments that prepared comprehensive plans to supply local agricultural produce
(Governance) Provide local government-led private-public governance system where representatives of producers and consumers take part to share and discuss on prices and supply volumes
Discover various excellent models for local food and direct trade in the private sector
Assist by holding excellent model case contest, provising business consulting and executing nationwide promotion
◇ (Case 1) Gwangsan-gu office in Gwangju provides breakfast service to apartment residents by collaborating with a social company (Working Mom Co., Ltd.)
◇ (Case 2) A consumer cooperative called 'Ggulbap' in Hwaseong-si takes orders and ships packs of local agricultural goods on the delivery date (Fribox)
Foster food related social economic organizations that systematize farms to timely supply sporadically produced local foods to consumers * Make improvements such as supporting storage and processing facilities so that social economic organizations are included in the project beneficiaries (2019)