Mandatory Blind Auctions for Agricultural Products... Introduction of Ombudsman for Dispute Resolution

Ministry of Agriculture, Food and Rural Affairs' Plan to Improve Distribution Structure of Agricultural Wholesale Markets

[Asia Economy Sejong=Reporter Kim Hyewon] The government plans to expand and mandate blind auctions to change the distribution environment of agricultural product wholesale markets. This is to ensure that auctioneers conduct auctions without verifying bidders' identities or purchasing capabilities, encouraging sales at the highest price only.

Additionally, to mitigate price volatility of agricultural products, the government will mandate securing dedicated auctioneers for fixed-price and private sales, and as part of digital transformation, will pilot the introduction of electronic delivery notes at the Garak-dong Agricultural and Marine Products Wholesale Market this year.

An ombudsman system (complaint assistant) will be introduced to mediate complaints and disputes arising from transactions in wholesale markets, and local governments will be required to establish and operate wholesale market dispute mediation committees.

The Ministry of Agriculture, Food and Rural Affairs announced on the 17th that it will designate four major areas of wholesale distribution innovation to enhance the rights of shipping farmers and strengthen the public nature of agricultural product wholesale markets, and will promote improvements to the distribution structure of agricultural product wholesale markets accordingly.

Agricultural product wholesale distribution is centered on public wholesale markets, and since the opening of Garak Market in 1985, the auction system has institutionalized the transaction method. However, under the framework of the "Act on the Distribution and Price Stabilization of Agricultural and Fishery Products," wholesale market distribution entities have been criticized for complacency and failure to adapt to changes in consumers such as the development of information and communication technology (ICT), demographic structure, and agricultural product consumption trends.

Accordingly, since November 2020, the Ministry of Agriculture, Food and Rural Affairs has designated four major areas?▲Enhancement of shipping farmers' rights ▲Strengthening the public nature of wholesale corporations ▲Evaluation and improvement of the market wholesaler system ▲Functional innovation of wholesale markets?based on opinions from various sectors, selecting ten directions and sixteen key tasks for promotion.

Enhancing Shipping Farmers' Rights... Introducing Ombudsman and Minimizing Sales Label Corrections

First, to enhance the rights of shipping farmers in agricultural product wholesale markets, an ombudsman system (wholesale market complaint assistant) will be introduced to mediate complaints and disputes arising from transactions in wholesale markets, and local governments will be required to establish and operate wholesale market dispute mediation committees.

To minimize corrections to agricultural product sales labels, improvement plans for on-site inspections will be established, and a classification system for sales label corrections by responsible parties will be developed and reflected in evaluations, thereby strengthening sanctions against unnecessary sales label corrections and establishing a management system.

To promote competition within wholesale markets and enhance transaction transparency, a payment settlement organization will be piloted to allow intermediate wholesalers to participate in auctions of other wholesale market corporations, and blind auctions?where bidder information is concealed and sales are made only at the highest price?will be expanded and mandated.

To mitigate price volatility of agricultural products, securing dedicated auctioneers for fixed-price and private sales will be mandated, and regular investigations into auction prices and price fluctuations will be conducted with improvement measures reflected in wholesale market evaluations to establish a management system.

For digitalization, supply-demand adjustment, and logistics efficiency of public agricultural product wholesale distribution, electronic delivery notes will be piloted this year at the Garak-dong Agricultural and Marine Products Wholesale Market in Seoul.

Kim Jong-gu, Director of Distribution and Consumption Policy at the Ministry of Agriculture, Food and Rural Affairs, said, "With the introduction of the electronic delivery note system, shippers will be able to check the scheduled shipment volumes by item and wholesale market nationwide and ship agricultural products accordingly, expanding shipment options and forming stable and appropriate purchase prices." He added, "It is expected to realize logistics efficiency such as shipment schedules, joint logistics, inbound, delivery, and parking control at wholesale markets, and to increase social benefits by reducing distribution costs."

Removing Underperforming Wholesale Corporations... Enhancing Transparency of Market Wholesaler System

Wholesale corporations, as key public agricultural product wholesale distribution entities, will have a system established to remove underperforming corporations from the market to enhance public functions such as supporting shipping farmers and strengthening their core agricultural product collection functions, while encouraging competition within wholesale markets through the entry of new wholesale corporations.

To this end, support for shipping farmers by wholesale corporations will be expanded, the evaluation system will be restructured focusing on strengthening public functions such as shipper support, and sanctions such as cancellation of designation will be strengthened for corporations with poor evaluations through strict assessments.

Evaluation weighting will be increased for wholesale corporations' efforts to discover income crops such as new varieties and new items, and concurrent businesses supporting shippers and buyers will also be expanded.

Through regular operational status surveys and establishment of evaluation systems for the market wholesaler system, transparent transaction order will be established.

Currently, purchase prices from shippers by market wholesalers, which are undisclosed for business reasons, will be disclosed to enhance transaction transparency, and the market wholesaler system operation will be solidified through evaluations of activating purchase transactions responsible for selling shipping farmers' agricultural products.

Establishment of Nationwide Online Exchange

By establishing a nationwide online exchange that transcends individual wholesale market transactions, the separation of goods and money and non-face-to-face wholesale distribution systems will be activated, and the functions of local wholesale markets will be redefined to improve the distribution structure of agricultural product wholesale markets.

In addition, linked with wholesale market facility modernization projects, logistics infrastructure in local wholesale markets will be expanded, and support for processing facilities such as subdividing and repackaging to strengthen merchandising functions will be increased.

Local wholesale markets, which have weak collection and distribution functions, will be transformed into regional agricultural product hub logistics centers, and their collection and distribution functions will be strengthened by linking with large local demand sources such as public catering and local agricultural product (local food) direct stores.

This content was produced with the assistance of AI translation services.