Hong Moon-pyo, CEO of aT, Discusses Agricultural Supply Issues in South Korea

"Consumers must be frustrated, asking, 'Why do agricultural prices always rise in the summer?' This is clearly not just a weather issue. The agricultural supply problem is not solely due to this year's bad weather; it is a result of the structural vulnerabilities in our agriculture combined with climate change."

This year, severe localized heavy rains have raised concerns about agricultural supply in the second half of the year. Deteriorating weather conditions, including reduced sunlight, have led to poor crop yields, raising fears of price increases.

Hong Moon-pyo, CEO of the Korea Agro-Fisheries & Food Trade Corporation (aT), emphasized in an interview with Aju Economic Daily on July 15 that the agricultural supply situation should not be viewed as solely dependent on weather conditions but rather as a reflection of the structural vulnerabilities in South Korean agriculture. He explained that the excessive concentration of certain crops and production areas makes the system susceptible to weather fluctuations.

He also offered a new perspective on climate change. While it poses significant challenges, he believes that simply avoiding it is not the solution. Hong stated that there is potential to cultivate new income-generating crops suited to the changing climate, which could also be developed as export strategic items, thus defining it as both a 'crisis and an opportunity.'

The following are key excerpts from the interview with Hong:

- As we enter the rainy season, there is growing concern about food prices. How do you assess the current prices of agricultural and livestock products?

"During the rainy season, wholesale prices for vegetables are rising, but retail prices are stable and lower than last year. This is due to a good spring harvest and ample stockpiles. In fact, some items have seen prices drop significantly due to a surge in shipments, prompting us to support farmers through direct market promotions and contract farming funding.

However, I am more concerned about livestock prices, particularly eggs. The supply has decreased due to avian influenza (AI), leading to a temporary price increase. In response, the government and aT are addressing the shortage by importing fresh eggs from various countries, including Thailand and Brazil, rather than relying solely on the U.S.

A notable aspect of this strategy is the introduction of fresh eggs from Brazil, a major poultry producer, to the domestic market for the first time. aT has also conducted on-site investigations through its São Paulo office to establish supply channels. However, imports are a supplementary measure, and we plan to proceed in a balanced manner, considering the domestic poultry farmers and supply situation."

- Each time unusual weather occurs, we see sudden spikes in prices for certain items, a phenomenon known as 'disaster-related price surges.' What do you believe is the cause of this?

"This is not merely a climate crisis; it is a problem intertwined with the structural vulnerabilities of our agriculture and climate change.

First, our agriculture is highly concentrated in terms of crops and production areas. Specific items like cabbage and apples are concentrated in certain regions, so when extreme weather events like heatwaves, wildfires, or heavy rains hit those areas, the national supply is disrupted all at once.

Additionally, climate change is reducing suitable cultivation areas. The apple-producing regions of Daegu and Gyeongbuk have seen a significant decrease in cultivation area over the past 30 years, and crops that are sensitive to high temperatures are becoming increasingly difficult to harvest reliably. The aging of farmers is also weakening the production base, making it challenging to quickly adapt or relocate production when yields decline."

Relying solely on price measures has clear limitations. We need to promote climate-adaptive varieties and cultivation techniques, enhance stockpiling capabilities to buffer supply, and expand contract farming while staggering harvest times. aT is working to connect production, stockpiling, and supply as a safety net to break the cycle of 'disaster-related surges.'

- Climate change is altering agricultural maps. How do you see the impact of shifting production areas on our agricultural landscape?

"The changing climate indeed poses significant burdens on production. Major crop production areas are moving northward, and the cultivation of subtropical crops, which was previously difficult, is increasing. However, the land suitable for high-altitude vegetables, which require cooler climates, is decreasing, leading to instability in growth.

Nonetheless, this presents both a crisis and an opportunity. There is potential to cultivate new income-generating crops suited to the changing climate, which could also be developed as export strategic items. aT is collaborating with the Rural Development Administration to cultivate climate-adaptive new varieties, and once these varieties are established, we believe they will stabilize domestic supply and connect to export items as well."

- Can you provide specific examples of how we can leverage the climate crisis as an opportunity? What role is aT playing in this?

"A prime example is strawberry farming. Strawberries can turn the climate's weaknesses into export opportunities, making it a good case of turning a crisis into an opportunity.

Originally, strawberries were only produced in winter. This led to a situation where we could not keep up with the growing demand for strawberries overseas. In response, the agricultural sector sought new solutions through controlled indoor cultivation. By precisely managing the growing environment—temperature, humidity, light, and carbon dioxide—we can now produce strawberries in the summer as well.

aT is working to disseminate this technology. In June, we held a 'Year-Round Strawberry Production Technology Seminar' at the aT Center in Seoul to help spread this technology among farmers. Our goal is to create an agriculture that overcomes seasonal challenges through technology rather than being dragged along by climate change."

- Exports of fresh agricultural products and K-Food, including ramen, are gaining momentum. After setting a record last year, the growth trend has continued into the first half of this year. Are there any particular areas of focus?

"We are paying special attention to fermented foods like kimchi and sauces. Kimchi has been recognized for its value, recently being included in the U.S. government's dietary guidelines as a health food. I believe that the entire range of K-fermented foods, including gochujang and doenjang, represents the unique competitiveness of K-Food.

Fresh agricultural products like strawberries and grapes are also showing remarkable growth. Last year, grapes achieved the highest export volume ever, becoming the top fruit exported, while strawberries also recorded their largest exports. However, the quality management of fresh agricultural products must be maintained throughout the entire process—from production to sorting, packaging, transportation, and local distribution—so we are actively collaborating with farmers.