This study is aimed to seek methods to efficiently use agricultural products producing facilities by figuring out objective operating ratio of sorting and cold storage systems, among agricultural products producing facilities operated by agricultural organizations, and then evaluating efficiency of agricultural products producing facilities.
Along with changes in agricultural distribution environment, governmental policies for agricultural products distribution have become diverse and specific. Aggressive projects to activate agricultural distribution and to create agricultural brands have been carried out, in order for higher competitiveness of individual distributors. Also, foothold APCs are supported for larger and more professional agricultural products producing facilities.
Agricultural products producing facilities, designed to create value added through a series of processes such as sorting, storage, and processing of raw materials produced by farmers, are core factors for more competitive agricultural distribution. Sorting systems are to create value added by sorting out produce based on size, shape, color and sugar contents, and by doing small-size and standard packaging for customers’ needs. Storage systems are responsible to raise time utility by maintaining freshness of produce. In that consumption of produce is carried out evenly throughout the year while producing is concentrated on specific time period, shipping time can be adjusted considering consumption patterns and market prices, by using cold storage systems.
A recent comprehensive evaluation report on agricultural distribution suggests that agricultural producing facilities now deal with and sold more produce in the wake of governmental support for agricultural producing facilities.
As a result of investigating 250 organizations holding sorting systems and 157 operating cold storage systems, among 711 agricultural producing organizations, the virtual annual average operating ratio turned out 36.6% and 43.4% respectively, which shows a considerable difference from results of the comprehensive evaluation report. These low operating ratios resulted from the fact that most organizations handled a single item without connections with other organizations.
Efficient organizations drown from the DEA model are only 26 out of 150. Agricultural cooperatives and corporations account for about 50 % respectively. As a result of the analysis utilizing diverse variables such as input and output, efficient businesses, compared to their inefficient counterparts, have more cooperative pooling practices, higher operating ratios of relevant facilities, and more diverse shipping routes, which is a clear standard to determine efficiency. If taking changes in agricultural distribution environment into account, it can be said that businesses inefficiently using agricultural producing facilities do not have established management systems efficiently utilizing their sorting and cold storage facilities. Therefore, it is necessary to suggest methods to efficiently use agricultural products producing facilities to businesses that have larger sorting and cold storage systems and that pay more for those facilities, rather than ones with higher management skills.
The results of this study, possible problems of agricultural producing facilities, can be summarized as ① lower operating ratios due to insufficient producers’ systematization and loyalty, ② unplanned arrangement of agricultural producing facilities without considering local conditions, ③ distributors’ competitive practices to secure produce, and insufficient integrated implementation systems, ④ agricultural producing facilities for a single item, ⑤ selection of inappropriate operators, ⑥ obsolete facilities and frequent failures, ⑦ low professional expertise in agricultural distribution. The biggest problem, among those, is thought to be obsolete facilities, frequent failures, and difficult management, requiring countermeasures.
Methods to efficiently use agricultural products producing facilities include ① systematization of multi-item producers, and diversification of produce securing systems, ② aggressive marketing practices, ③ establishment of integrated implementation systems in each area, ④ efficient arrangement and management of agricultural products producing facilities. Among these, inducements for higher systematization and stronger confidence among producers should be established for multi-item producers’ systematization and diverse produce securing systems. Also, conflicts among organizations should be resolved by removing competitive practices to secure produce. In order for aggressive marketing practices, flexible decision-making procedures should be settled, and marketing strategies considering competence of each operator. Local governments should design their own project directions, and methods to raise cooperation among local agricultural products producing facilities should be established, for integrated implementation systems in each area. In addition, validity for local agricultural producing facilities should be closely reviewed, and pre/post-inspection systems to prevent failures and aging of facilities should be built.
For those, policies should be established, such as ① evaluation standards of agricultural products producing facilities, ② multi-item operating systems considering local conditions, ③ stronger unit management systems, ④ integrated implementation structures in each area, and finally ⑤ more experts in agricultural products producing.

Researchers: Byung-Ok Choi, Chang-Gon Jeon, Dong-Hoon Kim
E-mail address: bochoi@krei.re.kr