Research Reports
An Evaluation of Agricultural Distribution System and Efficiency Improvement
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AuthorJeon, Changgon
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Publication Date2009.11.01
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Original
This study is aimed at presenting methods to improve the efficiency of agricultural distribution by evaluating problems in the current distribution system, focusing on several main processes between production and consumption of agricultural products. In order for this study to be easily implemented, the tomato, as a greenhouse fruit vegetable, and the Chinese cabbage, one of main field-grown vegetables, were selected. As for distribution channels, the wholesale market distribution, direct distribution and large retailer distribution were analyzed.
In Chapter 2, the concept and functions of agricultural distribution were clarified and the current state of agricultural distribution was estimated to provide an overall insight into the agricultural distribution system. Through this, it was turned out that the distribution cost in agricultural logistic costs was on the rise, and of the distribution cost, sorting/packaging/processing costs and transporting costs accounted for more than 70%. Also, the current distribution system for Chinese cabbages and tomatoes was investigated, and possible changes in agricultural distribution environment were estimated. The factors which will affect agricultural distribution environment in coming years include ① changes in markets and logistic environment, ② development in the IT industry, and ③ changes in logistic management environment.
In Chapter 3, each stage of the distribution system for Chinese cabbages was analyzed in both cases of the wholesale market distribution and direct distribution, and then distribution efficiency, transportation time and commercial value were compared. The results said that the cost of wholesale market distribution was 114.8% of the farm price, while the direct distribution cost was 76.5%. It was seen that the wholesale market distribution should be more efficient and farmers’ shipping in direct distribution should be improved to save high distribution cost for Chinese cabbages.
Chapter 4 involves the distribution system for tomatoes. Here, each stage of the distribution system was analyzed in both cases of the wholesale market distribution and large retailer distribution, and then distribution efficiency, transportation time and commercial value were compared. Although the wholesale market distribution cost 11.1% less than the large retailer distribution, the farm prices of the two were similar. As for the transportation time, the wholesale market distribution took 29~50 hours, compared to 25~30 hours of the large retailer distribution. Also, the commercial value based on freshness of produce fell 30~40% and 20% through the wholesale market and large retailer, respectively.
Chapter 5 provided problems and improvements in the agricultural distribution system through analysis of the distribution system for Chinese cabbages and tomatoes. First of all, the wholesale market distribution has problems in distribution functions, distribution rates and distribution connection. These include ① insufficient mechanical loading, ② high empty vehicle transferring rate, ③ low processing at the farm, ④ low storage rate and insufficient cold transportation systems, and ⑤ delayed distribution within wholesale markets. Also, there are problems in systems and policies, such as ① small-size distributers, ② inefficient supporting systems for distribution, ③ inflexible wholesale market system and delayed transportation, and ④ insufficient infrastructural connections among distribution stages. In the meantime, the direct distribution and large retailer distribution systems have problems including ① growing distribution cost at the farm, ② insufficient cold transportation, ③ the high-cost structure of distribution, and ④ inefficient transportation costs.
Given these, in case of the wholesale market distribution, it is advisable that ①consistent mechanical loading be developed between production and consumption, ② the transportation efficiency be enhanced and the empty vehicle transferring rate be declined, ③ the storage efficiency be enhanced and consistent cold transportation system be built, and ④ problems in distribution functions, distribution rates and distribution connections be addressed by increasing processes at the farm for highly effective agricultural distribution. In terms of efficient systems and policies, ① distributers at the point of production and consumption should grow in size, ② necessary institutions for more efficient wholesale market distribution should be introduced, ③ relevant support from the government should be provided, and ④ better connections among logistic equipments at the point of production and consumption should be established. Palletization, along with loading by purchase patterns, should be carried out for better direct distribution, while logistic center-centered transportation as well as distribution allowing for features of each produce should be implemented for efficient large retailer distribution.
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