'Aging Population and Decline → Soaring Food Prices: Korea's Agriculture in Crisis Needs D.N.A [Reading Science]'

Smart Tractor. Stock Photo.

[Asia Economy Reporter Kim Bong-su] #1. Mr. A, a farmer in his 70s, plans to practically quit farming starting next year. As his strength wanes, he had been employing foreign workers through a labor agency for some time. Korean workers, especially young and strong ones, are unwilling to do the hard farm work, making them nearly impossible to find. However, this became even more difficult due to COVID-19. With foreign workers' entry restricted, daily wages for laborers soared well above 200,000 won. Mr. A said, "Because of labor costs, nothing is profitable anymore, so I plan to cultivate crops only as a pastime going forward."

In an aging society compounded by the COVID-19 situation, finding labor in Korean rural areas has become as difficult as catching stars in the sky. Consequently, prices of Korean agricultural products, which used to be cheap, have recently surged, making life harder for urban low-income residents. Agriculture, still considered the "most backward" sector, has become an industry urgently needing "disruptive innovation" to maximize productivity and improve quality with minimal labor and energy input. Accordingly, 'Smart Farm' utilizing D.N.A (Data, Network, Artificial Intelligence) is emerging as the trend.

◇ Rural Areas on the Brink of Collapse, Smart Farms Are the Trend

Korean rural areas are currently facing a crisis of devastation. Due to aging agricultural and livestock populations, declining young influx, and shrinking production areas, farmers' incomes have drastically decreased, and the entire industry is doubted for its "sustainability" amid stagnant exports and growth rates. The agricultural population dropped sharply from the low 3 million range in 2016 to about 2 million in 2019. The proportion of rural residents aged 65 and over also increased annually from 40.3% in 2016 to 46.6% in 2019. In response, the spread of smart farms, which produce eco-friendly agricultural and livestock products with minimal labor and energy input, centered on facility horticulture and livestock, has surged. Intelligent facility farms integrating big data, artificial intelligence (AI), and unmanned automation technologies into greenhouses and livestock barns are being established throughout rural areas, enabling remote and automatic cultivation of crops and livestock.

The area of smart farm adoption was only 405 hectares for facility horticulture and 24 households for livestock in 2014 but rapidly increased to 4,010 hectares and 790 households respectively by 2017. This year, the government aims to achieve 7,000 hectares for facility horticulture and 5,750 households for livestock. Korea selected four locations?Sangju City in Gyeongbuk, Gimje City in Jeonbuk, Goheung County in Jeonnam, and Miryang City in Gyeongnam?in 2018 and 2019 to establish smart farm innovation valleys as hubs for expansion. Globally, smart farms are also becoming the norm. The global smart farm market size was $14.8 billion in 2021 and is expected to grow to $22 billion by 2025, expanding at a rapid compound annual growth rate of 9.8%.

As the smart farm industry expands, corporate investments in related fields are also increasing. The 'Agtech' boom, combining advanced technology and agriculture, is underway. From 2010 to 2019, the number of global investments in smart farms and Agtech increased by an average of 24.5% annually. In 2019 alone, 495 investments were made, more than seven times the 69 investments in 2010. In Korea, investors are also investing in eco-friendly food production and smart farms. Notable examples include Kakao Investment's 10 billion won investment in Manana CEA in 2015 and LG Chem's acquisition of Dongbu Farm Hannong in 2016.

◇ Agriculture in the D.N.A Era

In agriculture, big data?such as weather variables, soil nutrients, environmental conditions, GPS data, work records, harvest yields, and fertilizer input amounts?has become essential. As data and sensors combine with smart facilities and equipment, agriculture is transforming into a high-tech industry, significantly boosting productivity. In 2006, 'Climate Corporation,' founded by former Google engineers in the U.S., became famous for its service analyzing diverse agricultural data to support farmers' decision-making. Agricultural machinery company John Deere acquired AI venture 'Blue River Technology' in 2017 to integrate big data and AI technologies into agriculture. John Deere has developed equipment that reduces herbicide use by 90% through effective spraying techniques and distinguishes between weeds and crops to apply fertilizers accordingly. In China, facing a sharp population decline in the Xinjiang Uygur Autonomous Region, Baidu developed and operates autonomous tractors combining satellite navigation and 5G technology. Domestically, LG Uplus and LS Mtron are developing a 5G-based tractor control system aiming for commercialization in 2022.

Drones are actively used for effective soil condition measurement, seed sowing, fertilizer and pesticide application, crop monitoring, and pest and disease diagnosis. Companies like Google, Intel, and China Mobile are developing 5G-enabled drones, and in Korea, Goheung County is investing 16.4 billion won to develop a 5G communication-based unmanned drone operation system by 2023.

AI is also actively utilized to solve agricultural challenges. AI integrated with robots, unmanned aerial vehicles, and crop management systems minimizes input resources while increasing harvest and output. In the U.S., Google’s parent company Alphabet’s venture arm 'Google Ventures' invested $15 million in the startup 'Farmers Business Network' to secure market leadership. Microsoft (MS) is conducting the 'MS FarmBeats' project, aiming to increase global food production by 70% by 2050. Meanwhile, the Netherlands commercialized the world's first robotic milking system in 1992, which Korea also imports. Italy has developed technology using IoT-based wireless sensor networks to inform farmers of optimal water and nutrient application timing, increasing yields. In Korea, the Rural Development Administration has developed and is disseminating 'Korean-style smart farm' technology. It minimizes energy input by utilizing cutting-edge materials and renewable energy. The system uses robots and intelligent agricultural machinery, with AI in the cloud analyzing real-time crop information to help farmers make optimal decisions.

The Korea Institute of S&T Planning and Evaluation (KISTEP) pointed out in a trend report published last month that "to revitalize the smart farm industry, legal and institutional improvements through inter-ministerial cooperation and nurturing of excellent human resources are necessary, and active corporate investment in Agtech is also important," adding, "It is essential to first establish systems and platforms that enable data collection across the entire agricultural environment."