Attracting 5 Trillion KRW Private Capital to Agri-Food Industry by 2027... Focused Investment in 'Smart Agriculture and Food Tech'

Emergency Economic Ministers' Meeting
Measures to Revitalize Private Investment in the Agricultural and Food Sector

The government has decided to attract 5 trillion won of private capital to the agri-food industry by 2027 to strengthen agricultural competitiveness and create high added value.

On the 21st, the Ministry of Agriculture, Food and Rural Affairs announced the "Measures to Revitalize Private Investment in the Agri-food Sector" at the "Emergency Economic Ministers' Meeting" chaired by Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho.

An official from the Ministry of Agriculture, Food and Rural Affairs explained, "This measure focuses on creating an ecosystem that leads to the expansion of private investment by discovering promising sectors and management entities in the agri-food industry through 'production and sharing of investment information - expansion of investment resources - activation of recovery markets - establishment of institutional foundations.'"

The core of this plan is to create a private-led investment ecosystem in agriculture and attract 5 trillion won in private capital to the agri-food industry by 2027. A total of 5.6 trillion won in investment resources, including 600 billion won of government funds, will be secured.

At the end of last year, there were six listed companies in the agriculture, forestry, and fisheries sector, with a market capitalization of 3 trillion won, accounting for 0.14% of the total market capitalization. Additionally, new venture investments in the agri-food sector amounted to 124.6 billion won, only 0.9% of the total venture investment scale (13.6 trillion won).

To resolve the issues of information shortage and asymmetry, which are cited as reasons for the sluggish private investment in the agri-food industry, the government plans to publish more than 80 investment information analysis reports annually, 20 per quarter, on industry trends and excellent management entities. Furthermore, an "Investment Information Sharing Platform" will be established in September to provide integrated investment information, and more than 20 investment briefings will be held annually.

A foundation for creating a private mother fund that raises private capital and invests in subsidiary funds for investment purposes will also be established. Legal grounds will be secured this year to create a 100 billion won private mother fund by 2027, and based on this, the formation of private subsidiary funds totaling over 300 billion won will be pursued. These funds will focus on promising management entities in new agri-food industries such as smart agriculture, food tech, and green bio.

Additionally, through private financial institutions such as NongHyup Bank, new loan products will be launched that strengthen non-financial evaluations such as technology and growth potential for promising management entities lacking collateral. A total of 4.3 trillion won in new loans will be supplied by 2027.

Efforts will also be made to activate the recovery market. Considering that investment decisions are difficult when investment capital is illiquid, an additional 150 billion won will be raised by 2027 for secondary funds, which are intermediate recovery means. Secondary funds purchase stocks held by other funds or trade shares held by limited partners (LPs).

The expansion of the agri-food mother fund and diversification of investment methods will also be promoted. By 2027, policy funds totaling over 1 trillion won will be formed to focus investments on areas requiring policy support such as startups, youth, and regions. Institutional improvements will also be pursued to enhance investment incentives for early-stage management entities and to activate follow-up investments.