🚨 Volatile Green Onion Prices: Between 'Golden Onions' and '$1 Green Onions', Farmers and Consumers Are Struggling

Today Korean Economic News | 2025.07.21

📌 Green Onion Prices Drop to 500 Won per kg, Farmers Can't Cover Costs..."Distribution System Reform Urgent"

💬 Green onion prices have plummeted to around 500 won per kg, leaving farmers unable to cover even their production costs. Green onions that were once called 'golden onions' due to high prices are now '$1 green onions', forcing farmers to either dispose of them or sell at a loss. The auction-centered distribution system and the government's temporary import policies are blamed as major causes of price instability. Farmers say "the pattern of spring crashes and fall spikes repeats every year" and demand "fundamental distribution system improvements such as designating green onions as auction-exempt items or introducing market wholesaler systems." Experts emphasize that both production control and distribution system innovation must happen together to stabilize prices of green onions, an essential food ingredient for the public.

1️⃣ Easy to Understand

While green onions are selling for 100-200 won per bundle at supermarkets these days, the farmers who grew them are actually losing money. This might be good news for consumers, but it's like a disaster for farmers.

To understand why green onion prices have dropped so much, we first need to understand how farm products are distributed. Green onions grown by farmers don't go directly to supermarkets - they go through places called 'wholesale markets' first. Here, prices are decided through 'auctions'.

An auction is exactly what it sounds like - prices are set through competitive bidding. Wholesale dealers who want to buy green onions gather and say things like "I'll buy at 1,000 won per kg" or "I'll buy at 800 won per kg". When there are lots of green onions that day, prices fall. When there are few, prices rise.

The problem is that green onions are hard to store. Unlike rice or potatoes that can be kept in warehouses and sold later, green onions must be sold quickly after harvest. So farmers have no choice but to sell even when prices are very low.

Recently, good weather helped green onions grow well, but unfortunately harvest times overlapped in many regions at once, flooding the market with green onions. This caused prices to crash at auctions.

When green onion prices get too high, the government allows imports from China to lower prices. But when prices fall too low, there are no real solutions. This one-sided policy is criticized for making farmers suffer even more.

Some experts suggest making green onions an 'auction-exempt item'. This means farmers and wholesalers would agree on prices in advance. They think this could reduce price swings.

In the end, this problem needs to be solved in a way that helps both farmers and consumers.

2️⃣ Economic Terms

📕 Auction System

The auction system is a way to decide farm product prices at wholesale markets, where the buyer offering the highest price wins through open bidding.

• The advantage is transparent and fair price setting, but prices can be very unstable.
• Prices can change dramatically based on daily supply and demand, creating uncertainty for producers.
• Farm products that are hard to store are more affected by auction price swings.

📕 Market Wholesaler System

The market wholesaler system is a distribution method where wholesalers who sell farm products between producers and retailers agree on prices in advance.

• Unlike auctions, prices and quantities are agreed upon beforehand, making prices more stable.
• Producers can predict selling prices in advance, making business planning easier.
• However, there are risks of price fixing or manipulation, requiring proper management.

📕 Tariff Rate Quota

Tariff rate quota is a system that applies low tariffs up to a certain amount, then higher tariffs beyond that amount.

• It's a policy tool to increase imports when domestic farm product prices spike, helping stabilize prices.
• This helps consumers but creates competitive pressure for domestic farmers.
• It must be used at appropriate levels to balance protecting domestic agriculture and consumers.

📕 Price Volatility

Price volatility shows how much a product's price goes up and down over a certain period.

• Farm products have high price volatility due to weather, seasons, pests, and other factors.
• High price volatility creates uncertainty for both producers and consumers.
• Stable distribution systems and policies are key to reducing price volatility.

3️⃣ Analysis and Economic Outlook

✅ Structural Causes of Green Onion Price Crash

• Let's analyze why green onion prices fell to 500 won per kg and the structural problems in farm product distribution.

  • First, seasonal concentrated harvesting and storage limitations are direct causes of the price crash. Green onions are mainly harvested in spring and fall, and this spring had excellent weather conditions leading to bumper crops nationwide. Major production areas like Jeollanam-do, Gyeongsangbuk-do, and Gangwon-do saw 20-30% more output than usual shipped all at once, creating oversupply. Green onions must be shipped within 2-3 days after harvest, so farmers have no choice but to sell even at low prices. Even with refrigeration, storage is limited to about a week, making it nearly impossible to adjust shipping timing for price control. This characteristic means even small increases in supply can cause dramatic price drops.

  • Second, the auction-centered distribution system maximizes price volatility. Currently, over 90% of green onions are traded through wholesale market auctions. While auctions provide transparent and fair pricing, they can create extreme price swings based on daily supply and demand. Green onions, which have relatively stable demand, are especially sensitive to supply changes. Farmers can't know what price they'll get until the day before, making business planning difficult. Some developed countries solve this through contract farming or pre-price agreements, but Korea still heavily relies on auctions.

  • Third, the government's unbalanced price policies worsen farmer losses. When green onion prices rise, the government quickly uses import expansion or reserve releases to lower prices. In 2023, when green onion prices exceeded 3,000 won per kg, they expanded Chinese green onion tariff quotas to stabilize prices. But when prices crash like now, there aren't enough measures like government purchasing or processing support. This unbalanced approach creates a structure where only farmers bear the risks. Farmers complain that "the government only protects consumers and ignores producers."

• Green onion price instability stems from structural limitations in the distribution system, not individual farmer problems, and cannot be solved without fundamental system improvements.

✅ Impact on Farmers and Consumers

• Let's examine the economic ripple effects of green onion price crashes on farmers and consumers.

  • First, farmers face worsening finances and risks of production base collapse. At 500 won per kg, green onions sell below production costs of 800-1,000 won. Considering seeds, fertilizer, and labor costs, farmers lose money on every sale. Some farmers are giving up harvesting entirely, plowing under fields or disposing of crops. If this continues, more farmers may abandon green onion farming. Green onion cultivation area has been steadily decreasing over the past five years, and combined with aging farmer populations, the production base is weakening. Young farmers avoid green onion farming precisely because of this extreme price volatility.

  • Second, consumers get short-term benefits but face long-term concerns. Currently, consumers can buy green onion bundles for 100-200 won at supermarkets, which is welcome news. Especially with rising living costs, lower prices for essential ingredients like green onions help household budgets. But this cheap supply isn't sustainable. If farmers abandon green onion production, prices could spike in a few years due to supply shortages. Similar patterns have repeated in the past. Ultimately, consumers need to understand that paying reasonable prices ensures stable supply.

  • Third, related industries and regional economies face chain reactions. Green onion price crashes hurt not just farmers but also agricultural input suppliers, transport companies, packaging companies, and other related industries. Rural economies in major green onion production areas are especially weakening. Falling farmer incomes lead to declining local businesses, negatively affecting entire rural economies. Green onion processing companies also struggle to secure stable raw materials despite lower prices due to farmers avoiding supply. This threatens the stability of the entire agricultural value chain long-term.

• The green onion price issue should be approached from the perspective of building a sustainable agricultural ecosystem, not as a farmer versus consumer conflict.

✅ Distribution System Improvements and Policy Alternatives

• Let's explore distribution system improvements and policy alternatives to stabilize green onion prices.

  • First, designating auction-exempt items and expanding contract farming is needed. Essential farm products like green onions should reduce auction dependence and shift to pre-contracted pricing between producers and distributors. In Japan, over 40% of vegetables are traded through contract farming, providing high price stability. Korea should also increase direct contracts between large retailers or food service companies and farmers, reducing intermediate distribution steps and improving price predictability. The government should build information matching systems to spread contract farming and create institutional mechanisms to guarantee contract fulfillment. Agricultural cooperatives and producer associations should also be strengthened so organized entities, not individual farmers, can participate in price negotiations.

  • Second, expanding green onion storage and processing facilities and technology development is urgent. One root cause of green onion price volatility is difficulty in storage. Government and local authorities should expand green onion-specific cold storage and help farmers adjust shipping timing. Green onion processing technology development and processing company cultivation should create systems for distributing not just fresh green onions but dried, frozen, and other processed forms. This would allow using excess supply for processing during oversupply periods, preventing price crashes. The Rural Development Administration should focus investment on extending green onion storage periods and expand programs spreading such technology to farmers.

  • Third, balanced government price management policies are needed. The current unbalanced approach of only intervening during price increases should shift to active intervention during price drops too. Agricultural price stabilization funds should be used so when prices fall below certain levels, the government purchases crops or supports processing and disposal costs. Import policies should also be carefully managed considering domestic farmer protection. Rather than only considering consumer prices, balanced approaches considering domestic agriculture sustainability are needed. The Ministry of Agriculture, Food and Rural Affairs should establish comprehensive supply management plans for green onions and other major vegetables, pursuing stability across production-distribution-consumption stages.

• Green onion distribution system improvement should be approached from a long-term perspective of building sustainable agricultural ecosystems, not short-term fixes.

4️⃣ In Conclusion

The green onion price crash clearly shows structural problems in Korea's farm product distribution. The ridiculous price of 500 won per kg threatens farmer survival and ultimately shakes the sustainability of Korean agriculture.

The core problem lies in the auction-centered distribution system. Despite advantages of transparent and fair pricing, when combined with characteristics of hard-to-store farm products, it creates extreme price volatility. Added to this, the government's unbalanced price policies have created a structure where only farmers bear risks one-sidedly.

Solutions exist. Price stability can be improved through auction-exempt item designation, contract farming expansion, storage and processing facility expansion, and balanced government policies. But such changes require time and money, and cooperation from government, farmers, distributors, and consumers.

Consumers especially need attitude changes. While cheap green onions may be good now, if farmers give up, we might pay much higher prices in a few years. Understanding that paying reasonable prices ultimately ensures stable supply is important.

The government should no longer rely on temporary measures. Farmer survival should be as important a policy goal as consumer price stability, and comprehensive measures for building sustainable agricultural ecosystems must be prepared.

Finding a balance point where both farmers and consumers can smile between 'golden onions' and '$1 green onions' is our challenge. This isn't just a price issue but an important choice affecting the future of our agriculture.