Is the spread of smart farms the main culprit behind the plunge in agricultural product prices?

Recently, some in the agricultural sector have raised the claim that the concentration in certain crops caused by the expansion of smart farm adoption is fueling declines in agricultural product prices. The argument is that policies fostering smart agriculture have rapidly advanced facility modernization and smart farm deployment, leading to oversupply, which in turn has resulted in falling market prices.

However, experts in the agricultural industry see it differently. They point out that the structure of agricultural price formation is not simply a function of supply volume, and that recent price volatility is the result of a complex interplay of climate, pests and diseases, and producers’ expectations rather than oversupply caused by smart farms themselves. This is why concerns are being raised that singling out smart farms as the sole culprit behind price declines could obscure the true nature of the market.

According to the July issue of the Korea Rural Economic Institute’s agricultural outlook, as of June 2026, prices of major crops grown in smart farms—tomatoes (-4.2%), jujube-shaped cherry tomatoes (-9.1%), oriental melons (-21.8%), and cucumbers (-30.8%)—fell compared with the same period last year. During the same period, shipment areas also increased for all of these crops: tomatoes (1.3%), jujube-shaped cherry tomatoes (2.3%), oriental melons (0.4%), and cucumbers (3.1%).

However, it would be unreasonable to interpret this increase in cultivation area simply as a “surge in smart farms.” It may also reflect the replacement of aging greenhouse facilities or temporary conversion by farmers using simple plastic greenhouses.

The Korea Rural Economic Institute identified “climate factors” as the decisive reason for the sharp drop in oriental melon and cucumber prices. The analysis says that during this year’s growing season, outbreaks of pests and diseases dropped sharply, while sunshine hours increased significantly, causing short-term fruit set volumes (the amount of fruit produced) to surge explosively regardless of whether crops were grown in open fields or facilities. This can be interpreted as meaning that natural environmental factors had a greater impact on supply volume than overproduction resulting from the spread of smart farms.

Experts in the agricultural industry point out that agricultural prices are affected by various variables such as domestic production and consumption, import volumes, and climate, so it is inappropriate to attribute the situation solely to increased smart farm supply.

An executive at Company P, which supplies smart farm facilities, explained, “Tomatoes, paprika, and cucumbers have the structural advantage of being able to easily share the same facilities and environmental control equipment within a greenhouse,” adding, “Since agricultural technology has been standardized to a certain level, similar crops tend to account for a high proportion of those grown in smart farms.” He continued, “However, the claim that smart farm cultivation unconditionally caused prices to fall is half right and half wrong,” adding, “In reality, farms tend to repeatedly concentrate on and withdraw from certain crops depending on market expectations and real-time price trends, and this selective concentration by farms has a greater impact on price volatility.”

Professor Lee Myung-hoon of Sunchon National University said, “It is very difficult to conclude that the recent decline in agricultural product prices was caused by smart farm expansion as a single factor,” adding, “I acknowledge that in the early stage of smart farm adoption there is a tendency for concentration in certain items, but the variables affecting agricultural prices are far too diverse, ranging from weather conditions to distribution stages.”

Nevertheless, the agricultural industry emphasizes that the diversity of crops grown in smart farms should be increased through the cultivation of regionally specialized crops. Professor Lee Myung-hoon proposed, “If the government and local authorities implement and establish systematic crop diversification policies so that various crops can be grown in smart farms, concerns over concentration in specific items and the resulting price volatility will gradually be resolved in the future.”