Starting on the 12th, vertical farms will be allowed in industrial complexes, and it is expected that industries related to smart farms and smart agricultural equipment production will become more active.

The Ministry of Trade, Industry and Energy (Minister Ahn Deok-geun) announced on the 11th that the legal basis has been established to allow vertical farms (or plant factories) in the form of buildings to move into 1,315 industrial complexes nationwide (as of the second quarter of 2024) starting from November 12th.

In response to demands from the agricultural industry raised at the Ulsan People's Livelihood Forum in February, the government held a joint field meeting of the ministers of the Ministry of Trade, Industry and Energy, the Ministry of Agriculture, Food and Rural Affairs (hereinafter referred to as the Ministry of Agriculture, Food and Rural Affairs), and the Ministry of Land, Infrastructure and Transport (hereinafter referred to as the Ministry of Land, Infrastructure and Transport) on March 26 and promised regulatory reform within the year.

On July 26, the Ministry of Agriculture, Food and Rural Affairs enacted the Enforcement Decree of the Smart Farming Act, providing legal support for the revitalization of the vertical farming industry, a new type of smart farm.

As the Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport, which manage the qualifications for industrial complex occupancy and target industries, completed the revision of the Enforcement Decree of the Industrial Cluster Act (MOTIE) and the Enforcement Decree of the Industrial Location Act (MOLIT), vertical farms became the first crop production facilities to obtain qualifications for occupancy in industrial complexes.

Until now, industrial complexes have been targeting manufacturing and knowledge industries, so vertical farms that grow crops and fall under the category of “agriculture” were not permitted to move in.

Since the announcement of the regulatory reform drive, the Ministry of Agriculture, Food and Rural Affairs has been operating vertical farms.In October, the government established new standards for farmers to register as agricultural management entities, and included vertical farms in the target of policy support such as the Smart Farm Comprehensive Fund and Smart Farm ICT Convergence Expansion Project (from 2025).

A new R&D budget plan for 2025, including the K-Vertical Farm Globalization Project, was also submitted to the National Assembly.

In addition, excellent agricultural corporations operating vertical farms are also pushing for revisions to related laws so that they can expand their business scope to include smart agricultural equipment production and farmer education. In order to reduce management costs, they are also discussing with the Ministry of Strategy and Finance the addition of value-added tax refund items such as LEDs, which are key equipment for vertical farms.

Thanks to these institutional improvements and support, the number of companies wishing to move into and invest in the National Food Cluster (National Industrial Complex, Iksan) is increasing. The food industry has been discussing with the government a vertical farm business model utilizing the industrial complex.

The industry expects that conditions will be created where high-quality raw materials and material crops can be stably produced year-round in vertical farms, and high value-added processed products can be manufactured in adjacent factories, while also creating synergy with other industries such as logistics and energy efficiency.

Oh Seung-cheol, director of the Ministry of Trade, Industry and Energy’s Industrial Infrastructure Division, said, “With vertical farms that combine agriculture and information and communication technology now allowed to enter industrial complexes, we can expect the revitalization of the vertical farm industry, which has been struggling to secure locations, and joint growth with related industries such as ICT, robots, and sensors.” He added, “We plan to actively support vertical farms so that they can settle into industrial complexes as one of the new industries.”