Gov¡¯t proposes farmers¡¯ debt reduction

The government wrote up and submitted a special proposal of measures for the reduction of farmers¡¯ debt amounting to 1.8 trillion won including an earmark of 4 trillion won annually for the next five years. The funds would be made available to the farmers for the replacement of the high-interest loans with a low 6.5 percent loan by the government.

This marks the first time this year that the government has propose a farm-debt reduction proposal with hard numbers. Such a proposal by the government reflects its agreement with a special law for farm-debt reduction currently pursued by the ruling party.

According to the special proposal by the Ministry of Agriculture and Forestry, in order to reduce the debt arising from the high interest rates of 11 percent to 12 percent, mutual financing loans estimated at 17 trillion won annually, the government proposes to offer 4 trillion won in 6.5 percent loans. Adding to the current availability of annual 4.47 trillion won for 5 percent loans of the agricultural management fund, the farmers will have a total 8.5 trillion won available for low-interest loans.

For the repayment of the government supporting funds, which would be due starting next year and the following year, 1.386 trillion won and 1.1261 trillion won, the farmers will be able to spread out the repayment schedule over five years. In addition to the 1.8 trillion won, an additional 1 trillion won will be invested as an agricultural management improvement fund at an interest rate of 6.5 percent with the repayment spread out over two to three years.