Gov`t Reforms Structure of Direct Farm Subsidies

Farmers as early as 2013 will likely benefit from direct farm subsidies for cultivating fields in person as well as for cultivating rice paddies.

The Food, Agriculture and Fisheries Ministry said yesterday, “The Agriculture and Fisheries Advancement Committee decided to discuss how to pay a direct subsidy to farmers cultivating farm fields similar to direct rice farm subsidies.”

Rice farm subsidies are paid to farmers who farm the land, be it owners and tenants.

The committee is a private-public body set up at President Lee Myung-bak’s directive for agricultural and fisheries reform. It will set details of this plan as a means to stabilize incomes for farmers and fishermen in its main session in mid-July.

This is the first time for the central government to push for payment of direct subsidies for farming fields. In the past, government officials and politicians had cited the need for such measures, but such efforts stopped short of becoming policy.

The Jeju Special Self-Governing Province is paying on a limited basis subsides for certain farm fields unfavorable for farming.

Of the seven programs for farm subsidies, the committee will merge those designed to serve the public interest, including fixed direct subsidies for rice farming, direct subsidies for paddies with unfavorable farming conditions, direct subsidies to preserve scenery, direct subsidies for organic farming, and direct subsidies for eco-friendly and safe livestock farming into “a direct subsidy for the public interest.”

The committee will also merge programs designed less for the public interest but necessary to boost the global competitiveness of Korea’s farms and fisheries, including “direct subsidies introduced in lieu of yearly state purchases of rice produce” and those for compensation of damage from free trade agreements into “a direct subsidy for managerial stability.”

The direct rice farming subsidy was introduced in 2005 to assure the income of farmers who cultivate or manage paddies at a certain level. The fixed direct subsidy plan for rice farming pays out the same amount for farming fields per hectare, while the floating direct subsidy plan for rice farming is designed to pay 85 percent of the gap between a given year’s target rice price and the average national market price of rice of the harvest season that year.

The government decided to completely reshuffle the direct farming subsidy system because even if it poured huge budget into it, it would have failed to benefit the farmers who should benefit and instead go to unqualified recipients.

Last year, certain government officials caused a stir by receiving farming subsides by taking advantage of loopholes in the system.

Another reason for the reshuffle is a change in the structure of the agricultural sector. Unlike in the past when rice was the staple food, farm field produce, including specialty farm produce, have become key sources of income for rural villages.

achim@donga.com