Medium-Term Ombudsman Takes Action to Resolve Difficulties of SMEs in the Agricultural Sector

147 Local Government Ordinances on Agricultural Machinery Rental, Recommendations for Improvement to the Ministry of Agriculture, Food and Rural Affairs and Local Governments

[Asia Economy Reporter Kim Jong-hwa] In the future, small and medium-sized enterprises (SMEs) in the agricultural sector across the country are expected to be able to rent agricultural machinery from local governments in more regions through convenient methods without unfair contract conditions.

The Small and Medium Business Ombudsman announced on the 3rd that it has proposed revisions to related ordinances to the 147 local governments nationwide that operate agricultural machinery rental businesses and the Ministry of Agriculture, Food and Rural Affairs, the competent ministry, to resolve management difficulties faced by SMEs in the agricultural sector.

Currently, local governments are lowering the economic burden on farmers and promoting the mechanization of agriculture by enabling joint use of expensive agricultural machinery through rental services.

However, complaints have been raised regarding restrictions on rental targets, inconvenient rental fee payment deadlines and methods, and contract conditions. In particular, although many local governments operate similar projects, differences in eligibility and conditions set by ordinances have caused inconvenience.

Accordingly, the Ombudsman conducted a comprehensive analysis of the agricultural machinery rental-related ordinances of 147 local governments and identified various types of issues to be addressed related to 'rental targets, rental fee payment methods, and lease contract conditions.'

The proposal includes expanding rental targets to allow farmers residing in other regions to rent agricultural machinery, extending the rental fee payment period, and revising rental fee payment methods to allow credit card payments.

In case of agricultural machinery accidents, the scope of responsibility will be specifically limited and calculated according to the lessee's intent, negligence, or cause of the accident. The obligation for lessees to subscribe to comprehensive agricultural machinery insurance will be exempted unless absolutely necessary, and sanctions for contract violations will be specified in the ordinance revision proposal.

The Ombudsman proposed these ordinance revisions to 147 local governments nationwide over about three months starting from September last year, and plans to sequentially revise ordinances in consultation with the Ministry of Agriculture, Food and Rural Affairs and related local governments in the future.

Park Ju-bong, the Ombudsman (vice ministerial level), said, "Through this regulatory innovation, we can revitalize local government agricultural machinery rentals, alleviate the management burden on farmers, and contribute to strengthening competitiveness," adding, "There are still many regulations that cause inconvenience to our daily lives and businesses in blind spots, and we will continue to promote such citizen-experienced regulatory innovations."

This content was produced with the assistance of AI translation services.