Policies Supporting Return to Farming Have Fueled Speculation

Initiation of Amendments to the Farmland Act to Prevent Speculation
Only 16 Exceptions for Non-Agricultural Owners
Two-Thirds of All Farmland Exempt from Lease Regulations
Government Criticized for Encouragement, Hard to Avoid Blame

Farmers affiliated with the Busan-Gyeongnam Federation of the National Peasants' Federation held a press conference condemning 'farmland speculation' on the 8th in front of the main gate of the Korea Land and Housing Corporation (LH) headquarters in Chungmugong-dong, Jinju-si, Gyeongnam, regarding allegations of land speculation by employees. (Image source=Yonhap News)

[Sejong=Asia Economy Reporter Moon Chaeseok] The government has initiated amendments to the Farmland Act to prevent the recurrence of real estate speculation by employees of Korea Land and Housing Corporation (LH). It is prioritizing the review of a plan to mandate the submission of farming plans even for farmland under 1,000㎡, commonly referred to as 'jumal nongjang' (weekend farms). However, given that regulations on the Farmland Act have been continuously relaxed to attract returnees to farming and young farmers, it is expected that the government will find it difficult to avoid criticism that it has ultimately provided a pretext for speculation.

According to the Ministry of Agriculture, Food and Rural Affairs on the 16th, there are 16 exceptions in the current Farmland Act that allow non-farmers to own farmland. Since the enactment of the Farmland Act in 1994, the ministry has expanded exceptions for non-farmers' farming activities to attract those planning to return to farming after retirement and young farmers to rural areas. For small-scale farms, purchase is possible without submitting a farming plan, and heirs who are non-farmers can own farmland when the owner passes away.

As a result, a study has shown that about two-thirds of all farmland is excluded from rental regulations under the Farmland Act. The Korea Rural Economic Institute pointed out in a 2019 report that "over the past 20 years, the area of cultivated land has decreased by 0.9% annually, while the area owned by farmers has decreased by twice that rate, 1.8% annually." This means that ownership by non-farmers has relatively increased compared to farmers.

The institute added in the same report, "The government requires the preparation of farmland registers to efficiently use and manage farmland by understanding ownership and usage status, but the registration rate of farmland registers remains at about 70%, making it difficult to accurately grasp the actual ownership and usage of farmland."

Experts advise stricter application of ownership to prevent 'farmland speculation.' To this end, they suggest comprehensive changes including ▲revision of the development profit recovery system (tax law) ▲strengthening the ownership area criteria as one of the qualifications for farmers (Farmland Act) ▲recognizing non-farmers as quasi-members of the Nonghyup cooperative to prevent them from receiving government benefits such as direct payments (Nonghyup Act) ▲strengthening management by local farmland management committees for non-farmer heirs of farmland (Farmland Act) ▲actively encouraging re-leasing through farmland banks for non-farmer heirs (Farmland Act).

Kim Wan-bae, Professor Emeritus of Agricultural Economics at Seoul National University, said, "The most urgent task to prevent farmland speculation is to amend the tax law to strengthen the development profit recovery system and regulate the act of converting farmland into residential land to realize capital gains." He added, "Along with amending the Farmland Act to strengthen the criteria for farmers, it is necessary to concurrently amend the Nonghyup Act to prevent receiving government support benefits such as the public direct payment system."

A Ministry of Agriculture, Food and Rural Affairs official said, "While we have relaxed pre-acquisition and ownership regulations to encourage rural workforce inflow, we cannot deny that such policies have negatively affected the thorough establishment of verification mechanisms for illegal farmland acquisition," adding, "We will strive to finalize the amendment to the Farmland Act as soon as possible."

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