| Older Farmers’ Retirement and Farm Succession in Korea: Concerns and Policies | |||
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| Author | Lim, Soyeong | ||
| Views | 89992 | Publication Date | 2020.03.04 |
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Research Background As the agricultural population is shrinking and aging, farming business succession is very significant. The farmers aged 60 or older took 41% of the total farming population from 2000 to 2015. During the same period, the ratio of young farmers in their 20s decreased from 10.5% to 5.8%. Meantime, the proportions of farmers in their 30s and 40s reduced from 9.2% to 5.2% and from 13.4% to 9.2%, respectively. Directly speaking, it is rare to see people aged younger than 50 in farming areas. The demographic change in the agricultural sector clearly shows that old farmers’ business transfer is not sufficient. Although the government operates policies related to farming business transfer, their outcomes are not significantly effective. The reason is that those policies regarded old farmers as the target for restructuring and focused on their retirement. However, farming business succession means a shift in generations, in which the old retire and the young come in to replace them. Therefore, it is necessary to seek ways for elderly farmers’ visible and invisible assets will be handed smoothly over to young farmers, who newly enter into the sector. Also, it is essential to reflect aged farmers’ reality and needs for retirement in the policies to mitigate their economic and social burdens from the business succession. By doing so, it will be possible to help them enjoy a secure retirement life. Against this backdrop, this study aimed at identifying obstacles to business transfer and seeking solutions from a new perspective of farm succession. Research Methodology For this study, we carried out relevant literature research, surveys, overseas field research, and statistical data analysis. Literature research focused on previous research on agricultural business transfer, retirement, and farm succession. The survey was carried out by mail, targeting 700 farmers. To break down, 376 farmers aged 65 or older and 314 farmers younger than 65 (KREI’s local informants) responded. Based on their answers, we analyzed farm succession, willingness to transfer, influencing factors, and related problems. For statistical data analysis, the raw data of the Survey of the Farm Household Economy was used for the inspection of old farmers’ economic state. Also, we examined support programs for farm succession in Japan and European countries and identified implications for Korea. Lastly, to understand legal and institutional grounds for farmers’ status change after handover, we entrusted a study on the definition of farmers through comparison with Japan to an external organization. Findings Factors influencing farm succession are composed of economic and non-economic ones. Non-economic factors mean emotional or physical aspects, including a sense of separation, concerns for health, intention to maintain an identity as a farmer. The result of an analysis using farm size as a proxy variable for farmers’ economic state showed that the bigger the farm is, the more likely the farmer is to find a successor for business transfer. Also, according to the result, when the farm size is big, a delay in business transfer will happen because of non-economic reasons. In the meantime, new farmers face more hardship for early-stage settlement when they do not have local networks. They need teaching, advice, and information from experienced farmers. Farm households that have chosen successors go through conflicts caused by the fact the current business owner and his or her successor belong to the same family and work together for the farm business. Also, they fail to have sufficient discussions on the specific succession procedure, method, timing, and financial support after the completion of the handover. Consequently, the succession procedure is not well planned. Old farmers rely on farming for a living even though they are at the retirement age. They still have to work even after the peak of economic activities, mainly because there are no sufficient income sources such as government transfer income or other income from a property. (The rest is omitted. See the attached file for details.) Researchers: Lim SoYeong, Kim Namhoon, Ha Inhye Research period: 2019. 1. ~ 2019. 10. E-mail address: sylim@krei.re.kr |
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