| The Management of Leases for Efficient Use of Farmland | |||
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| Author | Chae, Gwangseok | ||
| Views | 33585 | Publication Date | 2017.02.17 |
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Research Background Korea’s farmland system has been based on the land-to-the-tillers principle and the basic ideology of owner-farmer systems since the farmland reforms of 1950. However, the leased farmland area that was 8.1% immediately after farmland reforms increased to 42.2% in 1995. With the enactment of the 1996 Farmland Act, farmland acquired after 1996 is prohibited from being leased out unless there are exceptions prescribed by law. The land-to-the-tillers principle is the most important system of the agriculture industry in Korea that is prescribed by the constitution. However, considering the changed farming conditions, it is necessary to come up with plans to protect its goal and purpose while not hindering agricultural development in Korea. If the farmland issue is perceived as ‘improvement of agricultural productivity and rational utilization of farmland’, it is necessary to go beyond simply allowing or prohibiting farmland leasing, and come up with utilization plans of farmland leasing for the efficient use of farmland based on the principle of land-to-the-tiller from the perspective of improving agricultural productivity and on how to rationally use farmland. Research Method In order to investigate the state of farmland ownership and farmland leasing, not only the farmland leasing survey results of Statistics Korea, but also those that are difficult to identify with existing farmland lease surveys (by region, by item) were identified by analyzing the raw data of agricultural census and agricultural farm DB. National farmland usage (ownership, lease, etc.) surveys on 23 administrative regions called ri were carried out. This study was carried out with the cooperation of the Korea Rural Economic Institute, Ministry of Agriculture, Food and Rural Affairs, Korea Rural Community Corporation, and the respective local governments. The Korea Rural Economic Institute was in charge of drafting questionnaires, training surveyors, and analyzing results. The Ministry of Agriculture, Food and Rural Affairs cooperated with providing convenience for material and surveys with local governments and the Korea Rural Community Corporation, while the Korea Rural Community Corporation visited tillers and owners of 23 areas subject to surveys around the nation to conduct surveys. A survey on absent landlords was carried out using research agencies. The main contents of the survey were reason for leasing, lease contract method/contract period/lease rate, lease management policies, and tiller farming statuses. Analysis of farmland lease change elements Farmland leasing has continuously increased except during a specific period (between 1970 and 1975) since farmland reforms. Farmland leasing increased greatly from the late 1970s and the factors for increased farmland can be roughly divided into system aspects and economic aspects. The key point of the system aspect is that following the farmland reform act and prior to when the 1996 farmland act was introduced, there was no farmland act resulting in an increase of farmland leasing. The rate of farmland owned by non-farmers in 2010 was approximately 41.7%, which is about twice the amount of 19.3% of 1985. Japan, which was similar to Korea, had leased farmland rates of 30.9% in 2015, and about half of the leased areas was from non-farms that owned the land. The reason why non-farming owners accounted for about 85% of the total leased farmland in Korea was because the system was unable to properly regulate farmland ownership of non-farmers. The revenue value generated through farmland purchase is lower than the agricultural revenue generated from farmland leasing. Therefore, unless increases in farmland assets (rise in farmland prices) are expected by the farmer, it is more economical to expand the scale through leasing than by purchasing the farmland. Farmland usage status and leasing practices Leasing cases that allow exceptions according to the farmland act accounted for 42% of the leased farmland that was examined in this study. In addition, 10.1% of the leased farmland was cases where farmland was leased from resident landowners over the age of 60 for tilling. According to the current farmland act, even if it is a resident landowner, it is illegal to lease farmland without retiring from farming. As it is highly likely for farmland lease supplies by resident landowners to increase in the future, it is becoming important to manage farmland leasing of resident landowners within a systematic frame. Of the various factors to consider in farmland leasing, convenience of using farming machines was found to have the highest importance, and it was followed by production base arrangement (farmland arrangement). This represents that it should be considered with more importance than the proximity of farmland (efficient use of farmland) and leasing period (stable use). For questions to absent landlords on how farmland was acquired, 53.9% was through inheritance, and farmland acquisition as gifts was 12.2%, showing that 66.1% of all absent landlords acquired farmland through inheritance and gifts. Acquisition of farmland through sales was 33.9%. Of the farmland owned by absent landlords, over half of all farmland is leased to farmers, while 15.9% is left fallow. When considering that the total fallow area percentage of Korea in 2015 is 2.3%, it is evident that compared to farmland owned by resident landowners, farmland owned by absent landlords is being used very inefficiently. Implications of farmland leasing system operations of other countries Most regulations and rules on farmland usage are comprised through farmland leasing systems, and systems are well provided for farmland leasing. In Japan, Germany and France, farmland leasing administration organizations intervene for the sake of agricultural structure reforms. In order to promote fluidity in farmland, Japan and Germany changed the direction of systems that focused on leased farm protection in the past towards system reforms for fairness for both the lessor and leaseholder. Farmland leasing system reform plans Farmland lease contract systems must be introduced to establish rational usage order between the farmland owner and tiller regarding farmland leasing. For the (tentatively named) farmland leasing management act to be operated effectively, a system that manages farmland leasing is necessary. As plans to partially soften regulations on farmland leasing, it is necessary to allow farmland for resident farmland owners. The eight-year self-cultivation farmland’s transfer income tax exemption policy that distorts the farmland leasing market should be abolished, and a special long-term ownership deduction policy for farmland in agricultural promotion areas should be introduced. Researchers: Chae Gwangseok, Kim Hongsang and Yoon Sungeun Research period: 2016. 1. ~ 2016. 10. E-mail address: gschae@krei.re.kr |
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