| A Study on Enhancing the Direct Payment Schemes Based on Multi-Faceted Evaluation | |||
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| Author | Kim, Taehun | ||
| Views | 69724 | Publication Date | 2018.02.14 |
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Research Background It has been about 20 years since the direct payment schemes were implemented in Korea and the schemes have played an essential role in the agricultural sector as a policy instrument. However, there have been some skeptical views on the effectiveness of the direct payment schemes, especially on whether the purpose of the schemes at the time of introduction is still valid. The goal of this study consists of two parts: to evaluate the effectiveness of the schemes and suggest an improvement direction for the current direct payment schemes in the first year and to set up a specific plan, especially for the schemes on rice paddies (Fixed and Variable Rice Direct Payment; FRDP and VRDP) and dry fields (Upland Field Direct Payment; UFDP), considering the results of the first-year study in the second and last year. Research Methodology In this study, several research methodologies are applied depending on the target subjects as below. · Literature review and expert group meetings on the pollution levels of agricultural land and water. · Statistical analysis of farm household economy and food balance sheets · Questionnaires on the status of farm input use, farmers' acceptance rate for the revised cross-compliance, and willingness-to-pay on agricultural multifunctionality depending on whether the consumers get educated about the multifunctionality by using choice experiments. Conclusion and Implication The Farmland Management Direct Payment scheme (FMDP) should include FRDP, UFDP, and some of VRDP and the payments from the scheme are paid to farmers as a reward for providing the agricultural multifunctionality, especially for food security, environmental preservation, and sustainable agriculture. FMDP aims to relieve the unequal distribution of the agricultural budget between direct payments for rice paddies and the others and also eliminate the extra incentive for rice production. The cross-compliance (CC) for FMDP is as follows: First, farmers should preserve their farmland to cultivate crops. Second, farmers should record the use of agro-materials, especially fertilizer and chemicals. Third, farmers should participate in the educational courses about multifunctionality and cross-compliance. Last, dry field farmers should apply some specific agricultural techniques to reduce soil erosion by water. The acceptance rate for the suggested cross-compliance of FMDP is more than 80%, which means the CC of FMDP is acceptable and realizable to farmers. This is because more than 60% of farmers have already recorded their agricultural input use and they recognize that the educational course is useful for not only getting the remuneration of the direct payment scheme but also increasing their agricultural productivity. To estimate the appropriate remuneration ratio between the direct payments for rice paddies and UFDP, the farmer's family labor income and the contribution ratio of those farmlands for annual food supply per capita per day are considered. Based on the results, the remuneration ratio between those two schemes should be the same, considering the benefit-cost efficiency of carrying out the policy, even though the ratio of UFDP is slightly higher in both criteria. To conduct FMDP, it is a prerequisite for taxpayers or interest groups to understand the importance of agricultural multifunctionality and to agree with supporting farmers to provide ‘more’ multifunctionality. To figure out the way for taxpayers to support FMDP, a survey was conducted based on choice experiments. The result shows that the participants who got education about agricultural multifunctionality show a 20% higher WTP for multifunctionality compared to the participants who did not. Researchers: Kim Taehun, Kim Seonwoong, Kim Jongin, and Park Jiyeon Research period: 2017. 1. ~ 2017. 12. E-mail address: taehun@krei.re.kr |
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