|
Farm Household Economy Improved Due to Agricultural Income Increase
2186
|
|
|---|---|
| Writer | KREI |
| Date | 2016.06.22 |
 The Korea Rural Economic Institute (KREI) conducted an additional analysis of the results of the "2015 Farm Household Economy Survey" announced by Statistics Korea on May 24, and evaluated that the farm household economy has gradually recovered with 2015 farm income of 37.21 million won, up 6.5% from the previous year, even under unfavorable domestic and overseas circumstances. The urban-rural income gap ratio (the farm income rate compared to urban workers' household income) is 64.4%, continually improved from 57.6% since 2012. Agricultural income was a factor that improved the farm household economy, increasing by 9.3% from the previous year and accounting for 42.1% of the total farm income increment. Transfer income including the government's direct payments grew by 15.9% compared to the previous year, reaching 48.0% of the total farm income increase. Agricultural income in a broad sense, including transfer income related to agricultural production (farm subsidies such as direct payments), was 12.92 million won, 45% of the farm income increase. As a result of the analysis, KREI drew policy implications as follows. First, the income of large-scale, full-time farmers who are key to Korean agricultural production rose greatly. An analysis of large-scale professional farmers who are 40s-50s with over 2.0 ha of farmland shows that their farm income increased by 7.9 million won to 67.8 million won, up 13.2% from the previous year, maintaining a stable growth rate higher than the average of total farm households. These farm households' agricultural income rose by 11.5% from the previous year, accounting for 44.3% of the farm income increase. And their agricultural income takes up 50.1% of their farm income. Due to the high dependency on farming, the policies for strengthening agricultural competitiveness are expected to be effective. It is analyzed that one of the main reasons for the rise in their agricultural income is a reduction in operating costs because of the drop in oil prices and lowered agricultural policy interest rates. Particularly, because the government's marketing structure improvement and the future growth industrialization policy seem to be relevant, incomes of professional fruit and livestock farms will be analyzed further. The expansion of direct payments, including fixed direct payments for paddy farming (increased from 0.7 million won/ha to 1 million won) and fixed direct payments for fields (payment target items were expanded to all items), seems to support rice and upland crop farms' incomes, so an additional analysis of them will also be conducted. Second, transfer income grew greatly due to public subsidy support such as the government's direct payments. On the average of total farm households, non-agricultural subsidies including pensions, unemployment compensation, and basic senior pensions significantly rose by 21.0% compared with the previous year, But an analysis of rice farm households, major beneficiaries of agricultural direct payments, shows that their agricultural subsidies among public subsidies increased by 17.4%, different from average farm households, contributing to a rise in transfer income more. Rice farm household transfer income is 9.17 million won, 1.26 million won higher than 7.91 million won of the average farm household, and accounts for 35.8% of farm income, higher than the average farm household's 21.2%. Third, for old small farmers aged 60 and over with less than 1 ha, government policies for welfare support are important. Transfer income takes up a high proportion (31.6%) of these farmers' income, and non-agricultural subsidies among public subsidies account for 85.1% of their transfer income, indicating the large effects of government welfare support policies. With aging in rural areas intensified, the government's welfare support policies including national pension premium support and farmland pensions would be effective. Moreover, because non-farm income takes up a high proportion of farm income of farm households with less than 1 ha, measures to enhance non-farm income are effective. Therefore, it is needed to strengthen welfare policies for old small farmers, develop ways to earn labor income through various rural jobs and side jobs related to the sixth industrialization. and stably implement a policy for non-farm income not to depend on the economy. KREI President Kim Chang-gil said that the analysis results of the farm household economy might be linked with the Park Geun-hye administration's diverse policies for income and management stabilization, and is planning to hold a seminar for relevant specialists, local governments, and farmers in order to discuss the direction for developing related policies. |
|
| Attach | |