The off-farm income cap for South Korea's farm subsidy program, frozen for 17 years, will rise by 10 million won. About 10,000 farmers previously excluded because their non-farm income exceeded the threshold are expected to newly qualify for payments.
The Ministry of Agriculture, Food and Rural Affairs said on the 26th that it had issued a revised notice adjusting the income limit for area-based subsidy payments in this way.
The off-farm income cap is the threshold that determines eligibility for subsidies based on comprehensive income earned from work or business outside farming. Currently, farmers with non-farm comprehensive income of 37 million won or more are excluded from area-based subsidy payments. The threshold was set in 2009 based on the average household income of 36.74 million won in 2007, the most recent statistic at the time, but it has been frozen for the 17 years since, drawing criticism that it fails to reflect rising prices and incomes.
In response, the government revised the Public-Interest Direct Payment Act on May 12 this year, requiring the agriculture minister to set the off-farm income cap every five years within a range of 43 million won or more, taking into account household income statistics. As a follow-up measure, the ministry set the new threshold at 47 million won, reflecting factors such as the median income and average annual growth rate of single-person working households over the past five years.
The change does not raise the per-unit subsidy payment but eases the income-based exclusion criteria. Previously, farmers with off-farm income of 37 million won or more could not receive subsidies, but now farmers earning between 37 million won and less than 47 million won will also be eligible.
Area-based subsidy payments vary by the location and scale of the farmland. The current payment rate ranges from 1.36 million to 2.15 million won per hectare. For one hectare, paddies and dry fields in designated agricultural promotion zones receive 2.15 million won, paddies outside such zones receive 1.87 million won, and dry fields receive 1.5 million won. The per-hectare rate declines as the cultivated area grows.
The raised threshold applies to those who apply to register for this year's area-based subsidies. Although the official effective date of the notice is November 13, the new standard will apply starting from this year's subsidy payments.
Based on last year's applicants, the ministry estimated that about 10,000 farmers would receive an additional 9.9 billion won in area-based subsidies in total. A simple calculation puts the average at around 990,000 won per person.
Kang Dong-yun, director-general for rural income and energy policy at the ministry, said the change was significant because the off-farm income cap for public-interest direct payments had been raised to 47 million won for the first time in the 17 years since it was introduced. Kang added that the measure was expected to further strengthen the income safety net for farming households.
