A push to amend the law and widen the pool of buyers for farmland reflects mounting rural discontent over the government's comprehensive survey, along with a judgment that existing measures alone cannot reverse falling prices and shrinking transactions.
Average actual transaction prices for farmland nationwide fell 34.3% to 53,518 won per square meter last year from 81,434 won in 2021, according to the Korea Rural Community Corporation. The figure slipped further to 50,085 won in the first seven months of this year. Transactions also dropped 49.6% from 2021 to 149,230 parcels last year, with only 89,768 parcels changing hands from January through July this year. "Owners looking to dispose of land they have retired from or inherited cannot find buyers, while young farmers cannot readily commit because farming income is not enough to cover purchase costs and loan interest," a political official said.
Aging in rural areas and the small scale of farm operations are cited as factors that could widen the supply-demand imbalance further. Data from Statistics Korea released the same day showed that people aged 65 and over accounted for 51.0% of the population in farming, forestry and fishing households last year, up 9.0 percentage points from five years earlier. Cultivated area per farm household stood at 0.87 hectares, the smallest in the 65 years since 1960. Farm households with annual sales of agricultural and livestock products below 10 million won made up 73.9% of the total. The structure could become entrenched: demand to sell land is rising as older farmers retire or pass it on through inheritance, while the capacity to buy is constrained by small holdings and low profitability.
Within the ruling party, there is a view that unblocking such stalled transactions through government funds alone would be difficult. A basic survey released by the Ministry of Agriculture, Food and Rural Affairs in July identified 2.84 million parcels, or about 300,000 hectares, as suspected of violations. Applying the average transaction price for January through July this year to that entire area puts the purchase cost above 150 trillion won by simple calculation — roughly 93 times the 1.617 trillion won budgeted for Farmland Bank purchases this year. The Farmland Bank is not obliged to buy all of it, but the figures indicate that acquiring even a portion of the suspect parcels would require substantial funding. The government says it has so far only narrowed down sites for on-site verification based on administrative records, and that in-depth investigation is needed to determine actual violations and their scale.
As a result, discussion in political circles is focusing on having other organizations share the selling demand the Farmland Bank cannot absorb. The core of a farmland act amendment that Rep. Song Ok-joo of the Democratic Party of Korea plans to introduce is a designation system for "farmland holding rationalization corporations." Under the system, the agriculture minister or a provincial governor would designate qualifying nonprofit corporations and allow them to buy, hold and lease farmland. Local government-funded corporations and consumer cooperatives engaged mainly in agricultural product distribution would be eligible.
If the amendment passes, these corporations would connect owners seeking to sell farmland with people entering farming. Land they acquire would be supplied first to young farmers and returnees to farming. The central and local governments could subsidize part of the interest on purchase loans. In return, the corporations would have to obtain annual approval for their plans on farmland acquisition and leasing, support for young farmers and financial operations, and undergo performance evaluations. Using farmland for purposes outside the public interest could result in sanctions including revocation of designation.
"We need to create a structure in which land held by absentee landowners and older farmers can be disposed of smoothly, and farmers can use it stably without buying it directly," Song said. "There is a need to institutionalize public-interest ownership and leasing arrangements."
Nonghyup, the national agricultural cooperative federation, is also being mentioned as an alternative. A report titled "Improving the Farmland System and Nonghyup's Response," published by Nonghyup this month, concluded that state purchases and stockpiling alone have limits in ensuring stable preservation and management. The report proposed that Nonghyup either own land directly for public-interest purposes only or invest in a separate corporation, in a structure covering purchase through management and leasing. It also cited a role for Nonghyup in drawing on its knowledge of local conditions to identify land put up by older and retiring farmers and supply it to young and tenant farmers.
A bill allowing Nonghyup limited farmland ownership has already been submitted to the National Assembly. The farmland act amendment introduced in January by Song and 10 other lawmakers would let Nonghyup acquire farmland only for certain purposes such as joint farming and environment-friendly agriculture. It also includes a provision requiring that land not used for such projects for three months or more be disposed of to the Farmland Bank or similar bodies within one year.
For now, the government is focusing on easing fears that the comprehensive survey could lead to blanket forced sales. On the 21st of this month, the government and the ruling party announced follow-up measures distinguishing clear cases of speculation from customary violations in rural areas. Even where fallow land or leasing violations are confirmed, owners will first be given a period to correct the problems voluntarily, and those unable to do so on their own will be allowed to entrust leasing and management to the Farmland Bank, deferring any obligation to dispose of the land. The government is also reviewing special legislation to underpin the measures and an expansion of the budget for farmland purchases.
