The government and the ruling party hold a policy consultation meeting on the 21st to review the progress of a nationwide farmland survey and to discuss ways to improve rules on forced farmland disposal and the imposition of enforcement fines. The move appears to be a rushed effort to prepare supplementary measures as sentiment in farming communities turns restive ahead of the Chuseok holiday. The amended Farmland Act, which took effect on Aug. 28, is built around a framework that effectively requires owners to dispose of farmland if they do not farm it without a legitimate reason or if they lease it illegally. The law has drawn heavy criticism as an armchair policy that stresses the principle of land-to-the-tiller while ignoring conditions in rural areas.
In farming regions, it is common for owners to entrust cultivation to others because of population aging, or to hold farmland acquired through inheritance. With too few people available to farm, selling the land is not easy either, and resistance among farmers is growing. In response, the Presidential Office said on the 17th that "explanation and public outreach were insufficient," offering an explanation to the effect that farmland is not forcibly disposed of merely because the owner cannot farm it. The belated outreach came only after damage to farmers began to mount, with farmland prices plunging on fears that enforcement fines could be levied.
Housing policy has been subject to the same repeated pattern of supplementation and revision. The Ministry of Land, Infrastructure and Transport said on the 17th that it would extend by one more year, to the end of next year, the grace period on the owner-occupancy requirement in land transaction permit zones. The deadline had been set for the end of this year in May, meaning the rule was reworked after just four months. The comprehensive real estate holding tax overhaul saw its basic direction reversed within a month, and the heavier capital gains tax on multiple-home owners was eased three months after being reinstated.
If a government policy has flaws, it is desirable to fix them even after the fact. But when already-announced policies are repeatedly patched up after the fact, the result can be market confusion and declining confidence in policy. A clear example is the triple rally in sale, jeonse (a lump-sum deposit lease) and monthly-rent prices for apartments in the greater Seoul area that followed the announcement of tougher taxation on owners of a single home who do not live in it. The government should listen fully to voices on the ground before it announces policies. Above all, it must abandon the notion that "the government can beat the market." Current property regulations are so detached from reality that most of the minister nominees for the government's second-term cabinet have been branded speculators. Stabilizing housing in the greater Seoul area calls not for patchwork fixes but for a wholesale policy shift, including deregulation.
