Penalties Tighten for 'Nailong Farmers' Who Waste Subsidies

Strengthened Punishment for False and Fraudulent Registration
Fines Up to 1 Million Won
→Fines Up to 5 Million Won
New Registrations Restricted for 1 Year

It has been revealed that more than 230 cases of so-called 'Nailong farmers'?those who registered as agricultural operators without actually farming?were detected last year alone. To prevent such false and fraudulent registrations, the government has strengthened penalties by imposing fines that leave a criminal record instead of administrative fines.

On the 16th, the Ministry of Agriculture, Food and Rural Affairs and the Ministry of Oceans and Fisheries announced that, with the enforcement of the amended "Act on the Fostering and Support of Agricultural and Fishery Management Entities" starting from the 17th, the registration and management of management information for agricultural and fishery management entities will be reinforced.

The agricultural and fishery management entity registration system is a system that registers management information of farmers and corporations seeking subsidies related to agriculture, fisheries, and rural areas to establish efficient agricultural and fishery policies and ensure transparent financial execution. As of January this year, 1.96 million agricultural and fishery management entities are registered (1.83 million in agriculture, 50,000 in forestry, and 80,000 in fisheries).

Since agricultural management entities constitute the vast majority, cases of fraudulent registration are also concentrated in agriculture. According to the Ministry of Agriculture, Food and Rural Affairs, the number of administrative fines imposed due to false or fraudulent registrations of agricultural management entities increased from 87 cases in 2021 to 201 cases in 2022, and 229 cases last year. The ministry believes that the number of false registrations surged after the direct payment system, which compensates farmers' income, was expanded and reformed into the Public Interest Direct Payment system in 2020.

Accordingly, the amendment significantly strengthened penalties for false registrants. Previously, those who registered or changed agricultural and fishery management information fraudulently were subject to administrative fines of up to 1 million KRW, but from now on, penalties will be strengthened to criminal fines of up to 5 million KRW. In addition, although registrations are canceled ex officio when fraud is detected, there was no regulation restricting re-registration, which allowed immediate re-registration. To address this issue, a 'one-year new registration restriction' rule has been introduced.

Those who falsely verify agricultural and fishery management entities will also be punished. The amendment stipulates that village heads or neighborhood leaders who are requested to verify or provide evidence of farming or other facts of agricultural and fishery management entities must verify or certify the data truthfully. If they verify or certify the data fraudulently, administrative fines of 250,000 KRW for the first violation, 500,000 KRW for the second, and 1 million KRW for the third will be imposed.

Legal grounds for the registration criteria of agricultural and fishery management information have also been established. Until now, the system was operated based on internal guidelines of the National Agricultural Products Quality Management Service, the registration agency. The enforcement decree now sets registration criteria for agricultural and fishery management information, requiring actual production of crops with sales records or operational performance in agriculture to be eligible for registration. To improve the accuracy of registration information and eliminate registrations by non-agricultural persons, on-site investigations will be conducted annually.

However, the strengthened penalty provisions to block false registrations by non-agricultural persons will be applied from August 17, following a six-month grace period.

A Ministry of Agriculture, Food and Rural Affairs official said, "We have codified the registration criteria for agricultural and fishery management information and strengthened penalties against those who register fraudulently or falsely. We expect this to prevent fraudulent registrations by non-agricultural persons and ensure that benefits such as national subsidies go to those who are genuinely engaged in agriculture and fisheries."