[Opinion] Brightening the Future of Agriculture through the Farmland Transfer Retirement Payment Project

Kim Geon-gyeong, Director of Damyang Branch, Korea Rural Community Corporation

In recent years, our agricultural sector has faced challenges such as rapid aging and labor shortages. According to Statistics Korea, as of 2023, the proportion of the population aged 65 and over in rural areas has exceeded 40%.

Additionally, due to the migration of young people to urban areas, the rural population continues to decline, weakening the economic vitality and sustainability of rural regions.

According to the 2020 survey on returning to farming and rural areas conducted by the Ministry of Agriculture, Food and Rural Affairs and the Korea Rural Community Corporation, about 40% of returnees to farming cited lack of funds as the biggest difficulty in starting agriculture. A report titled “Support Measures for Young Farmers’ Entry and Settlement in Agriculture” published by the Korea Rural Economic Institute states that 45.3% of young farmers responded that financing issues are their greatest challenge.

This year, the government introduced the “Farmland Transfer Retirement Direct Payment Project” to alleviate these rural problems, supporting the stable retirement of elderly farmers and the successful settlement of young farmers in rural areas.

This project provides monthly direct payments for up to 10 years when elderly farmers (aged 65 to 84) sell their farmland to the Korea Rural Community Corporation or individuals under 65 years old.

The farmland transferred by elderly farmers is preferentially offered to young farmers to enhance agricultural productivity and prepare for the future of agriculture.

Eligibility requires farmers currently aged between 65 and 84 who have continuously farmed for more than 10 years, and the farmland must be paddy fields, dry fields, or orchards located in promoted areas or land readjusted non-promoted areas that have been owned for more than 3 years.

The support amount is 500,000 KRW per hectare per month for immediate sale of farmland, and 400,000 KRW per hectare per month for sale-conditional lease where the land is leased for a certain period before sale.

Through this, retiring farmers can secure retirement funds from the direct payments received over a certain period, and young farmers can acquire the farmland necessary for agricultural management.

However, challenges remain. Lack of awareness about the system and the complexity of the application process act as barriers to the activation of the retirement transfer direct payment system.

For the successful establishment of the Farmland Transfer Retirement Direct Payment Project, it is essential to strengthen various promotional activities such as briefings, consultations, and media campaigns to help farmers understand and participate in the project.

Collaboration with agricultural organizations and local communities is necessary to foster consensus on the necessity of the retirement transfer direct payment system and to encourage farmers’ participation. Additionally, simplifying the application procedures and required documents will make it easier for farmers to access the system. Utilizing computerized systems such as the farmland information system to conduct preliminary reviews with minimal documents and enabling farmland sales and retirement transfer direct payment agreements in a single visit will enhance convenience for farmers.

It is also important to systematically manage farmland transferred through the project and supply it timely to young farmers.

As the first half of 2024 has passed and the second half approaches, it is time to listen to farmers’ opinions on the achievements of the Farmland Transfer Retirement Direct Payment Project over the past six months and identify areas for improvement.

The Korea Rural Community Corporation, local communities, and government ministries should cooperate to establish ongoing communication channels such as public hearings and surveys and promptly implement system improvements.

The Farmland Transfer Retirement Direct Payment Project, which is a five-year pilot project, needs the promotional efforts and system improvements by related agencies and government ministries, as well as the interest of local communities and farmers’ organizations, to successfully settle in farmers’ lives and agricultural policies and to revitalize rural areas as an essential system.

For more detailed information about the Farmland Transfer Retirement Direct Payment Project, consultations are available through the Farmland Bank’s main phone line, the Farmland Bank portal, or the Korea Rural Community Corporation Damyang branch.