FTA Fund: 700 Million Won Provided to Affected Farmers, 6.4 Billion Won Spent on Media Promotion... Investigation by Democratic Party Lawmaker Lim Mi-ae

Survey Results from the Past 3 Years
Reevaluation of Excessive Promotional Expenses

The FTA Fund was established to support domestic farmers in case of damages caused by FTA agreements. However, it has been revealed that over the past three years, only 700 million KRW was actually provided to affected farmers, while 6.4 billion KRW was spent on media promotion. The amount spent on media promotion is nine times higher than the support provided to farmers. There is criticism that the fund, which was created to support farmers, is instead being used to benefit media companies.

According to data submitted by Democratic Party lawmaker Lim Mi-ae (proportional representative) from the Ministry of Agriculture, Food and Rural Affairs on the 26th, the total amount of FTA damage compensation direct payments over the three years from 2021 to 2023 was 720 million KRW. The FTA damage compensation direct payment is a system in which the government compensates a portion of the income loss for farmers who suffer damages due to increased agricultural imports following the implementation of an FTA. However, a look at the actual payment status shows that the amount of support provided recently has been minimal.

Democratic Party member Mi Ae Lim

In 2021, 610 million KRW was paid for oats, with about 3 million KRW provided per farm. In 2022, there were no items eligible for damage support at all. Last year, support was provided for ginger, totaling 110 million KRW, with only 120,000 KRW per farm.

Despite the significant damages felt by farmers due to low-tariff imported agricultural products resulting from FTAs, the reason for such a small amount of support is the strict criteria for assessing damages. The requirements for triggering direct payments are: the total import volume must exceed the average year, the import volume from FTA partner countries must increase compared to the reference import volume, and the price of the target item must fall below 90% of the average year. All three conditions must be met for payment to be possible.

However, since the Russia-Ukraine war, international grain prices have surged and overall prices, including agricultural products, have risen due to the climate crisis. As a result, even if imports of agricultural products from FTA countries increase, it is difficult to meet the requirement of a price drop of more than 10% compared to the average year. For this reason, many farmers are unable to receive proper support even though they are suffering damages from the import of low-priced agricultural products under FTAs.

On the other hand, over the past three years, a total of 8.3 billion KRW was spent from the FTA Fund for FTA education and promotion, which is intended to enhance farmers' adaptability and competitiveness. Of this, only 1.9 billion KRW was spent on 25 cases of education that actually benefited farmers, while 6.4 billion KRW was paid to media companies for purposes such as promoting cases of competitive farms under FTAs, over 90 cases in three years. In other words, more of the FTA Fund is leaking to media companies unrelated to farmers than being directly used to support farmers themselves.

In particular, the major media companies Chosun, JoongAng, and DongA each received an average of 170 million KRW per year, which is significantly higher than the average price of 20-30 million KRW for agricultural specialty media. The reason given is the addition of video programs, but the total amount of promotion fees received by these three major outlets over three years amounts to 1.6 billion KRW. Although payment is said to be based on open bidding, the fact that there is no unit price guideline by media company and that promotion fees continue to be paid to certain outlets is also seen as a problem. The unit price set for a single article by these major media companies reaches 13 million KRW, which is 108 times the compensation direct payment per farm last year.

Democratic Party lawmaker Lim Mi-ae emphasized, "It is a reversal of priorities and highly inappropriate that more funds are being provided to media companies than to farmers from a fund created to support farmers affected by FTAs. As many farmers are still suffering from indiscriminate imports of agricultural products, the criteria for FTA damage compensation direct payments should be made more realistic so that farmers can receive sufficient support, and excessive media promotion expenses that do not fit the purpose of the fund must be reviewed."