Farm policy gains pile up, but farmers still anxious about the future

KREI evaluates achievements including rural basic income pilot and four agricultural laws; income rose but outlook index fell — 'on-the-ground impact must improve'

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The government has been accelerating its shift in agricultural policy — revising four key farm laws and launching a rural basic income pilot — but farmers say they have yet to feel any real improvement in their day-to-day conditions.

A report published Saturday by the Korea Rural Economic Institute (KREI), titled "One Year Since the Launch of the People's Sovereignty Government: Achievements and Challenges in Agricultural Policy Reform," found that despite measurable policy gains, conditions on the ground as experienced by farmers have not improved.

According to KREI, over the past year the government laid the groundwork for a state-led agricultural policy by revising what are known as the four agricultural laws — the Grain Management Act, the Agricultural and Fishery Products Distribution and Price Stabilization Act, the Agricultural and Fishery Disaster Insurance Act, and the Agricultural and Fishery Disaster Countermeasures Act — and by enacting the Essential Agricultural Materials Support Act. The revisions established a legal framework for rice price stabilization mechanisms and an agricultural price stabilization scheme, and strengthened support for farm and fishery disaster relief. The government also pursued a rural basic income pilot program, the development of "sunshine income villages," the expansion of smart farming, and the cultivation of young farmers.

Some results are already visible. The combined population of the 10 counties participating in the rural basic income pilot rose 4.7 percent, with 43 percent of new arrivals coming from the Greater Seoul area and nearby major cities. The youth population in those areas grew 6.2 percent, suggesting that regions at risk of demographic collapse may be able to attract new residents.

Trends in farm household income and the income conditions outlook index [Korea Rural Economic Institute]

But the reality farmers see looks somewhat different.

A survey of field correspondents that KREI operates nationwide to track rural conditions showed that the farm household income outlook index fell from 92.44 in the fourth quarter of last year to 88.27 in the first quarter of this year. The farm household income conditions index dropped from 100.14 to 97.71 over the same period. Readings below the baseline of 100 indicate that more respondents hold a negative view of future agricultural conditions.

KREI said the results suggest a gap may exist between policy achievements and what farmers actually feel on the ground.

"It appears that growing concerns about rising operating costs — partly driven by instability in the Middle East — have had an effect," said Kim Tae-hu, a research fellow at KREI. "Anxiety about future business conditions, more than actual income levels, seems to be reflected in the outlook index."

Agricultural product prices remain low while production costs continue to climb, worsening sentiment among farm households. The government also faces the dual challenge of stabilizing farm income while keeping consumer prices in check.

"In the short term, it is important to develop a range of measures to stabilize farm operating costs," Kim said. "Policies that reduce the burden of production expenses — including agricultural inputs and fuel — should take priority."

KREI identified securing a stable funding base as a key challenge ahead. Full implementation of major programs — including the agricultural price stabilization scheme, the Essential Agricultural Materials Support Act, and the rural basic income — will require substantial fiscal outlays. The rural basic income in particular is on track for a nationwide rollout in 2028 after the pilot phase, but if the relevant legislation takes effect, annual costs are estimated at roughly 5 trillion won (approximately $3.27 billion).

KREI warned that if policy achievements cannot be translated into improvements that farmers actually feel, the impact of state-led agricultural policy will remain limited. Expanding income stabilization measures that farmers can tangibly experience was identified as the next priority.

adastra@heraldcorp.com