Ministry of Agriculture lacks authority to directly sanction or track follow-up action; lawmaker Moon Dae-rim pushes to mandate dissolution and grant minister direct petition rights

Democratic Party of Korea lawmaker Moon Dae-rim. [Yonhap]
Democratic Party of Korea lawmaker Moon Dae-rim. [Yonhap]

Agricultural corporations caught engaging in real estate activities — which they are prohibited from doing — numbered 279 over the past four years, yet the government lacks the authority to directly petition for their dissolution, leaving a significant blind spot in efforts to crack down on speculative farm entities.

According to results of a Ministry of Agriculture, Food and Rural Affairs survey on agricultural corporations submitted to Democratic Party of Korea lawmaker Moon Dae-rim of the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee on Tuesday, violations of permitted business scope by agricultural corporations totaled 272 cases last year. Of those, 27 involved breaches of the ban on real estate activities.

Since regulations restricting agricultural corporations from engaging in real estate were introduced, violations of permitted business scope from 2022 through last year totaled 2,374 cases. Of those, 279 — or 11.8 percent — involved real estate prohibition breaches. The annual breakdown was 154 cases in 2022, 40 in 2023, 58 in 2024 and 27 last year.

Under the current Act on Fostering and Supporting Agricultural and Fisheries Business Entities, an agricultural corporation that operates outside its permitted business scope may be subject to a dissolution order. A mayor, county chief or district mayor may petition a court for dissolution, after which the court may order it following a hearing.

The problem is that even when the Ministry of Agriculture, Food and Rural Affairs identifies violations through its surveys, it cannot directly petition for a corporation's dissolution. Current law states only that local government heads "may" petition a court for dissolution, leaving the decision entirely to their discretion.

As a result, if a local authority declines to act — whether out of its own judgment or workload concerns — an agricultural corporation caught violating the real estate ban can continue to operate unchecked. There is also no legal basis for the ministry to determine whether local governments have followed through on administrative measures.

Agricultural corporations account for roughly 0.2 percent of farmland owners, numbering about 11,540, but speculation in farmland through corporate entities has been a persistent problem. A common scheme involves establishing an agricultural corporation to purchase farmland near planned development sites, then splitting and reselling ownership stakes.

The Ministry of Agriculture, Food and Rural Affairs recently unveiled supplementary measures to its comprehensive farmland survey, classifying real estate activities by agricultural corporations as speculative conduct and imposing disposal orders on the farmland in question.

Moon is pushing to amend the Act on Fostering and Supporting Agricultural and Fisheries Business Entities to close the regulatory gap. The proposed changes would make it mandatory — rather than discretionary — for local governments to petition for the dissolution of agricultural corporations, and would also grant the agriculture minister the authority to petition courts directly.

"If agricultural corporations that have abused farmland as a tool for speculation are caught but no follow-up action is taken, the purpose of the comprehensive survey cannot be fulfilled," Moon said. "We will respond firmly to farmland speculation while making the targets and requirements for action clear, so that farmers and agricultural corporations who farm diligently are not burdened unnecessarily."


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