While the rice direct payment system contributed to management stability by guaranteeing prices to be received by farms when prices drop, it also exposed limitations such as intensified supply excess and insufficiency in stabilizing income levels of SME farms
Reduced proportion of rice farms created limitations in stabilizing income levels of entire farms * Rice Farms (Proportion to Entire Farms): (2005) 938,000 farms (74%) → (2017) 579,000 farms (56%)
Due to payment system in proportion to land area, the direct payment subsidy was inclined mostly to rice farms, and therefore, the stabilizing function of income levels to other farms and SME farms was less effective * In 2017, rice farms (72%) less than 1ha received 29% while farms over 3ha (7%) received 38% of direct payment
Increased people's demand to public benefitial functions such as environmental conservation, maintenance of community and landscape, etc.
Limitations for current direct payment system's implementation obligation to actively create functions of public benefit * Demand for basic standards such as maintenance of farmland form and functions, and compliance to pesticides and chemical fertilizer standards, etc. * EU: Set various public benefit activities such as water pollution control, animal habitat protection and proof of pesticide management record (application time, target crop and usage) under mutual compliance obligation
B. Implementation Plan
Review the current direct payment system that focuses on rice into public benefit type
Review direct payment system so that it no longer takes preference over rice and large farms but stabilizes income levels of farms growing other crops and SME farms and strengthens public benefitial functions
Integrate rice (fixed and variable), field and conditional direct payment where the payment conditions and unit costs vary into a single direct payment system and give out an equal amount regardless of the crop type or price - Pay a set amount (default direct payment) to small farms regardless of the business size, and give preference in payment per land area to smaller businesses - Strengthen ecosystem and environment related obligations in order to promote public benefit * (Example) Farms: Restore farmland by using rice straw, etc., eliminate ecology disrupting plants, and build ecological waterways and pools Communities: Jointly collect agricultural wastes, clean near reservoirs, and plant aquatic plants
Based on the discussion from direct payment review consultative group participated by farmers' groups and professionals, provide detailed implementation measures, amend the act (first half of 2019), and enforce such amendment in 2020 * Tasks for Review: Recipient requirements for default direct payment, payment standard, unit cost system, upper limit to land area for direct payment, implementation inspection system, compliance design and standard, etc.
Implement supplementary measures to encourage early settling of reviewed direct payment system
Support 55,000 ha of rice paddies (2019) that grow crops other than rice (2018, 30,000 ha)
Provide institutionalizing measures to market stabilizing vehicle in the harvesting season that controls production adjustment depending on rice supply and demand, market isolation and discharge under manuals (second half of 2019) * When the direct payment system is reviewed, due to decreased cultivation area of rice, the rice price is expected to stabilize, but provide market stabilizing vehicle to resolve unrest of large farms - Set proper price ranges and adjust market isolation and discharging volumes depending on price and supply and demand conditions to improve predictability in the market
Build production and distribution basis for major crops and expand clients to help crop conversion of rice farms
Build cultivation complexes, mechanize crops other than rice (2017: 58% → 2022:75%) and improve drainage
Minimize TRQ increase, expand governmental purchase (whole purchase of rice paddy beans, introduction of wheat stockpiling system, etc.) and expand consumer basis such as military or school meal services, etc.