정보공개
Farmland Banking
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Farmland Banking
Purpose
- To make the effective size of agricultural business, utilize farmland efficiently, improve the agriculture industry, strike a balance in the farmland market and ensure stable income of farmers through various farmland policy initiatives with the aim to promote economic and social development of agricultural industry and farming villages
* Applicable Law: Korea Rural Community Corporation and Farmland Management Fund Act
Functions by initiative
| Initiative | Function |
|---|---|
| Consignment of Farmland Rental (2005) | Consign rental of farmland in difficulty of self-management and lease to full-time farmers to seek efficient use of farmland |
| Acquisition of Business Recovery Farmland (2006) | Acquire farmland of farms under management crisis, repay debt with disposition price and guarantee rental and resale rights of the acquired farmland to assist normalization of management |
| Farmland Pension (2011) | Under the collateral farmland under ownership of senior farmer, provide living cost in the form of monthly pension to assist stable retirement |
| Tailored Farmland Support (2018) | Classify growth stage of farm by business size and year in operation and provide customized farmland supports in each stage to assist stable farming basis of young farmers and back-to-earth farmers |
Tailored Farmland Support
- (Purpose) To classify growth stages of farms by business size and years in operation and provide tailored, staged farmland support with the aim to establish a foundation for young and migrant farmers
① Acquisition of Public Rental Farmland: Acquire farmland owned by farmers but not used for farming and its management due to movement, job change, old age, disease, inheritance, etc.
- Acquired Farmland: Farmland in agricultural development area (rice paddy, dry field and orchard)
- Acquisition Target: farmers who own farmland but do not use it for farming and its management due to movement, job change, old age, disease, inheritance
- Acquisition Price: Appraised value
※ Acquired farmland is kept under ownership and leased to full-time farmers and startup farmers in the long term.
- Lease Targets: Young agricultural entrepreneurs from farm succession, farmers in their 20s and 30s, farm successors, those who migrated for farming and other farmers
- Maximum size of lease: 4ha (applied differently according to farming experience and scale)
- Fund of KRW 2,361.6 billion and farmland of 5,083ha accumulated by 2020
② Farmland Sales: Acquire farmland from non-farming households, full-time and retired farmers and sell to trainees to nurture as full-time agriculture workforce, full-time farmers and farming corporations
- Acquisition Target: Paddy fields, fields within the development area, or cultivated rice fields outside the area, or fields on which a field improvement project has been completed
- Sell Target: Trainees to nurture as full-time agriculture workforce (Young agricultural entrepreneurs from farm succession, farmers in their 20s and 30s, farm successors, those who migrated for farming), full-time farmers, farming corporations, etc.
* Condition: 1% annual interest rate, fully amortized over 11 - 30 years
* Increase in upper limit: Rice paddy and dry field KRW 35,000/3.3㎡ (Or KRW 45,000/3.3㎡ for first-time acquisition of farmland support)
※ Increase in unit price for farmland acquisition support in 2015: Rice paddy KRW 30,000/3.3㎡, dry field KRW 35,000/3.3㎡ → rice paddy and dry field KRW 35,000
※ Increase in unit price for first-time farmland acquisition support in 2018: Rice paddy and dry field KRW 35,000/3.3㎡, rice paddy and dry field KRW 45,000/3.3㎡ acquisition → Rice paddy and dry field KRW 36,000/3.3㎡, rice paddy and dry field KRW 46,000/3.3㎡ acquisition
③ Leasing: Lease out farmland owned by retired farmers and those who moved to other industry on a long-term (5 - 10 years) to trainees for nurturing agricultural professionals, full-time farmers and agricultural corporations
- Leased Farmland: Rice paddy and dry field in agricultural and fishing areas according to Framework Act on Agriculture, Fishing, Rural Community and Food Industry and Article 3 of Framework Act on Fisheries and Fishing Villages Development.
- Lease Target: Same as disposition target
* Support: Zero interest rate, fully amortized over 5 - 10 years (lease rate from common practices)
④ Exchange of agricultural land: Support difference from exchange of agricultural land, and settlement payment for group substitution of land
* Condition: 1% annual interest rate, fully amortized over 10 years
※ Farm scaling business interest rate decreased (2% → 1%) from January 1, 2014 (Also applicable to existing loans)
2021 budget: KRW 770.3 billion
- Purchase of farmland for public lease (6,944), farmland sales (534), lease (224), exchange (1.7)
Farmland Acquisition for Business Recovery
- (Overview) To acquire farmland of farmers with business difficulty due to natural disasters and debts, and allow them to repay debts with disposition money to normalize the business
- Target
- Targets: Agricultural business entity (agricultural corporation) with 50% or more disaster damage or KRW 30 million or more debts and 40% or more debt to asset ratio
- Selection: based on the level of business crisis and possibility of recovery
- Acquisition target: Farmland (rice paddy, dry field and orchard) and agricultural facility (fixed greenhouse, stable and mushroom grower)
- Support Condition
- Acquisition Price: (Farmland) Appraised value, (Facility) Appraised value at termination (7 - 10 years) of lease period
* Support Limit: KRW 60,000/㎡, Less than 100% debt amount (KRW 1 billion for farmer, KRW 1.5 billion for agricultural corporation) - Rental Fee: (Farmland) Less than 1% of acquisition price, (Facility) 1% of facility acquisition price
- Lease Period: 7 years with possibility to extend within 3 years after appraisal
* Extension of Lease Period Considering Recovery Ability of Farm (July 2009): (Previous) 5 years → (Present) 7 years - Resale Price: (Farmland) Amounts calculated from appraisal value or interest rate (3%) whichever is lower, (Facility) Initial acquisition price
- Acquisition Price: (Farmland) Appraised value, (Facility) Appraised value at termination (7 - 10 years) of lease period
- Improve institutions to increase redemption rate
- (2016) Decreased interest rates for divided payments (fixed 2.0%, floating rate), partial resales permitted to area equivalent to over 50% of supported amount when requested, extended divided payment period (amortized over 3 years after lease period, over 30% initial repayment), call redemption policy, etc.
- (2017) Introduced an incentive system for paying debt before maturity
- 2021 budget: KRW 297.9 billion (1418.5ha × KRW 210 million)
- 827 farms annually (Average of supported farms from 2018 to 2020)
Consigned Farmland Lease
- (Project Overview) Farmland Bank consigns the lease of farmland from farmland owner in difficulty of self-cultivation and manages lease (non-budget project)
- Consigned farmland is long-term leased to full-time farmers for 5 years or more to guarantee stable agricultural business of tenant and promote agricultural scale improvement
* If consigned for over 8 years at farmland bank, the farmland is recognized as business land and exempted from heavy transfer income taxes (16% - 52% tax base; pay 6 - 42% tax base)
- Consigned farmland is long-term leased to full-time farmers for 5 years or more to guarantee stable agricultural business of tenant and promote agricultural scale improvement
- Condition
- Farmland: Acquired and owned by individuals after implementation of Agricultural Land Act (1st January1996) according to Article 2 of Agricultural Land Act (including greenhouses and mushroom growers, etc.) or Farmland acquired and owned by individuals or businesses after implementation of Agricultural Land Act
* In principle, lease and loan of use of farmland acquired after the enforcement of Agricultural Land Act (January 1, 1996) are prohibited, but lease is permitted only if consigning to Farmland Bank (Article 23 of Agricultural Land Act) - Consignment Fee: (Lease) Charge 5% of annual rental fee each year, (Loan of Use) Charge KRW 100,000 per case at the time of contract
* Lease: Consignment fee of around 10% (8 - 12%) was decreased to 5% since January 1, 2014
Loan of Use: Consignment fee of KRW 200,000 per case was decreased to KRW 100,000 per case since January 1, 2011
- Farmland: Acquired and owned by individuals after implementation of Agricultural Land Act (1st January1996) according to Article 2 of Agricultural Land Act (including greenhouses and mushroom growers, etc.) or Farmland acquired and owned by individuals or businesses after implementation of Agricultural Land Act
- Lease Conditions
- Lease Target: Farmers intending to use farmland for agricultural business with preference to those in their 20s and 30s, trainees for fostering agriculture professionals, agricultural corporations and farm successors
- Rental Fee: Determine by consultation between contracting parties considering the level of rental fees in the neighborhood
* This cannot exceed the average rental fee in the area. (Determine by investigating and deliberating the upper limits for farmland rental fees until November 30 of the previous year.)
- (Progress) From 2005 to 2020, 148,051ha was consigned, and 147,908ha was leased to 270,381 farms in the long term. (0.55ha per farm on average) The following are functions by project (Project name, function)