[EDITORIALS]Capital-intensive farmingThe abolition of the ceiling on ownership of farmland signals a dramatic change in the government's agricultural policy and land policy. Agriculture faces big challenges in advance of an expected full market opening that will include the sensitive rice market.
Korea's agricultural foundation is crumbling, and market opening is only one of the reasons. The farming population is declining and the average age of farmers is rising. Almost a quarter of the farming population is more than 65 years old, and nearly half of all rice paddies are leased to other farmers. If the local agricultural sector does not achieve economies of scale and if farmers do not incorporate to attract more capital, its productivity will plummet.
Another method of drawing more capital into the agricultural sector is by allowing the sale of farmland to investors. The government took such a step, scrapping the principle that only farmers can own farmland and allowing urban dwellers to own up to 990 square meters.
Abolishing all limits on ownership of agricultural land by nonfarmers will also boost economies of scale in dry-field farming. Only 5,000 households are now cultivating more than 5 hectares of dry fields; that is less than half a percent of all farm households. If agricultural corporations can be formed and put more money into farming, productivity will rise.
The policy changes are directly linked to the sea change in agricultural markets, so a failure to set practical policy goals could wreak havoc on our farmers. In particular, a hasty easing of rules on the use and development of farmland may create devastating disturbances in rural communities. The government needs to keep a close eye on such problems that may come with deregulation. In fact, city dwellers' demand for farmland is high only in areas adjacent to large cities, and is low in more remote areas. The government should see to it that property speculators do not take advantage of "weekend farmland." The government will also have to resist the inevitable pressure for relaxation of rules banning the conversion of farmland for other uses, which could lead to uncontrolled development.