&#91EDITORIALS&#93Badly-designed farm aid

A part of the farm support project that the government is designing has been released publicly. It includes a plan to cut the interest rates on government loans to farmers and extend their maturity, a conventional measure. The steps, if they show up in legislation, would be the new administration’s first response to economic pressures on the farm.
We must support domestic farmers, who are frustrated and concerned about the potential impact of the global trade liberalization talks, the Doha Development Agenda. Korea needs bilateral free-trade agreements as well, so the government has to come up with plans to restructure domestic agriculture.
But we think the Roh administration is on the wrong track in focusing, as did past administrations, on easing farmers’ debt loads. There have been numerous such programs; the Kim Dae-jung administration came up with six in its five-year term. After the Uruguay Round of World Trade Organization free-trade talks were concluded, the government has poured trillions of won into farm supports; most of that has been to reduce farmers’ debts. But the conditions in farm villages have continued to deteriorate, and farmers are more heavily in debt than they ever were. In other words, past debt programs have failed.
Past administrations went too far in cutting debts in order to win votes or to soothe angry farmers; that has led only to worse conditions in the countryside and to tempting moral hazards as well. Farmers say it would be foolish not to take out loans from the government. An absurd situation is created when those who pile up debts are better off than those who farm efficiently.
The government should end this vicious circle. Farm support should no longer be regarded as synonymous with the rescheduling or writeoff of farmers’ debts. To cope with the world trend of market opening, which is irreversible, the administration should design a comprehensive farm support program to reinforce the competitiveness of farmers when agricultural markets open. If the government and farmers fail to end their bad past practices, they will collapse together.