South Korea about to reform Direct Payment scheme
Korean government outlined a plan to reform the current Direct Payment scheme for agriculture on 24 September 2019. After discussion with stakeholders, the plan will be confirmed in December.
The current rice Direct Payment is a subsidy program only for rice farmers which supports 85% of the gap between production and market prices through fixed DP and variable DP. This scheme has contributed to food security for rice and scaling-up of rice farmers since 2005. However, there has been criticisim that the governmental supports are concentrated on rice farmers, especially large rice farmers, while rice is too much over-produced. 80.7% of total Direct Payment (around KRW 1.4 trillion) was given to rice farmers in 2017.
The new scheme will aim not only at rice farmers but also at all kinds of crop farmers, and will be designed in a way to support smaller farmers more than bigger farms. The Korean government will also create Direct Payments for eco-friendly agriculture and landscape protection, like in the EU. Farmers should comply with requirements for pesticides, fertilizers and waste treatment to receive this subsidy.
Through the reformation, Korean government expects balancing of rice supply & demand, promotion of other crop production and protection of small farmers.