1.8 million Agricultural Holdings, Why has they Increased so Much?

Jung, J.Y.; Sun, H.E.; Lee, G.E.; Yang, J.E.; Moon, H.P.

1.8 million Agricultural Holdings, Why has they Increased so Much?

2024

Jung, J.Y. | Sun, H.E. | Lee, G.E. | Yang, J.E. | Moon, H.P.

With the expansion of policy initiatives and support systems for the agricultural holdings, their number has recently increased while the number of farm households continues to decrease. Thus, this study tries to evaluate the factors contributing to the continuous increase of agricultural holdings using the panel regression analysis. We selected potential explanatory variables based on the previous studies and constructed annual panel data during 2018 to 2022 at the county (Si & Gun) level. Our empirical findings indicate that the number of agricultural holdings is significantly related to several factors including the implementation of the public-interest direct payment system in 2020, the introduction of the farmers’ allowance (income subsidy) in most local governments, the local government’s budget for agriculture, and publicly announced land price. More specifically, there was an increase of about 427 agricultural holdings in each county after the public-interest direct payment system was implemented, and an increase of 197 holdings was attributed to the new local subsidy to farmers. These results are consistent with our research hypothesis that the expansion of policy initiatives and support systems for agricultural holdings is associated with a rise in the number of them. To prevent abuse or illegal registration of agricultural holdings, it is necessary to establish more rigorous eligibility criteria for both central and local government support programs. Moreover, classifying agricultural holdings by suitable criteria such as farm sizes or farm income and tailoring policy measures accordingly could be considered.

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