Farm ministry to tighten monitoring of rice subsidy payments

SEOUL, Oct. 16 (Yonhap) -- The agriculture ministry on Thursday said it will tighten screening to prevent non-farmers from receiving subsidies following confirmation that several officials and lawmakers may have pocketed money earmarked for rice growers.

It said the measures will be concentrated on people whose addresses do not match
or are far from the rice paddies they own.
A local panel made up of at least five people, including government officials,
heads of villages and farmers' groups will be tasked with checking if the people
who requested the subsidies actually work in the paddies.
"They are to physically check each paddy that may have an absentee landowner who
is using others to grow rice, but nevertheless requested subsidy payments," a
farm ministry official said, adding that the inspections by the panel will
determine if money will be given.
The ministry, in addition, said it will work with regional administrations to
implement measures to compel people to repay state subsidies already received if
they did not actually work in the paddies. The subsidies are handed out by
regional governments.
Under existing rules, only people who actually produce rice -- not landowners --
are eligible to receive the subsidies that are provided as a social security net
for rural areas, which have lower income levels than cities. If absentee
landowners request the subsidies, farmers who did all the work are left
empty-handed.
The controversy surrounding absentee landlords getting rice subsidies surfaced
when a report by the Board of Audit and Inspection claimed 170,000 out of the
998,000 people who received rice farming subsidies in 2006 were "non-farmers." Of
those, about 4,400 were listed as government employees, while 6,200 worked for
state-run corporations.
Non-farmers received a total of 168.3 billion won (US$129.0 million) in that year
-- more than 10 percent of the 1.62 trillion won given in 2006, the state
watchdog said.
Related to this, Vice Health Minister Lee Bong-hwa apologized early this month
for having applied for the rice subsidy, while Rep. Kim Hack-yong of the ruling
Grand National Party also expressed regret for receiving the money.
Experts said that while the average amount received by the 170,000 non-farmers
was very small at 700,000 won per hectare, some landowners requested the
subsidies to avoid taxes later.
Under South Korea's tax law, a person who farms a piece of land for more than
eight years is exempt from paying capital gains tax if he or she sells the
property later.
Depending on the price of the land, capital gains tax rates can reach around 30
percent of profits earned.