S. Korea to fine unlawful recipients of rice subsides

SEOUL, Oct. 17 (Yonhap) -- The South Korean government said Friday that it will
look into past rice subsidy records to ferret out unlawful payments and slap
stiff fines on non-farmers who made false requests.
The move comes after Seoul pledged to tighten screening to prevent non-farmers
from receiving subsidies following a revelation that a number of government
officials and lawmakers may have pocketed money earmarked for rice growers.
"A nationwide probe will be conducted from December through March for payments
handed out in the past three years starting in 2005, with reviews to be
concentrated on people whose addresses do not match or are far from the rice
paddies they own," the agriculture ministry said.
As of last year, 107,000 people who requested rice growing subsidies lived
considerable distances from their paddies.
The government said that it is taking steps to revise rules that would ban people
from receiving farm subsidies for five years if they are found to have made false
claims.
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 being paid rice subsidies surfaced
when a report by the Board of Audit and Inspection claimed that a significant
portion of the 998,000 people who received rice farming subsidies in 2006 were
"non-farmers." Of those, about several thousand were listed as government
employees or employees of state-run corporations.
The government handed out 1.62 trillion won worth of rice farming subsidies in
the year, the state watchdog said.
Vice Health Minister Lee Bong-hwa, who is facing calls for her resignation in
connection with the scandal, 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 just 700,000 won per hectare, landowners requested the subsidies in order to
avoid paying heavy property taxes.
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 as high as
30 percent of profits earned.