"Dangerous if not farming directly"... Surge in Farmland Bank entrustment as 27% of land classified as suspected Farmland Act violations

As a result of a nationwide survey conducted on farmland, the movements of farmland owners are changing rapidly as a significant portion of the surveyed land is classified as suspected of violating the Farmland Act. Along with the government's intensive investigation, the reward money for reporting violations has been significantly increased, leading to simultaneous movements to report illegal farmland leases and a demand to incorporate farmland into the institutional system.

27% of farmland classified as suspected violations... Reporting reward increased 10-fold to 15 million won

According to a video by Jeolsemi-nam_SemusaTVISeongho, a recent nationwide survey of farmland found that out of 10.13 million parcels investigated, approximately 27%, or 2.84 million parcels, were classified as farmland suspected of violating the Farmland Act. The most common reason for illegal activity was illegal leasing (over 21%), followed by unauthorized fallow land and illegal conversion. In the case of Jinan County, Jeonbuk, detailed investigations are being conducted by region, with as many as 32,000 parcels classified for in-depth investigation out of the 5,174 parcels subject to the first-stage basic investigation.

The government will conduct in-depth field investigations targeting these suspected violation farmlands. In particular, the 'Farmland Investigation Division', which will be dedicated to farmland investigation and institutional improvement, will be newly established in September with a staff of 14 to directly handle the execution of the nationwide survey and institutional improvement. The investigation method is also changing. Moving away from past paper-based investigations, precise investigations will be carried out in parallel using drone footage, AI analysis technology, and satellite data to identify changes in farmland use patterns or the presence of illegal buildings in real time. KAMCO and Korea Rural Community Corporation plan to identify illegal changes in use by comparing annual aerial footage through drone footage and AI analysis technology.

The reporting reward system has also been significantly strengthened. Following the amendment of the Enforcement Decree of the Farmland Act, the annual upper limit for reward money for reporting violations has increased approximately 10-fold from the existing 1.5 million won to 15 million won. In the past, rewards were paid only when the case reached the punishment stage, but the scope has been expanded so that rewards can be paid even when administrative measures are finalized. Illegal farmland leasing is also included as a target for reporting rewards, which is expected to strengthen the constant monitoring system by the public. The video explained that since, due to the characteristics of rural areas, nearby residents know best whether actual cultivation is taking place, the increased reward will serve as a clue to induce constant monitoring by the public.

Farmland Bank lease entrustment contracts surge 77.5%..."Incorporation into the institutional system"

Following the announcement of the investigation results, farmland owners are rapidly increasing lease entrustment contracts through the Farmland Bank to prepare for administrative measures such as enforcement fines. According to the video, the number of entrustment contracts received by the Farmland Bank from May 18 to July 31 of this year increased by 77.5% from 14,000 cases during the same period last year to 25,000 cases this year. In terms of area, it surged by 84.9% from 4,590 hectares to 8,480 hectares. This significant increase occurred over a short period of just two and a half months.

This phenomenon is interpreted as a movement by farmland owners to legalize existing private lease relationships through the Farmland Bank to avoid the risk of illegal leasing. According to a Farmland Bank official, about 90% of lease entrustment applications are made in a form where they are applied for together with the existing lessee. This reflects the intention to move existing private relationships into the state-managed institutional system by applying together with the tenant who is already farming, rather than the landowner applying arbitrarily. It is explained that the government's purpose is also not to allow farmland to be disposed of arbitrarily, but to manage it so that farmland is used according to its purpose within the institutional system.

Discussion on reform of capital gains tax reduction for 8-year self-cultivated farmland... Transition to 'Management-oriented farming'

The center of gravity in farmland policy is increasingly likely to shift from 'whether direct cultivation occurs' to 'appropriate use according to the purpose of the farmland'. This reflects the reality that as of 2024, the proportion of agricultural business owners aged 65 or older reaches approximately 69.7%, and 60-80% of major agricultural work is entrusted to others. Accordingly, rather than 'cultivator-oriented management' where one simply operates agricultural machinery directly, a transition to 'management-oriented' policies—that is, policies centered on actual agricultural production—is being discussed.

Accordingly, an amendment plan for the capital gains tax reduction regulations for 8-year self-cultivated farmland is being discussed in the National Assembly of the Republic of Korea and the Ministry of Agriculture, Food and Rural Affairs TF. Currently, if the 8-year period is not met, there is no reduction benefit at all, but in the future, a plan to apply the reduction amount in proportion to the actual cultivation period is being considered. Additionally, proposals are being made to reflect objective usage status, such as entrusting to the Farmland Bank for more than 10 years, in tax benefits, and opinions are being presented to differentiate benefits by subdividing the cultivation period into 8, 12, 16, and 20 years. This is intended to incentivize faithful cultivation for those farming.

However, the video specified that these tax reform plans are not yet finalized laws. As of September 7, 2026, matters such as the abolition/reform plan for the 8-year self-cultivated farmland capital gains tax reduction, the establishment of a comprehensive farmland DB, and the creation of a dedicated farmland management organization are matters being discussed in the National Assembly of the Republic of Korea, the Presidential Committee on Agriculture, Fisheries and Rural Policy, and the TF. Therefore, caution is needed against making hasty decisions such as disposing of farmland out of concern for the abolition of reduction benefits, and it was noted that the contents may change during the future legislative process.