Shockwaves from a farm subsidy scandal continue to reverberate throughout the country. Taxpayers are getting angrier with about 46,000 civil servants and employees of state-run corporations who illegally received subsidies set aside for rice growers. In total, 280,000 of 998,000 subsidy recipients are found to have illegally benefited from the compensation scheme. They pocketed 168 billion won ($120 million) in 2006 alone. But the scandal is only the tip of the iceberg.
Public pressure is increasing for the government to overhaul the whole farm subsidy programs, long believed to have wasted taxpayers' money, while doing little to improve the competitiveness of the local farming sector. It is surprising that the government has provided 127 trillion won ($90 billion) in financial support to farmers over the last 15 years. The astronomical amount of state aid had been designed to help farmers recoup losses from the opening of markets to foreign imports.
Under the rule of former President Kim Young-sam in 1993-98, 48.6 trillion won was given to farmers in compensation for losses arising from the conclusion of the Uruguay Round of multilateral trade liberalization talks. Then, the Kim Dae-jung administration injected 40.9 trillion won into the agricultural sector to help farmers cope with the unprecedented Asian-wide financial crisis. And the Roh Moo-hyun government spent 37.5 trillion won in support of farmers following the rice market opening and the ratification of a free trade agreement (FTA) with Chile.
The Roh administration also established a 119-trillion-won package to assist farmers in preparation for the Korea-U.S. FTA up to 2013. About 75 percent of the package, or 89.2 trillion won, will be cash aid for farmers. Thus, there are growing concerns that non-farmers or unqualified farmers might illegally benefit from the support programs. No one can make sure that such a rice subsidy scandal can never erupt again.
The portion of farm subsidies to the entire support for the agricultural sector stood at 56.5 percent in 1993-98. But it jumped to 74.4 percent under the rule of Kim Dae-jung and 74.8 percent between 2003 and 2008. The increase reflected the fact that past governments granted more and more subsidies to farmers, apparently for political purposes to garner their support. Critics say those support programs are nothing but ``agro-populism," creating a misconception that subsidies are up for grabs.
It is no longer news that many farmers ― even non-farmers ― have obtained huge sums of subsidies in illegal attempts to operate gas stations, cafes, karaoke bars or other entertainment facilities. Misguided policies and illegal acceptance of subsidies and other state aid have led to the waste of taxpayer's money, aggravating the nation's agricultural competitiveness.
Now is the time for the Lee Myung-bak administration to entirely reform farm support programs in order to save taxpayers' money as well as sharpen the competitive edge of the agriculture industry. First of all, the government should put an end to agro-populism, which ruins the farming sector and fuels corruption among civil servants and other ineligible recipients.