Considerable Number of Agricultural Corporations Engaged in Poor Operations and Subsidy/Tax Benefit Abuse

[Suwon Ilbo=Reporter Seo Dong-young] A considerable number of agricultural corporations have been found to be misusing subsidies and tax benefits intended for nurturing and support, or operating poorly.

According to '2019 Agricultural Corporation Status Survey' data submitted by the Ministry of Agriculture, Food and Rural Affairs to National Assembly member Kim Young-jin (Democratic Party, Suwon District B), who serves on the Agriculture, Food, Rural Affairs and Fisheries Committee, out of 66,877 agricultural corporations registered nationwide, only 29,964 (44.8%) are actually in operation, with more than half found to be non-operational or of unknown location. A total of 24,265 violations of relevant laws including the "Act on Fostering and Supporting Agricultural and Fishery Management Entities" and the "Agricultural Land Act" were recorded, with 18,193 (27.2%) identified after excluding duplicates.

By type of violation, corporations failing to meet establishment requirements such as membership and investment limits, which are subject to corrective orders, were the most common at 12,851 cases (53%). There were also numerous cases subject to dissolution orders: 7,638 cases (31.5%) of long-term dormancy for over one year, and 2,968 cases (12.2%) of business scope violations due to non-core business activities. There were also 709 cases (3%) where less than one-third of business executives were farmers, subject to agricultural land disposal orders.

By region, South Jeolla Province had the most registered agricultural corporations at 12,017 (18%), followed by Gyeonggi Province with 8,773 (13.1%) and North Jeolla Province with 8,412 (12.6%). Among the 12,851 cases identified for failing to meet establishment requirements, those located in South Jeolla Province were the highest at 2,656 (20.7%), followed by North Jeolla Province with 2,118 (16.5%) and South Chungcheong Province with 1,741 (13.5%).

In the 2,968 cases where business scope was not maintained, engaging in lodging and real estate transactions outside agriculture, South Jeolla Province accounted for 536 (18.1%), North Jeolla Province 437 (14.7%), and Gyeonggi Province 430 (14.5%) at the top. Corporations requiring agricultural land disposal were identified in Gyeonggi Province with 148 cases (20.9%), South Chungcheong Province with 111 (15.7%), and South Jeolla Province with 93 (13.1%).

Rep. Kim Young-jin stated, "Looking at the 2019 status survey results, the number of registered agricultural corporations increased by 14,584 (28%) compared to the 2016 survey. Proportional to this increase, the number of non-operational corporations has also grown, and legal violations have generally increased significantly, with abnormal operational cases continuing unabated," and added, "Agricultural corporations must be restructured to be operated in line with their original purpose, and supervisory oversight must be strengthened."