---
title: "Korea’s fix for illegal farmland leases charges landlords 5% to become legal"
description: "A farmland survey flagged 2.84 million suspect plots; the answer is a state land bank with fees, forms and four staff"
author: "Nate Ledger"
published: 2026-09-29T06:04:55.956Z
modified: 2026-09-29T11:34:59Z
url: https://rews.cc/a/korea-s-fix-for-illegal-farmland-leases-charges-landlords-5--601440
language: en
tags: ["agriculture", "policy", "land", "bureaucracy", "economy", "asia"]
publisher: "Rews (https://rews.cc)"
---

# Korea’s fix for illegal farmland leases charges landlords 5% to become legal

*A farmland survey flagged 2.84 million suspect plots; the answer is a state land bank with fees, forms and four staff*

By Nate Ledger · September 29, 2026 · https://rews.cc/a/korea-s-fix-for-illegal-farmland-leases-charges-landlords-5--601440

## In brief

- A ministry survey classified about 2.84 million farmland parcels, 27% of those examined, as suspected Farmland Act violations
- A Sept 21 fix lets illegal leaseholds become legal if owners entrust land to the state farmland bank, which charges 5% of annual rent
- Farmers are exempt from the fee this year; non-farming owners are not, and landlords can lose tax breaks by formalising leases
- Lease staff average four per branch across 93 branches; one filing took three months; the special cleanup period ends Nov 15
- Farmland pension applications hit 4,988 through August with a 3,688-person backlog; Miryang applicants reportedly wait 10 years

South Korea is running a nationwide survey of farmland, and it turns out that an enormous amount of Korean farmland is farmed, shall we say, informally. The [Ministry of Agriculture’s basic survey, released in July](https://en.sedaily.com/finance/2026/09/29/democrats-move-to-widen-farmland-buyers-beyond-state-land), classified some 2.84 million parcels — about 27 percent of the land examined, roughly 300,000 hectares — as suspected violations of the Farmland Act: illegal leases, unauthorised fallow land, that sort of thing. The [inspection effort itself was substantial](https://www.koreajoongangdaily.com/opinion/the-illusion-of-land-to-the-tiller/12890079), with thousands of personnel and drones dispatched over 2026 and 2027. The point of the law is that farmland should be farmed by the people who own it. The reality is that a great deal of it is owned by people in cities who inherited it and rent it out on a handshake to a neighbour who actually farms.

Farmers reacted to the survey about as you’d expect when the state starts counting things: there were fears that land people had farmed for years could be taken away. So on September 21, the government and ruling party produced a supplementary fix. Customary, technically illegal leaseholds could be converted into legal ones, provided the owner entrusted the land to the farmland bank run by the Korea Rural Community Corporation. Idle plots that were being left fallow because they were landlocked or too steep to farm could also be handed to the farmland bank for management, without being treated as illegal. The farmland bank became, in the telling of the Chosun Ilbo, a kind of master key for all the small, habitual illegalities of rural life.

Then everyone read the fee schedule.

Start with the landlord’s problem. The farmland bank charges the owner a commission of 5 percent of the annual rent, every year, for the service of holding the lease. Farmers are exempt from the fee starting this year, but non-farmers — which is to say, precisely the urban heirs whose handshake leases the scheme exists to legalise — are not. A licensed real estate agent in Gongju, South Chungcheong, told the Chosun Ilbo the fee was hard to justify given the bank neither found the tenant nor did much of anything in the middle, and yet collects more than a property agent’s commission for it. This is a strange business model: the state tells you your informal arrangement is illegal, offers to make it legal, and then charges you annually, in perpetuity, for the privilege of having been legalised.

There is also a tax problem, and it may be bigger than the fee. Owners get a capital gains tax break only if they have farmed the land themselves for at least eight years. Formalising a lease is, from a tax perspective, an announcement that you have not been farming it yourself. One farmer quoted by the Chosun Ilbo put the landlord’s position plainly: “You’re telling me to sign a formal contract with the landowner and bring it to the farmland bank? The owners hate it, worried they’ll lose their tax breaks.” Park Jong-min, 62, who farms in Gongju, had been renting about 10,000 pyeong. Right after the survey began, in June, his landlord said he would farm it himself; Park harvested his garlic and handed the land back. The government runs a reporting centre to protect tenants who get pushed out, but Park knew his landlord, so he let it go quietly. Enforcement schemes that run on complaints work less well in villages where everyone knows everyone.

Naturally, the fee risk flows downhill. A landlord facing a 5 percent annual commission is a landlord thinking about raising the rent. Choi, 62, who lives in Seoul and inherited farmland she lets out to someone in the village for four sacks of rice a year, told the Chosun Ilbo she was already reconsidering what to charge: “I can’t be the only one taking a loss.” The rice, one suspects, is about to get more expensive.

## Four people, 93 branches, 2.84 million plots

Then there is the paperwork. A mobile application exists, but landlord and tenant each need to assemble four or five documents, and elderly applicants often end up hiring an administrative scrivener. One scrivener said he charges 500,000 won for the first plot and 200,000 won for each additional one. So the free government solution to an illegal free arrangement costs, at minimum, a few hundred thousand won in fees before the 5 percent commission begins.

And the queue. The government’s position is that it will accept every lease-entrustment application filed during a special cleanup period running to November 15, across the farmland bank’s 93 branches. A corporation official acknowledged that the staff handling lease work average about four people per branch. Four people. A scrivener surnamed Jeong, 60, told the Chosun Ilbo that when he visited the Yeoju and Icheon branches earlier this month he found newly installed electronic queuing machines, because of the crowds; an entrustment case he filed in June took three months to complete. The deadline for everyone to do this is in about seven weeks.

## Meanwhile, a pension run

One more thing happened while the survey dragged land prices down: farmers stampeded into the farmland pension scheme, which pays a monthly annuity in exchange for posting your land. The logic is a bit like selling at the top, except with paperwork — the annuity is set off the land’s value, so you apply before prices fall further; and farmers who need cash but can’t find buyers are applying too. According to the corporation, applications from January through August hit 4,988, already more than the 3,907 filed in all of last year. The backlog stands at 3,688 people. In Miryang, South Gyeongsang, the budget is so stretched that a new applicant reportedly waits ten years for a turn.

Yang Joon-seok, a professor at Catholic University, offered the summary that will surprise no one who has watched a government improvise: the authorities rushed out fixes to calm angry farmers without preparing them properly, and the pattern — announce first, adjust to the reaction later — keeps repeating. The survey found the problem. The fix found a fee. The fee found the tenant. Everyone behaved rationally, which is roughly how you get a ten-year queue and a brand-new queuing machine.