This study aims at three goals. First, it examines if farmland conversion will lead to quantitative problems in the future. To achieve this goal, the results of farmland conversion in the past and the present are analyzed. Then, the demand of farmland conversion in the future is forecasted through taking several variables into consideration. Second, this study reviews the five causes of farmland conversion including the demand-side factor, institutional factor, land price factor, location factor, and supply-side factor. Third, this study reviews the positive and negative effects of farmland conversion by understanding its influence on farmland, farmers, local areas, and farmland systems.
This study consists of six chapters as follows. The first chapter is the introduction of the study, followed by the chapter two summarizing the history and evolution of farmland conversion-related systems, the contents of the current system, and its problems. Chapter three reviews the achievements and challenges of farmland conversion and its prospects. Chapter four examines aforementioned five factors as the causes of farmland conversion. Chapter five explains the effects of farmland conversion on farm management scale, farmland price, farmhouse asset, local economy, and farmland system. Finally, chapter six is the summary of this study, addressing the problems of the proposed elements in the causes and effects of farmland conversion. Their policy directions are also summarized.
This study is summarized as follows. From 1975 to 2011, 542,000㏊a of farmland had decreased. Of those, 350,000㏊ decreased by farmland conversion. The annual average size of farmland conversion is estimated to decrease from 17,000㏊ (2007-2011) to 10,000㏊ in 2020. Nevertheless, it still accounts for a large amount, compared to the total farmland areas. The demand of non-farming lands such as urban land and industrial land is generally known to be the reason for the farmland conversion of large areas. In addition to this, however, other various factors also exist. Institutionally the farmland which is extremely less expensive than existing urban land can be converted into non-farmland in all areas. After farmland conversion, its land price surges by at least two to three times, consequently leading to high profit. On the other hand, the compensation for farmland preservation is very little. In some rare cases, proposed business is not allowed without the farmland conversion in certain areas. In addition, currently it is challenging to maintain the farming production due to the low income, the old age of farmers, and few farming successors.
The positive effects of farmland conversion may include nonfarm income, increasing assets, job creation, tax revenue, and increased population. However, such cases are rare. Rather, the farmland and the natural scenery close to the converted farmland are damaged or contaminated. Even farming work can be interrupted by the farmland conversion. Furthermore, as farmland prices increase due to the expectation of farmland conversion, the ownership of speculative farmland is expanded. Also, it becomes difficult for farmers to purchase farmland with farm income. Consequently, non-farmers’ ownership of farmland and farmland leases expand.
Therefore, this study suggests the direction of policy as follows: ① establishing the principle of restrictive construction and the planned development, ② distributing small-scale farmland conversion and prohibiting farmland conversion in the agricultural development region, ③ reinforcing the redemption of development profit and the compensation for farmland preservation, ④ strengthening the screening of farmland conversion approval, and ⑤ promoting the integrated use of farmland, the organizational management, and the management of agricultural corporations.

Researchers: Seok-Doo Park, Gwang-Seok Chae
Research Period: 2013. 1～2013. 10
E-mail Address: sdpark@krei.re.kr