Recently, it is claimed that direct payment for environment-friendly agriculture needs to be made constantly rather than temporarily because environment- friendly agriculture is valued in preserving agriculture environment, and the payment needs to be commensurate with the extent of production technology or use of environment-friendly agricultural materials. Therefore, we need to investigate what environment-friendly agriculture might be worth in terms of agriculture environment preservation, and to analyze exact situation of production cost and income difference according to crops Furthermore, based on the research results, a study to come up with the improvement plan of direct payment systems for environment-friendly agriculture needs to be conducted, which includes the adjustment of payment period and the differentiation of the unit price in direct payment systems considering the income differentials and the level of difficulty in cultivation by crops
Research methods such as literature review, domestic field survey, analysis of the survey results, experts interview, etc. have been used in this study. Literature review includes precedent studies concerning direct payment systems for environment-friendly agriculture and direct payment systems for organic agriculture in foreign countries. And through domestic field survey, the production cost of the farmhouses which are involved with environment- friendly agriculture has been surveyed. And the consumer willingness to pay for the value of environment-friendly agriculture in environmental preservation has been surveyed. And this study involves in-depth interviewing with experts and policy makers in regard to the reform of direct payment systems for environment-friendly agriculture. Based on the research results, the difference in the production cost and income between environment-friendly agricultural farmhouses and conventional farmhouses has been compared and analyzed. And, the willingness to pay has been estimated using the contingent valuation method.
The direction of the reform in direct payment systems for environment- friendly agriculture is as follows.
First, direct payment systems for environment-friendly agriculture need to be revised to ensure the differential rates of subsidy based on the income differentials by crops as well as the higher unit price. For the organically grain crops, the subsidy should be 1.2 million to 1.3 million won per ha, and for the pesticide-free crops, 1 million to 1.1 million won is believed to be appropriate levels. And in the case of culinary vegetables, specific agricultural products, and others which are farmed organically, 1.3 million to 1.4 million won; in the case of organic fruits, 1.5 million to 1.6 million won and for the pesticide-free fruits, 1.4 million to 1.5 million won are desirable.
Second, it needs to provide continual direct payment to the farmers who use organic farming practice in light of the value in the environmental preservation of environment-friendly agriculture. The unit price should be 40% to 60% of the direct payment during the transition period and be offered deferentially based on the income differentials by crops. If it is set at about 60%, 720,000 to 780,000 won per ha can be continually provided for crops; 780,000 to 840,000 won for culinary vegetables, specific agricultural products, and others; 900,000 to 960,0000 won for fruits.
Third, direct payment systems for environment-friendly agriculture hold an important place as a policy program for the spread of organic farmers. In the case of major European countries, direct payment systems are widely used as a method to encourage and promote organic farmhouses, and their financial aid annually increases. In order to steadily develop environment-friendly agriculture as a growth engine of the future agriculture to go with sustainable national development strategy, direct payment systems for environment- friendly agriculture with organic and non-pesticide farming practices need to be continuously improved and supplemented to reflect changes of conditions.


Researchers: Hak-Kyun Jeong, Chang-Gil Kim, Jong-Jin Kim
Research period: 2013. 6. - 2014. 1.
E-mail address: hak8247@krei.re.kr