Evaluation of Public Direct Payment Programs for Agriculture and Rural Communities

Published on July 8, 2024
Published by Economic Industrial Program Evaluation Division, Budget Analysis Department

   Public Direct Payment program for agriculture and rural communities (hereafter referred to as Public Direct Payment program), implemented in 2020 through a reform of the pre-existing Direct Payment program, aims to stabilize farmers' income and promote public functions in agriculture and rural areas. As a key national agenda in the agricultural sector, it (the Public Direct Payment program) has seen its budget increase from 2.4 trillion won in 2020 to 2.9 trillion won in 2024. With further expansion anticipated, now is the time for a comprehensive interim evaluation of the program as it approaches its fifth year of implementation.
   Against this background, this report analyzes the status of the Public Direct Payment program, including its background and history, related laws and policies, and details of the budget and settlement processes. Additionally, the report presents major issues and improvement plans, focusing on the effects of the reform to the Public Direct Payment program and the current status of the program’s implementation and management system.
    Review results indicate that it is necessary to devise ways to improve program performance to better achieve the goals of enhancing income preservation for small and medium-sized farmers and promoting public functions. It also points to the need for developing and reorganizing indicators for more specific performance measurement and evaluation. Additionally, there is a need to quickly establish a national statutory master plan for the Public Direct Payment program, outlining clear mid- to long-term policy directions. This plan should address mid- to long-term goals for the program, measures for securing financial resources, and a performance management system.
    Furthermore, the self-generated revenue for the Public Direct Payment Fund, which supports the Public Direct Payment program, is low, with the majority of funds derived from the Agriculture and Fisheries Structure Adjustment Special Account (hereafter referred to as Special Account). Given the low necessity for flexible operations due to the basic public direct payment-centered expenditure structure, there is a need to develop a plan for integrating the Public Direct Payment Fund into the Special Account.
   In addition, while the government aims to expand the budget of the Public Direct Payment program to 5.0 trillion won by 2027, the recent decline in the program performance and insufficient outcomes underscore the need for a well-considered medium-term expenditure framework.