90% of shuttered livestock farms sit idle as aging farmers struggle to cash out

As South Korea's livestock farming sector ages rapidly, the barns and facilities farmers have spent their lives building are failing to serve as retirement assets. More than half of farming households plan to sell their farms after retirement to fund their later years, yet only 13.6% actually rely on farm sales or rental income as a primary retirement income source.

According to research published Tuesday by the Korea Rural Economic Institute (KREI), titled "Research on the Growth Foundation of the Livestock Industry in Response to Changes in the Labor Force Structure," the aging rate among livestock farming households stood at 54.1% last year — meaning more than one in two livestock farms is run by a farmer aged 65 or older. That figure has risen 24.5 percentage points from 29.6% in 2010, an increase of nearly 25 points in 14 years.

As the number of elderly farmers grows, so does demand for retirement exits — but livestock facility assets are not changing hands smoothly.

In a survey of 501 livestock farming households nationwide, 52.5% said they hoped to sell their farm to a third party after retirement, making it the most common preference. Yet when researchers looked at what retiring farmers actually rely on for income, farm sales or rental income accounted for just 13.6%.

By contrast, 62.7% said they would depend on private pension plans and personal savings. The researchers concluded that livestock facility assets are not functioning as a viable means of securing retirement funds.

The shortage of successors is equally serious. The survey found that 69.7% of respondent farms have no one capable of taking over operations. Among those without a successor, 67.9% said they have no plans to find one.

The most commonly cited reason for the lack of successors was poor working conditions, named by 65.9% of respondents. Even for farms that do have a potential heir, gift and inheritance taxes were the single biggest obstacle to an actual transfer, cited by 63.8%.

Analysts say the retirement of elderly farmers combined with the absence of successors is ultimately draining liquidity from the livestock industry's asset market.

Using the livestock farm database of the Korea Animal Health Products Association and geographic information system data, researchers found that of the 21,151 Hanwoo cattle farms that closed over the past four years, only 9.2% were subsequently reused as livestock facilities. The remaining 90.8% were in effect left idle.

Meanwhile, new entrants to the industry are not making use of existing facilities — they are building on new sites instead. Of 14,359 newly established Hanwoo farms, 86.4% were located on new sites rather than on the footprint of existing livestock facilities.

As a solution that could address both the retirement support needs of elderly farmers and the barriers facing young farmers, the researchers proposed establishing a "livestock farm bank."

The proposed body would centrally manage information on idle livestock facilities and connect sellers with buyers. Facilities deemed worth preserving would be renovated and leased to young farmers, while those with low economic viability would receive support for demolition and site clearance.

"We need a resource circulation system that can simultaneously support the retirement of elderly farming households and lower the barriers to entry for young farmers," said Song Woo-jin, a research fellow at KREI. "A livestock farm bank could become the core infrastructure for generational renewal and sustaining the growth foundation of the livestock industry."