Agriculture ministry's 2027 budget tops W22tr in record jump

The Ministry of Agriculture, Food and Rural Affairs will exceed 22 trillion won ($16 billion) in its budget for the first time next year, with the proposed spending plan marking the largest increase — both in absolute terms and as a percentage — since 2000. Public-interest direct payments will surpass 3 trillion won for the first time, and the rural basic income program will be extended to 35 counties. Farm safety nets, including agricultural disaster insurance and a new price-stabilization scheme, will also be strengthened. Separately, the government plans to repay 3.1 trillion won in accumulated debt across four agricultural funds and merge the farmland management, agricultural price stabilization and FTA funds into a single body to be called the Agricultural Development Fund.

The ministry said the 2027 budget and fund management plan was approved at a Cabinet meeting Tuesday.

The ministry's proposed budget for next year stands at 22.22 trillion won, up 10.4 percent, or 2.09 trillion won, from this year's 20.14 trillion won — the largest increase in both rate and amount since 2000. The ministry's budget has climbed steadily, from 18.34 trillion won in 2024 and 18.74 trillion won in 2025 to surpass 20 trillion won for the first time this year, and will now rise into the 22 trillion won range next year.

The total fiscal commitment grows even larger when the 3.1 trillion won repayment of off-budget fund debt is included. The government plans to settle 3.1 trillion won in accumulated liabilities across the farmland management, agricultural price stabilization, FTA and livestock development funds next year. Adding that repayment, the combined fiscal outlay reaches 25.31 trillion won — 25.7 percent, or 5.17 trillion won, more than this year's agriculture ministry budget.

The public-interest direct payment program, the cornerstone of farm income support, will grow from 2.97 trillion won to 3.06 trillion won, crossing the 3 trillion won threshold for the first time. The basic payment rate for non-promoted upland fields will rise 25 percent — from 1.38 million to 1.5 million won per hectare to 1.7 million to 1.87 million won — closing the gap with paddy fields. Strategic crop direct payments will increase from 419.6 billion won to 456.8 billion won, and 3,000 hectares of green-manure crops will receive new support to achieve a practical fallow effect.

A new agricultural price-stabilization scheme will be introduced for the first time to compensate farmers when crop prices fall sharply. Under the program, farmers will receive full or partial compensation for the difference when average prices for major crops fall below a reference price; 9.1 billion won has been allocated. The public seasonal labor program will expand from 130 to 200 sites, and 10 additional dormitories for agricultural workers will be added.

The ministry will also concentrate spending on climate-related agricultural disasters. Support for crop disaster insurance and related programs will rise from 776.9 billion won to 831.3 billion won, and 7.7 billion won will fund a new quasi-insurance scheme for crops that are difficult to cover under standard insurance. Farmers' occupational accident insurance will expand from 95.6 billion won to 122.8 billion won, raising coverage to the level of industrial accident insurance. The budget for upgrading pumping stations to guard against drought will surge more than tenfold, from 24.6 billion won to 250.9 billion won.

The rural basic income program is set to be one of the most dramatically expanded initiatives in the rural sector next year. The program currently covers 17 counties at a cost of 304.7 billion won, including this year's supplementary budget. Next year it will extend to 35 counties — roughly half of the 69 counties designated as population-decline areas — with funding rising to 1.17 trillion won. The national government's share of funding will also increase from 40 percent to 50 percent. The government will make its first-ever contribution of 200 billion won to the rural mutual cooperation fund.

The ministry will also begin deploying significant resources to bring AI into actual farming operations. Some 20.8 billion won has been newly allocated to move physical AI beyond the research stage and into real agricultural settings. The ministry plans to establish 15 AI farm-equipment sharing centers where autonomous tractors and other machinery can be used collectively, and will distribute 210 agricultural robots to farms and joint farming cooperatives. An additional 44.1 billion won will go toward new smart livestock complexes that consolidate and scale up aging livestock facilities using AI and information and communications technology.

The ministry is also restructuring the architecture of agricultural finance itself. It plans to merge three of the seven funds it currently manages — the farmland management fund, the agricultural price stabilization fund and the FTA fund — into a single body tentatively named the Agricultural Development Fund. The government intends to push through the necessary legislation within the year.

The consolidation is driven by deteriorating fiscal conditions. As of August, the combined balance of public fund deposits across the farmland management, agricultural price stabilization, livestock development and FTA funds stood at around 3.1 trillion won, with annual interest costs estimated at around 120 billion won. As each fund's own revenue has shrunk while spending has grown, debt has piled up, and the walls between funds have made it difficult to redeploy surplus resources flexibly in response to new policy needs, the ministry said.

The new Agricultural Development Fund will retain existing revenue sources — including farmland conservation charges, tariff-rate quota import levies and loan principal and interest repayments — while adding a legal basis for transfers from the agricultural special account. At the time of consolidation, all accumulated past debt will be cleared, and any shortfall expected to arise in 2027 will be covered using surplus funds from the agricultural special account. The fund will operate as a single account combining resources, programs and assets, with statutory provisions to ensure that the core programs of the existing funds are not diminished.

Agriculture Minister Song Mi-ryeong said the ministry would "faithfully invest the fiscal capacity secured through increased agricultural special tax revenues to address the challenges facing agriculture and rural communities and to prepare for the future." She added that the ministry would "work to secure and supplement the budget needed for agriculture and rural areas to the fullest extent possible during the National Assembly review process, so that the changes can be felt on the ground."