The government projected that if the goal of reducing the rice cultivation area by 80,000 hectares (ha, 1 ha = 10,000 m²) to stabilize rice prices this year is achieved, the average income for farm households will reach 54.35 million won, an increase of 2.6% compared to last year. This is based on the expectation that the oversupply of rice will be resolved, leading to a rise in rice prices, and an increase in income from alternative crops.
The Korea Rural Economic Institute (KREI) held the 28th Agricultural Outlook 2025 on April 16, under the theme 'Preparing for changes in Korean agriculture and rural areas.'
Kim Yong-ryeol, head of the Agricultural Outlook Center at the Korea Rural Economic Institute (KREI), noted during a pre-briefing at the Ministry of Agriculture, Food and Rural Affairs pressroom at the government complex in Sejong that 'If the rice cultivation area is reduced by 80,000 ha, it is estimated to result in a reduction of about 400,000 tons (t) of rice,' adding, 'Consequently, there are several positive factors, including an increase in prices.'
The Ministry of Agriculture, Food and Rural Affairs announced the 'Rice Industry Structural Reform Measures (2025-2029)' in December last year, which centers on reducing the cultivation area. To address the issue of structurally oversupplied rice, the government allocated reductions to local governments. It is considering prioritizing the allocation of public rice stock at a purchase price 7-10% higher than the market price for farms that implement reductions and providing additional support for basic payment amounts in the case of exceeding reductions.
KREI projected that if the reduction of the rice cultivation area is achieved, the agricultural production value this year will reach 60.1 trillion won, which is a 0.1% increase from the previous year. However, if the goal of reducing the rice cultivation area is not met, the production value of food crops will decrease by 0.8% compared to last year, and agricultural production value will decline by 1.3%, KREI added.
The production value of food crops, vegetables, and fruits is expected to decrease by 0.4% from the previous year to 36.1 trillion won. While the production value of food crops such as rice, beans, potatoes, and sweet potatoes is expected to increase by 6.2%, vegetables are projected to decrease by 4.1% and fruits by 1.8%.
The production value of livestock is expected to rise by 0.7% from last year to 24 trillion won. Beef cattle, dairy cows, and pigs are projected to see an increase of 0.9%, while poultry like broilers, layers, and ducks are expected to rise by 0.4%.
Kim noted, 'While the exchange rate is rising, the import prices of feed crops are dropping due to falling oil prices, which significantly reduced fertilizer expenses. Additionally, farming energy expenses have decreased substantially, resulting in a reduction in overall management expenses, thereby improving farm income.'
The income per farm household is projected to reach 54.3 million won, an increase of 2.6% from the previous year. Agricultural income per household is expected to rise by 2.7% to 13.1 million won, while transfer income is predicted to increase by 3.0% to 18.03 million won due to the expansion of agricultural subsidies. Expected non-agricultural income is estimated at 20.69 million won and other income at 2.5 million won.
Kim stated, 'The proportion of subsidies in agricultural income is increasing, indicating a growing role for the government. If the agricultural income stabilization insurance introduced this year is activated in the field, total income could rise.'
Agricultural product exports are projected to increase by 0.6% from the previous year. Including timber and forest by-products, total exports are expected to reach $9.87 billion (approximately 14.36 trillion won).
Imports of agricultural products are projected to rise by 7.9% from the previous year, leading to a trade deficit in agricultural products estimated at $30 billion, a 10.5% increase. This forecast reflects the changing trade landscape in agriculture due to the upcoming inauguration of the 'Trump 2nd Administration' on the 20th.