The Ministry of Agriculture, Food and Rural Affairs said on the 1st it will push to establish an "agricultural development fund" by combining farmland management, agricultural product price stabilization, and free trade agreement (FTA) funds. The ministry operates seven funds, and it aims to integrate three of them to execute money more efficiently. The agricultural development fund is expected to reach 6.3 trillion won next year.
In principle, a fund spends within the scope of its income. There are partitions among funds, so even if money remains in another fund, it cannot be taken at will. Because of this, when circumstances change rapidly and unexpected money is needed, the Ministry of Agriculture, Food and Rural Affairs has borrowed from the Public Capital Management Fund (PCMF), which is managed by the Ministry of Economy and Finance. The interest the ministry's three funds pay annually on money borrowed from the PCMF is estimated at around 120 billion won.
But once integrated, the partitions among the three funds disappear. Money to be borrowed from the PCMF will decrease or be eliminated, saving interest. The ministry also plans to use The Special Tax for Rural Development as a financial source for the agricultural development fund if its money runs short; the tax is an earmarked levy collected to strengthen the competitiveness of agriculture and fisheries.
The ministry plans to enact related laws within the year to create the agricultural development fund. A ministry official said, "We will lay the groundwork to continue key policy projects without disruption, which had faced concerns about expenditure cuts due to insufficient resources," adding, "The scope for changing fund operation plans among projects will widen, enabling a swift response to pending issues."