ABSTRACT
The South Korean government provides public subsidies to agricultural sector to protect farm income and the economic wellbeing of farm households and to assure food security in South Korea. South Korea is one of top OECD countries providing public subsidies. Public subsides (or government payments) are the main source of income for farm households in South Korea. Using data from the Farm Household Economy Survey (FHES), South Korea (2008–2012), and unconditional quantile (UQR) regression, this chapter assesses the impact of public subsidies (government subsidies) on farmland valuation. Results reveal that public subsidies have a significant effect on farmland values and are uniformly positive across all quantiles. Results also indicate that a 10% increase in public subsidies to agriculture increases farmland value between 1% and 1.5%. Finally, public subsidies capitalization rate varies by farm type and regional location of the farm.
