농외소득 상한기준을 활용한 공익직불금의 생산 비연계 검증

Abstract

The Public Direct Payment Scheme was introduced as a decoupled income support policy while enhancing the public functions of agriculture and rural areas. However, since its implementation, debates have persisted over its potential connection to production, probably resultign in oversupply of rice and falling prices. Empirical studies examining the actual effects of public direct payments on production remain limited. This study analyzes the impact of public direct payments on farmers’ agricultural production activities by applying a regression discontinuity design (RDD), using the off-farm income threshold (KRW 37 million) as the cutoff criterion. The analysis employs five years of raw data from the Farm Household Economy Survey (2018–2022), dividing the sample into two pre-implementation years and three post-implementation years. Land area and labor hours, the key production factors, were set as dependent variables in our RDD experiments. The empirical results reveal that, after the scheme's introduction, beneficiary households experienced greater reductions in rented land area and hired labor hours compared to non-beneficiaries. These findings suggest that public direct payments may function as transfer income substituting for farm income, thereby partially reducing incentives to invest in production inputs. However, the magnitude of these effects is minimal, yielding results that are more consistent with the view that the scheme is production-neutral and largely decoupled from farm production decisions. By empirically examining the linkage between the scheme and production using the off-farm income threshold as the cutoff, this study provides a useful foundation for future reforms and policy evaluation of direct payment schemes in agriculture.