REVIEW OF KOREAN SMALL FARM ECONOMY WITH SPECIAL EMPHASIS ON FARM SIZE QUESTIONS, INCLUDING ECONOMIES OF SIZE IN PADDY PRODUCTION

In the near future, the land tenure policy in Korea will probably undergo major revision. The task of this study is to examine some of the economic considerations necessary for reformulation of the policies concerning land holding limitations.;A number of general conclusions can be drawn from the analyses: (1) Farm tenancy may be desirable (with some improvements) for Korean agriculture, as long as the lands of off-farm migrators occupy a major share of the land lease market and migrators retain land holdings primarily to provide staple food security for urban households. (2) The ceiling of three hectares on land holdings contributed to the goals of equitable distribution and efficient use of land until the transformation of agriculture led to serious farm labor shortages and beginning stage farm mechanization. (3) According to the approximate economies of size in paddy production in 1979 arrived at by regression analysis, the hectare value for the attainable minimum long-run average cost was approximately the 1.5 hectare land size. (4) Under conditions of expanding off-farm job opportunities and resulting inevitable farm mechanization, trade-offs from equity of land toward efficiency of use may be desired. An equity purpose size limitation needs to change to an efficiency purpose size holding. Otherwise equitable income could improve the human resources of small farmers. (5) A budgeting approach derivation of economies of size relative to machinery technology suggests that the land holding limitation should be expanded from three hectares to, at least, six hectares under mechanized agriculture in order to create efficient use of farm resources in Korea.;Secondary and survey data were used to evaluate land tenure arrangements, equity, and efficiency as they relate to farm size. Also, regression analysis and a budgting approach were used to examine cost-size relationships in Korean small farm rice economy.