In June 2014, the government of Republic of Korea announced a change in private-sector financial support.



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Inception date: 05 Jun 2014 | Removal date: open ended

Financial grant

On 5 June 2014, Ministry of Agriculture, Food and Rural Affairs (MAFRA) designated sorghum, potato, sweet potato, and Korean native calf for the items that are eligible for "FTA compensation for income loss" in 2014. Furthermore, local calf famers are eligible for "compensation for closure". The compensation will be allocated until the end of the year following the applications from the farm. The budget for this measure is KRW 100 billion KRW (ca. 95 million USD). The maximum amount of "compensation for income loss" is 35 million KRW (ca. 33,000 USD) for individual farmer and 50 million KRW (ca. 47,000 USD) for corporation.
Through the "FTA compensation for income loss", 90% of a price decline is reimbursed by the government when all of following three requirements are met;
1) Total import quantity exceeds the criteria (Olympic average of 3 years out of last 5 years (2008-2012)); 
2) Import quantity of the FTA Member State exceeds the criteria (Olympic average of 3 years out of last 5 years (2008-2012) * coefficient for import damage); and 
3) Average price drops below the criteria (Olympic average of 3 years out of last 5 years (2008-2012) *0.9)
In the "compensation for closure", three years of net gain is being preserved by the government when the farmers cultivating or breeding the items eligible for 'compensation for income loss' want to close their farms and meet one of the following requirements: 
1) High investment cost for cultivation or breeding and difficult to collect the investment upon closure; or 
2) Difficult to gain short-term profit because it takes 2 years or longer to cultivate or breed; or 
3) Other needs to provide the compensation for closure

Both compensations are based on the "Special Act On Assistance To Farmers,Fishermen, etc. Following the Conclusion of Free Trade Agreements", which was passed March 2004.