The purpose of this paper is to analyze empirically the factors affecting farmland prices in Korea. This paper performs a panel data analysis of farmland price determination processes involving both fundamental and non-fundamental factors. Unlike previous studies, we make use of individual farmland-level cross-sectional data. The data are categorized by area, agricultural development area, outside of agricultural development area, and area designated for development. The main findings of this study are summarized as follows. First, the empirical evidence revealed that the effects of rice price on farmland prices are large in agricultural development area compare to other areas. Second, the results also indicate that the effects of farmland rent on farmland prices are largest in agricultural development area among all areas. Third, interests rate is negatively related to the farmland prices. Forth, we also found that non-fundamental components(e.g., development possibility) play an important role in understanding farmland prices.