In order to reduce the farmers’ burden of purchasing agricultural machinery and address the shortage of farm workers, the government have been promoting agricultural machinery rental service since 2003. Despite of political purpose, the outcome of agricultural machinery rental service turned out to be adverse, high cost and low efficiency, by the pork barrel projects operated from some municipalities. Therefore, this study was aimed to improve the efficiency of agricultural machinery rental service by analyzing the operation status of agricultural machinery in local government. A questionnaire survey was conducted at 134 cities and counties in terms of rent type, management personnel, business budget, agricultural machinery ownership, rental performance, use rates, operational problems, and improvement plan. This study found that some agricultural machinery rental offices were only focused on the short-term rental service, which caused the increasing number of operating personnel, required facilities/equipment. The short-term rental service has a limitation for promoting the mechanization rate in dry-field farming. Therefore, it should be carried out along with the long-term rental service which a lessee maintains and manages agricultural machinery directly. Furthermore, the reasonable number of agricultural machinery based on regional circumstances should be considered to meet rental demand and collect the minimal rental fee for purchasing new agricultural machinery and replacing old ones.