This study reviewed the history of agricultural finance in Korea and showed its implications. Agricultural finance went through a nascent period (1945~1956) after liberation until the establishment of Agricultural Bank, and then went through a system ...
This study reviewed the history of agricultural finance in Korea and showed its implications. Agricultural finance went through a nascent period (1945~1956) after liberation until the establishment of Agricultural Bank, and then went through a system foundation establishment period (1957~1973) when cooperative finance was introduced. The most distinctive financial issues of this period were the expansion of the supply of agricultural policy finance and the introduction of cooperative finance. Also at this time, the farmland security system and the Credit Guarantee Fund for Agriculture, Forestry, and Fisheries were established.
The next period was the period of quantitative growth of agricultural finance (1974~1989) when farm household loans increased rapidly compared to the previous period, and farm household debt increased accordingly. The next period was the agricultural structure improvement period (1990~1999) when the government intensively promoted agricultural investment and loans to improve the agricultural structure. A lot of business failures occurred by administrative agencies, which led to criticism of the agricultural finance policy system. After the 2000s, through reflection and lessons learned, the period of efficiency and specialization of the financial system (2000~2022) was achieved.
And based on the low return on capital, the government introduced a variable interest rate system. And direct financial investment was initiated through the establishment of an agricultural fund. The implications of the study are as follows. First, agricultural financial support is expected to continue in the future. Second, a long-term plan for farmland integration is deemed necessary.
Third, step-by-step qualitative support for young successors is required. Fourth, agricultural funds and innovation financing need to invest on smart farmrelated startups.