Financial regulators are launching a comprehensive investigation into farmland-backed loans across all financial sectors. The Ministry of Agriculture, Food and Rural Affairs plans to begin a complete survey of all farmland nationwide as early as this month to identify cases of speculative use. While the ministry has conducted annual surveys on a portion of farmland, this marks the first time it will examine all agricultural land for potential legal violations.
According to financial industry sources on the 2nd, financial authorities plan to review farmland-backed lending practices by sector from this month through May. The Financial Supervisory Service had originally planned to examine mortgage loans issued to sole proprietors, but has now added farmland-backed loans to the scope of investigation.
Authorities will determine whether individuals are using farmland-backed loans to circumvent household lending regulations such as the debt service ratio (DSR) and loan-to-value (LTV) requirements. Industry observers note that just as sole proprietor loans have been identified as a workaround for mortgage restrictions, similar practices likely occurred with farmland-backed lending.
The investigation will also review whether collateral valuations for farmland-backed loans are being conducted properly. A financial regulatory official explained, "When issuing farmland-backed loans, lenders require documents such as farmer certification, but the key question is whether the borrower is actually farming. We decided to examine farmland-backed loans alongside business loans."
The agriculture ministry will also focus initially on verifying whether landowners in the Seoul metropolitan area—where speculation risk is highest—are actually engaged in farming. The capital region's high development demand has led many to acquire farmland through regulatory loopholes for capital gains rather than agricultural purposes. The Farmland Act strictly limits farmland acquisition and ownership by non-farmers, in accordance with the constitutional principle that farmland should belong to those who cultivate it.
President Lee Jae-myung previously criticized the situation sharply, stating, "Farmland management in our country is in complete disarray. Hasn't farmland become just another target for speculation?"
The ministry's comprehensive farmland survey is a follow-up measure to these concerns. A government official noted, "Pressure on real estate is intensifying."