Focusing on the late 1920s to the mid‐1930s, this paper determines and analyses the societal conditions and structures leading to the immiseration of Korean farmers during the colonial period. Specifically, these were the deterioration of aspects of traditional society, indebtedness, and interest rates. These led to wide‐scale smallholder bankruptcies, resulting in their transformation into landless tenants, and ultimately resulting in a bifurcation into the “haves” and the “have‐nots” in the Korean countryside.