The South Korean National Agricultural Cooperative Federation (initialized as NH (in Korean, derived from NongHyup) or NACF) was established in 1961 to enhance the social and economic status of its membership and to promote a balanced development of the national economy. Its role is divided into three areas:

marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...

and supply,

banking A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

and

insurance Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...

, and extension services.

Terminology

Although literally referring to local member cooperatives, the term ''nonghyup'' is used by

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...

ns to describe both a local cooperative (Korean:농협) and the NACF (Korean: 농협중앙회).

History

* 2012 - NACF restructured into a federation with two holding companies, to increase effectiveness and competitiveness * 2011 - Ranked ninth largest cooperative by the International Cooperative Alliance * 2011 - Opened NH Residential Hall to accommodate 500 students from farming households * 2011 - Launched 50th anniversary emblem and slogan * 2008 - Ranked third largest cooperative by the International Cooperative Alliance * 2008 - Opened International Banking(IB) center * 2007 - CHOI Won-Byung inaugurated as

chairman The chairperson, also chairman, chairwoman or chair, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the grou ...

of the NACF * 2006 - Hosted the 37th World Farmers’ Congress of the

International Federation of Agricultural Producers The International Federation of Agricultural Producers (IFAP), (french: Federation Internationale des Producteurs Agricoles (FIPA)) was an organization that advocated on the international level for member farm organizations. Established in 1946 ...

(IFAP) * 2006 - Launched NH Investment and Securities after the acquisition of Sejong Securities * 2005 - Introduced the

CEO A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especially ...

system for each business division * 2004 - Launched the "New Rural Community and New Agricultural Cooperative" campaign * 2004 - Established Nonghyup Culture and Welfare Foundation * 2002 - Co-founded NH-CA Asset Management, Ltd. with the French

Crédit Agricole Crédit Agricole Group (), sometimes called La banque verte ( en, The green bank) due to its historical ties to farming, is a French international banking group and the world's largest cooperative financial institution. It is France's second lar ...

* 2001 - Hosted the

International Co-operative Alliance The International Co-operative Alliance (ICA) is a non-governmental co-operative federation or, more precisely, a co-operative union representing co-operatives and the co-operative movement worldwide. It was founded in 1895 to unite, represent an ...

(ICA)

General Assembly A general assembly or general meeting is a meeting of all the members of an organization or shareholders of a company. Specific examples of general assembly include: Churches * General Assembly (presbyterian church), the highest court of presby ...

* 2000 - Launched the integrated NACF, consolidating the federations of agricultural, livestock, and

ginseng Ginseng () is the root of plants in the genus ''Panax'', such as Korean ginseng ('' P. ginseng''), South China ginseng ('' P. notoginseng''), and American ginseng ('' P. quinquefolius''), typically characterized by the presence of ginsenosides an ...

cooperatives * 1998 - Acquired ISO 9002 certification for the NACF brand

Kimchi ''Kimchi'' (; ko, 김치, gimchi, ), is a traditional Korean side dish of salted and fermented vegetables, such as napa cabbage and Korean radish. A wide selection of seasonings are used, including ''gochugaru'' (Korean chili powder), sprin ...

, which was designated the official food for 1998 Olympics * 1995 - Founded the Korea Agricultural Cooperative Marketing, Inc, a subsidiary for produce distribution and sales * 1995 - Initiated the independent operation of the Marketing and Supply and the Banking and Insurance divisions * 1989 - Introduced a

direct election Direct election is a system of choosing political officeholders in which the voters directly cast ballots for the persons or political party that they desire to see elected. The method by which the winner or winners of a direct election are cho ...

system for the president of member cooperatives and the chairperson of the NACF * 1986 - Began supplying tax-free oil for

farm machinery Agricultural machinery relates to the mechanical structures and devices used in farming or other agriculture. There are many types of such equipment, from hand tools and power tools to tractors and the countless kinds of farm implements that the ...

and equipment * 1985 - Launched an IT center equipped with 360 online networks * 1984 - Launched annuity and fire insurance businesses * 1984 - Launched

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the o ...

services * 1981 - Restructured the 3-tier organization to a 2-tier organization, consisting of individual cooperatives and the federation * 1969 - Launched the mutual credit business * 1961 - Established the NACF, consolidating agricultural cooperatives and the Agricultural Bank in accordance with Agricultural Cooperative Law

Member cooperatives

Member cooperatives are democratically controlled,

autonomous In developmental psychology and moral, political, and bioethical philosophy, autonomy, from , ''autonomos'', from αὐτο- ''auto-'' "self" and νόμος ''nomos'', "law", hence when combined understood to mean "one who gives oneself one's ow ...

business groups, funded by member subscriptions rather than government financial investment. They, in turn, fund the NACF through institutional subscriptions. Cooperatives are governed by

directly elected Direct election is a system of choosing political officeholders in which the voters directly cast ballots for the persons or political party that they desire to see elected. The method by which the winner or winners of a direct election are cho ...

presidents, who, in turn, elect a chairman of the federation.

Member farmers and associate members

Member cooperatives allow non-farmers, who have invested a certain amount of capital into the cooperative, to open tax-free bank accounts and access some services. However, whereas member farmers are defined as the genuine owners or stakeholders, associate members can only obtain limited access to or influence over the cooperative. As of December 2011, the number of the member farmers was 2,446,836 and the number of the associate members was 15,262,611. In 2010, these figures were 2,447,765 and 14,483,532, respectively, indicating a decline in member farmers of 929, and an increase in associate members of 779,079.

Number of cooperatives

At the end of year 2011, the NACF comprised 1,167 head branches, alongside 3,306 cooperatives.

Korean agriculture

Recent international agreements have affected South Korean agriculture and by extension the effectiveness of the NACF. These include the

European Union–South Korea Free Trade Agreement The European Union–South Korea Free Trade Agreement is a free trade agreement between the European Union (EU) and South Korea. The agreement was signed on 15 October 2009. The agreement was provisionally applied from 1 July 2011, and entered int ...

, implemented in July 2011, and the Free trade agreement between the United States of America and the Republic of Korea, which took effect on 15 March 2012. Proposed agreements include the

China–South Korea Free Trade Agreement The China–South Korea Free Trade Agreement (CSKFTA; also known as CKFTA - China–Korea Free Trade Agreement) is a free trade agreement between China and South Korea signed in 2014 and active since the following year. Background By 2014, the P ...

, the official

public hearing In law, a hearing is a proceeding before a court or other decision-making body or officer, such as a government agency or a legislative committee. Description A hearing is generally distinguished from a trial in that it is usually shorter and o ...

of which was held at the

World Trade Center Seoul World Trade Center Seoul (WTC Seoul) () is a building complex centered on the COEX Convention & Exhibition Center (Coex) on Teheranno in Samseong-dong, Gangnam-gu district of Seoul. It is operated by Korea International Trade Association, KITA (K ...

on 24 February 2012. Concerns over free trade agreements are reflected in the uncertain trends in Korean agricultural production. Total production by the agricultural sector in 2011 was KRW 44.62 trillion, up by 7.1% from 2010 (KRW 41.68 trillion) and including an 8.5% increase in the livestock and dairy sector. Conversely, the Korea Rural Economic Institute (KREI) expects the total production of agricultural industries to decrease by 1.1% in 2012.

Operational restructuring

On 2 March 2012, the NACF restructured its operations, establishing financial and marketing holding companies through the revised Agricultural Cooperative Law and a resolution of the

board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...

on 2 February 2012. The new NACF performs as the center of the member cooperatives, governing the Extension and Support Unit, the Agricultural and Supply Business Unit, the Livestock Marketing and Supply Unit and the Cooperative Banking Unit.

Extension and support unit

The NACF supports the operations and management activities of member cooperatives by providing education and training for their members and working to promote the rights of farmers. It also provides

investments Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort. In finance, the purpose of investing is ...

to develop and promote new agricultural technologies and products.

Marketing and supply units

The NACF provides marketing support for the production,

distribution Distribution may refer to: Mathematics *Distribution (mathematics), generalized functions used to formulate solutions of partial differential equations * Probability distribution, the probability of a particular value or value range of a vari ...

, processing, and consumption of agricultural and livestock products, focusing particularly on increasing the income of farming households by expanding sales channels and reducing farming costs. This enables farmers to concentrate their efforts on farming.

Cooperative banking unit

The banking unit serves as an intermediary and facilitator, providing loan and deposit services for member cooperatives and engaging in other incidental businesses. As of 2011, the total deposit is KRW 209 trillion and the total loan volume is KRW 146 trillion.

Subsidiaries and affiliated organizations

NongHyup Financial Group

Founded in 1961, NongHyup Financial Group was created from the merger of Agricultural Bank and Agricultural Federation. The objective of the financial holding company and its subsidiaries is to secure the funds and revenues necessary for the intrinsic activities of the NACF, and to provide differentiated banking services to its customers. The group provides financing, mortgages, personal lines of credit, corporate finance, real estate finance, and new technology finance services. It also offers life, property, and casualty insurance products.
NH Nonghyup Bank Co., Ltd

Nonghyup Life Insurance Co., Ltd

Nonghyup Property & Casualty Insurance Co., Ltd

NH-CA Asset Management Co., Ltd

NH Nonghyup Investment & Securities Co., Ltd.

NH Nonghyup Investment & Futures Co., Ltd.

NH Capital Co., Ltd.

Marketing holding company

The objective of the marketing holding company and its subsidiaries is to vitalize the marketing and supply of agricultural and livestock products through advanced expertise and efficient product distribution.
Korea Agricultural Cooperative Marketing Inc.

Namhae Chemical Corporation

Young Il Chemical Co., Ltd

Nonghyup Hansamin, Ltd.

Nonghyup Logistics Service, Inc.

Korea Agricultural Cooperative Trading Co., Ltd.

Agricultural Cooperative Pusan Kyongnam Marketing, Inc.

Agricultural Cooperative Chungbuk Marketing Co., Ltd.

Daejeon Agricultural Products Marketing Center Co., Ltd.

Nonghyup-Agro, Inc.

Samhyup Nongsan Co., Ltd.

Nonghyup Feed, Inc.

Nonghyup Moguchon, Inc.

Controversies

In 2013, Rep. Bae Ki-woon ( Minjoo) and monthly news magazine '' Sisa IN'' exposed NACF's unethical business practice of paying newspapers and other media outlets to run promo articles. Among the media outlets which received payment from NACF were newspapers ''

Dong-A Ilbo The ''Dong-A Ilbo'' (, literally ''East Asia Daily'') is a newspaper of record in Korea since 1920 with a daily circulation of more than 1.2 million and opinion leaders as its main readers. ''The Dong-A Ilbo'' is the parent company of Dong-A ...

'' (628.7 million won), ''

JoongAng Ilbo ''The JoongAng'', formally known as ''JoongAng Ilbo'', is a South Korean daily newspaper published in Seoul, South Korea. It is one of the three biggest newspapers in South Korea, and a newspaper of record for South Korea. The paper also publ ...

'' (375 million won), ''

Chosun Ilbo ''The Chosun Ilbo'' (, ) is a daily newspaper in South Korea and the oldest daily newspaper in the country. With a daily circulation of more than 1,800,000, the ''Chosun Ilbo'' has been audited annually since the Audit Bureau of Circulations w ...

'' (56.6 million won), ''

Kyunghyang Shinmun The ''Kyunghyang Shinmun'' or ''Kyonghyang Sinmun'' is a major daily newspaper published in South Korea. It is based in Seoul. The name literally means ''Urbi et Orbi Daily News''.

'' (33 million won) and ''

Hankyoreh ''The Hankyoreh'' (, literally "The Korean Nation" or "One Nation") is a centre-left liberal daily newspaper in South Korea. It was established in 1988 after widespread purges forced out dissident journalists, and was envisioned as an alternat ...

'' (12.5 million won), as well as news agency ''

Yonhap News Yonhap News Agency is a major South Korean news agency. It is based in Seoul, South Korea. Yonhap provides news articles, pictures and other information to newspapers, TV networks and other media in South Korea. History Yonhap (, , translit. ' ...

'' (132 million won) and news website ''

OhmyNews OhmyNews (Hangul: 오마이뉴스) is a South Korean online news website with the motto "Every Citizen is a Reporter". It was founded by Oh Yeon Ho on February 22, 2000. It is the first news website in Korea to accept, edit and publish article ...

'' (55 million won). An NACF public relations employee, who requested anonymity, told '' The Korea Observer'' that it has paid media outlets in exchange of articles that promote the cooperative and its policies. The employee also said that NACF does not spend its money to bribe media organizations to stop publishing "negative" news against it.

References

External links

* {{Authority control Cooperatives in South Korea Agricultural cooperatives Cooperative banking in Asia Banks of South Korea Agriculture in South Korea South Korean companies established in 1961 Banks established in 1961