For Wellbeing of Farmers

NACF to split into economic and finance units with 30 pct of capital allocated to economic division of operation

Rep. Choi In-kee, chairman of the Food, Agriculture, Forestry and Fisheries Committee of the National Assembly issued a statement after the committee's approval of the draft revision of the National Agriculture Cooperative Federation Law. The revision allows the farmers's organization to handle the sale of farm produce and undertake economic businesses centered on farm produce selling and distribution for the first time since the foundation of the NACF. The revision also mandates the NACF to allocate more than 30 percent (5.4 trillion won) of its capital to the economic sector.
The draft revision of the National Agriculture Cooperative Federation Law was finally approved by the committee on March 4 following a prolonged discussion of the draft law revision since it was submitted to the committee for approval in December 2009.
What delayed the committee's approval was that many members of the committee thought that the draft did not adequately address revitalizing the economic section of the NACF, inviting heated discussion on the matter between the government, parliament and the NACF.
Chairman Choi, a democratic party member from the Naju and Hwasun district in South Jeolla Province, objected to the passage of the draft at the committee saying, "The revision of the NACF Law should be intended to make the NACF help farmers to produce and sell their products in order to return the profit to the farmers themselves, and so long as the draft lacks such clauses, it would be impossible for the draft to pass the parliament." "The revision should have included provisions on invigorating the NACF''s economic business sector, the government's provision of funds to help the NACF's finance, tax exemption and guarantee for special exemption for insurance coverage fees, and reform of the economic business management divided up with the central council complicating the operation, all told the five key provisions, which they said the government should take care of first as demanded by Rep. Choi from during the parliamentary audit of the administration in 2010.
The committee finally approved the draft revision on March 4 after lengthy talks with government officials resulted in the government's agreement on all five issues that the committee asked for, thus ensuring the NACF sells farm produce well for farmers by invigorating its economic business sector by 2017, providing more funds and making a special exemption for farmers' insurance fees, among others.
Chairman Choi said he hoped the NACF would be able to achieve its objectives to help farmers grow and sell grains well and switch the NACF to an organization for farmers, now that the revision has passed in the committee. He said the reform is not finished with the passage, but it is only the beginning, because the political circles and the farm community must now work together to truly bring about the reform of the agricultural sector.
From next year, the NACF will be divided into the economic business sector and the financial sector and the businesses operated by the Central Council of the NACF will be split into the economic sector and non-profit business sector and transferred gradually to the economic holding company of the NACF.
"The NACF has finally been able to have its role clarified and included in its law for the first time since its foundation some 50 years ago. Its businesses include the sale of farm produce under its economic business operation to make a contribution to the wellbeing of farmers and members of the NACF,"Chairman Choi said.
The Food, Agriculture, Forestry and Fisheries Committee will support the stability of the NACF's economic business operations by helping increase its capital to 18 trillion won and allocating 30 percent of the fund, or 5.4 trillion won, to the economic business operation for the independent operation of the sector, which substantially satisfies the demand by farmers's organizations and academics to expand the capital of the NACF by at least 6 trillion won.
A core of conflicts with the government on financial support and tax exemption for the NACF were resolved during the talks with government officials led by Vice Minister Yoo Seong-gul of the Ministry of Strategy and Finance and Director-Gen. Choo Young-sub of the Taxation System Office.
For the special exemption on insurance, a five-year grace period will be allowed for the NACF and in the case of policy insurance, the regulation on two insurance policy holders and the restrictions on business operations outside branch offices will be lifted altogether. Insurance policy sellers will be given the permits after a training period. nw




Rep. Choi In-kee, chairman of the Food, Agriculture, Forestry and Fisheries Committee of the National Assembly.
- Photo by courtesy of Rep. Choi in-kee's office