[Viewpoint]Co-op agency is a mess

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[Viewpoint]Co-op agency is a mess

The National Agricultural Cooperative Federation elected a new CEO yesterday. The post has been vacant since Nov. 30, the day the Supreme Court found the federation’s former CEO guilty of bribery. The new CEO will serve a four-year term.
The National Agricultural Cooperative Federation, a union, was established with the contributions of more than 1,200 member cooperatives nationwide. According to the National Agricultural Cooperative Federation Law, the federation must do its best to serve cooperatives and individual members. It must not do any business that competes with the member co-ops. However, the federation has been reigning over the cooperatives and their members for some time.
As the federation expands its business, it has been competing, checking, watching and even interfering with the business of the other member cooperatives.
Among the 15,000 employees and executives of the National Agricultural Cooperative Federation, 12,000 are involved in banking and finance. Some 2,000 attend to economic projects while 1,000 are engaged in leadership, research and study, and educational training.
In the past, the federation focused its financial operations mainly on cooperative banking. Its purpose was to help the member co-ops in agricultural areas.
However, the agricultural financial operation has turned into a banking operation. The federation has changed the names to NH Bank, NH Investment & Securities and NH Insurance. It has transformed into a comprehensive financial group dealing not just with the members, but numerous unspecified clients. As the federation gets more and more distant from the co-ops and its members, the tail is wagging the dog.
The federation’s economic projects mostly include expansions of distribution businesses, initiated by the central body.
The federation has created 78 economic operation entities, including internal departments, and 24 subsidiaries, providing secure lifelong jobs for the employees and executives of the federation. It has become a recklessly expanding and badly managed comprehensive discount store.
The biggest problem is that instead of assisting the region’s distribution businesses, commodity- and industry-oriented cooperatives, the federation is checking on them and hindering their growth by competing with them.
Rather than encouraging the commodity- and industry-oriented cooperatives to get involved with the federation, the agency has created a nominal nationwide council for each commodity.
The federation is neglecting its responsibilities and duties as a central body and cooperative association.
For those reasons, critics are saying that there won’t be any development of the cooperative association until the National Agricultural Cooperative Federation realizes its proper place and re-establishes its mission.
The federation needs to separate trust and business operations and make them independent from the central organization as soon as possible. It needs to reform by following the spirit of a cooperative association and serving its co-ops and their individual members.
The Ministry of Agriculture and Forestry, the supervisory agency of the federation, is largely responsible for this mess.
In 1990, the ministry forcibly united the federations of the agricultural, livestock and ginseng cooperatives in the name of agricultural reform. That created the National Agricultural Cooperative Federation, which has become today’s giant. The ministry also approved and supported the reckless business expansion of the federation. Therefore, reforming the federation won’t be easy without severing the decades-old ties between the federation and the agriculture ministry.
We need a revolution from the election for the CEO of the National Agricultural Cooperative Federation.
Hopefully, the Lee Myung-bak administration will make reinventing the National Agricultural Cooperative Federation as its top priority when it sets its agricultural policy and pursues reform to correct the agricultural ministry’s misguided co-op-related policy.

*The writer is a visiting professor at Chonnam National University and a co-chairman of the National Movement for Agricultural Cooperative Reform. Translation by the JoongAng Daily staff.

by Choe Yang-boo
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