[비즈한국] Confusion is growing surrounding the reform of the National Agricultural Cooperative Federation (NACF), or Nonghyup. As the government and the ruling party push for amendments to the Agricultural Cooperative Act ahead of the June 3 local elections, Nonghyup has begun to push back, led by NACF Chairman Kang Ho-dong, arguing that the installation of an external audit committee and the expansion of supervisory authority will lead to "strengthened government control." With conflicting voices within the organization regarding whether this is a "reform" or "backtracking," attention is focused on whether the government and the ruling party can maintain the pace of their reform efforts.
The Ministry of Agriculture, Food and Rural Affairs (MAFRA) and the ruling party announced the Nonghyup reform plan following policy consultations on March 11 and April 1. Based on this reform plan, the government is pushing for an amendment to the Agricultural Cooperative Act. The core of the reform includes: establishing a separate legal entity for the Nonghyup Audit Committee, shifting the election method for the NACF Chairman to a direct vote by all cooperative members, and restructuring the Nonghyup Financial Group.
Once the Nonghyup Audit Committee is established as a separate legal entity, an external body will take over audits of the central federation, cooperatives, and financial holding companies that were previously conducted internally. The plan also includes expanding the guidance and supervisory authority of the Ministry of Agriculture, Food and Rural Affairs from the central federation and local cooperatives to the holding companies and their subsidiaries. The direct election system for cooperative members is a measure to reduce corruption and bribery in the chairmanship election and is scheduled to be applied from the March 2028 election. Currently, the NACF Chairman is elected through an indirect system by the votes of 1,110 cooperative heads.
Minister of Agriculture, Food and Rural Affairs Song Mi-ryung stated at a press conference on the 27th, "If we push for legislation related to the reform plan after the local elections, it will get caught up in political strife. We will push for legislation at a rapid pace in May," and added, "In June, we will prepare a second phase of reform covering the revitalization of economic businesses and the scaling up of cooperatives.">
As the government speeds up its legislative push, Nonghyup is voicing its opposition every day. On the morning of the 28th, the Emergency Committee for Protecting Nonghyup Autonomy held a "Joint Farmers' Declaration Ceremony for Protecting Nonghyup Autonomy" at the National Assembly, with approximately 500 participants, including local agricultural and livestock cooperative heads and farmers' organizations. They demanded five things from the National Assembly: halting government-controlled supervision, discarding toxic clauses, maintaining guidance and oversight of subsidiaries, withdrawing the proposal for a new audit body, and stopping the transition to a direct election system for the chairman.
On the same day at 2 p.m., a protest was held in front of the National Assembly by the union, which claims the Nonghyup reform plan is a "hasty backtracking." The NH Nonghyup branch of the Korean Financial Industry Union opposed the establishment of the committee, arguing that a government-recommended audit committee would have transcendental supervisory authority, thereby strengthening government control. They also called for the dismissal of NACF Chairman Kang Ho-dong, who is under suspicion of corruption in a special audit. The 28th was the day the National Assembly's Agriculture, Food, Rural Affairs, Oceans and Fisheries Committee held a legislative review subcommittee, but no agreement was reached that day.
An official from the Korean Financial Industry Union's NH Nonghyup branch said, "We are not against the Nonghyup reform itself; we are against the establishment of the audit committee," and added, "Financial holding companies are already supervised by financial authorities. If an external body is created and staffed with government appointees to audit throughout the year, business operations could be severely restricted.">
The government and Nonghyup also presented conflicting survey results regarding the push for reform. It was noted that the government targeted cooperative members, while the NACF targeted cooperative heads. On the 27th, the Ministry of Agriculture, Food and Rural Affairs stated that in a survey of Nonghyup members and the general public, 94.5% of members and 95.1% of the public supported the reform. Regarding the establishment of the Nonghyup Audit Committee, 85.8% of members and 93.3% of the public answered in favor. Regarding the government's new supervisory authority over the NACF holding company and subsidiaries, 68.9% of members and 79.7% of the public were in favor. These results were from a perception survey conducted by the Korea Rural Economic Institute (KREI) from April 21 to 24, covering 1,079 members and 1,000 members of the general public.
The survey conducted by the NACF produced the exact opposite results. According to the NACF, in a survey of 1,108 agricultural and livestock cooperative heads conducted on April 9-10, 96.4% of the 871 respondents opposed the establishment of an external audit committee. 96.8% opposed the expansion of direct supervision by the Ministry of Agriculture, Food and Rural Affairs, and 96.1% opposed the introduction of a direct election system for the NACF Chairman by all cooperative members.
Movements to speed up legislation are emerging not only from the government but also from within the organization, with some saying, "Now is the right time for reform." The National Cooperative Headquarters of the Korean Federation of Office Workers' Unions, to which local agricultural and livestock cooperative workers belong, voiced their opinion, saying, "Nonghyup reform is a task that can no longer be delayed. We must swiftly process the reform legislation and investigate Chairman Kang Ho-dong strictly.">
An official from the National Cooperative Headquarters argued against the claim that establishing an audit body is government control, stating, "There is an internal audit body within the NACF, but aren't the chairman's irregularities and organizational corruption actually increasing? Claiming there is a self-purification ability is preposterous." He emphasized, "An external independent audit body is necessary for reform. The introduction of direct member elections and the installation of an external audit body have been discussed since 2018 and are not hasty legislation.">
Conflict within the cooperatives seems to have intensified following the protest on the 21st. This is due to controversy over the alleged forced mobilization of members for the anti-reform protest held by the Emergency Committee for Protecting Nonghyup Autonomy in front of the National Assembly on the 21st. The National Cooperative Headquarters of the Korean Federation of Office Workers' Unions released a statement, saying, "The central federation sent mobilization documents to local agricultural and livestock cooperatives, urging them to fill allocated numbers," and released documents containing content such as "required personnel is at least one bus per cooperative." Chairman Kang Ho-dong, who is under suspicion of corruption, attended the rally in person, drawing criticism.