[비즈한국] The government and the ruling party are struggling to gain momentum in drafting legislation for NongHyup (National Agricultural Cooperative Federation) reform. Disagreements persist between the government and the NongHyup central office regarding the details of transitioning to a direct election system for the chairman by all cooperative members and the establishment of an external audit committee, while opposition from political parties continues. The recent legislative review subcommittee failed to reach a conclusion, meaning the review of the bill is unlikely to resume until after the parliamentary audit. Whether a consensus on the NongHyup reform plan can be reached within the year remains to be seen.
The National Assembly's Agriculture, Food, Rural Affairs, Oceans, and Fisheries Committee reviewed the amendments to the Agricultural Cooperatives Act (NongHyup Act) containing the reform plan during a sub-committee meeting held on September 29, but failed to reach a conclusion. The committee has been reviewing 12 amendments to the NongHyup Act proposed by ruling and opposition lawmakers. With the parliamentary audit scheduled from October 7 to 23, the discussion on NongHyup reform is expected to resume in a subsequent legislative subcommittee meeting.
At the 42nd Cabinet Meeting held on the same day, President Lee Jae-myung checked the progress of the NongHyup reform. Minister of Agriculture, Food and Rural Affairs Song Mi-ryung explained, "The standing committee is discussing the first reform plan, which focuses on the direct election system for members and the independence of the audit committee. The second reform plan, aimed at revitalizing economic operations, is being discussed by the NongHyup Reform Committee to be prepared within the year."
President Lee remarked, "There are many cases where voting rights are sold in exchange for economic favors in areas with control over funds or where economic interests are at stake. This tendency has existed within NongHyup, and shifting to a direct election system should resolve it."
The core of the NongHyup reform plan being pushed by the government consists of two main pillars: direct election of the NongHyup chairman by all members, and the establishment of an external NongHyup audit committee. Currently, the election for the NongHyup chairman is an indirect system where about 1,100 cooperative heads cast votes. However, due to corruption such as bribery during the election process, a plan for members to vote directly has been proposed. The audit committee is intended to be a separate legal entity, distinct from the central office, to isolate the auditing function.
Representative Yoon Jun-byeong of the Democratic Party of Korea, who serves as the executive secretary of the Agriculture Committee, announced at a press conference on September 22 that an agreement had been reached between the government and the NongHyup central office. According to the agreement revealed by Rep. Yoon, the NongHyup audit committee will be newly established as a non-capital special legal entity, separate from the central office. The roadmap also includes submitting an implementation plan to the National Assembly within 6 months after the passage of the bill, prioritizing the spin-off within one year, and achieving full legal independence within two years.
Regarding the direct election of the chairman, the eligibility criteria for candidates, such as the duration of membership and the amount of business usage, will be governed by NongHyup's own articles of association to respect the autonomy of the organization. As a principle, the election costs will be borne by the NongHyup central office. To prevent excessive politicization, the restriction on candidates’ political party membership will be extended to 1 year for the 2028 election and 3 years for the 2031 election.
However, contrary to Rep. Yoon's announcement, the NongHyup central office maintains that negotiations with the government have not been finalized. Initially, NongHyup opposed the introduction of a direct election system, the expansion of the Ministry of Agriculture's direct oversight, and the establishment of an external audit committee. However, after Chairman Kang Ho-dong released a statement on May 21, the organization shifted its stance toward accepting the direct election system.
At the time, while accepting the direct election system, the NongHyup central office requested institutional support, such as a public management system for elections, due to concerns over costs. The NongHyup central office estimates that the election costs could reach around 40 billion won. On the other hand, the government has maintained its position that national support is difficult because it is an election under the NongHyup Act. Instead, it proposed reducing costs by holding the elections for regional cooperative heads and the central chairman simultaneously.
The NongHyup central office responded regarding the consensus, stating, "We have not finished negotiations regarding the government's reform plan; we are still in discussions to determine the details." It is reported that the Agriculture Committee's legislative subcommittee on September 29 also failed to reach a conclusion regarding who should bear the election costs.
Opposition from political parties also continues. At the September 22 press conference, Rep. Yoon Jun-byeong urged the opposition to join the NongHyup reform. When People Power Party lawmakers on the committee raised issues regarding a hybrid direct-indirect election system or legal consistency, he emphasized the agreement on introducing a full direct election system for all members.
Rep. Yoon argued, "NongHyup is suffering from continuous abuses of power, preferential treatment, collusion, and corruption due to a distorted governance structure centered on an unchecked, imperial chairman. We must not leave the harmful effects of the indirect election system by cooperative heads as they are. By returning voting rights to all members, we must restore member sovereignty and resolve the issues caused by the monopoly of voting rights by a few."
Concerns have also been raised by the ruling party. During the September 8 subcommittee meeting, Representative Lee Gae-ho of the Democratic Party of Korea suggested that the validity of the direct election system needs to be supplemented, citing the U.S. presidential election as an example of an electoral college system. Representative Kim Sung-bum of the Democratic Party of Korea also stated, "A process of building consensus and explaining the direct election system is necessary," adding, "Regulations regarding the limitation of election costs must be established and organized."
Meanwhile, as the legislative amendment is being delayed, there is growing concern that the reform might spill over into next year. The Ministry of Agriculture initially planned to push for the legislation of the reform plan before the June 3 local elections and announce the second reform plan containing measures to revitalize economic operations in June. However, progress has been slow, with even the first reform plan yet to be legislated. Consequently, on September 7, a farmers' group, "The Farmers' Path with the People," held a press conference and urged, "The amendment to the NongHyup Act must be passed during this regular parliamentary session."