Panel calls for overhaul of farm co-op's management

SEOUL, Jan. 9 (Yonhap) -- A joint panel of experts and government officials
announced a plan on Friday calling for the overhaul of the management structure
of the country's scandal-plagued farm cooperative.

The blueprint hammered out in the past month by 11 experts aims to limit the
power of the National Agricultural Cooperative Federation chairman, empower the
board to make all important decisions, and restructure the 2.4-million strong
organization to better meet the needs of farmers.
The cooperative, better known as Nonghyup, has been cited for corruption,
incompetence and political maneuvering, with the last three chairmen going to
jail for illegal dealings and taking bribes.
Chung Dae-kun, the last Nonghyup head, was implicated in a bribery scandal
involving the brother of former President Roh Moo-hyun.
Former chairmen -- while technically limited to the role of figureheads who can
only sign contracts -- have been accused of using their power to affect employee
promotions and postings, allowing them to effectively control the organization.
"Under the changes, the chairman will be barred from any decision-making process
related to the appointment of the 10 most senior CEOs, with a fully independent
personnel committee making all such decisions," Kim Wan-bae, co-chair of the
Nonghyup reform panel, said.
The agricultural economics professor at Seoul National University also said that
in the future, the chairman will be allowed to serve only a single four-year
term, as opposed to current rules that allow him to serve twice, with indirect
voting by representatives picked from the 1,187 regional cooperatives to select
Nonghyup's leader.
"While the number of representatives who can cast votes will be cut from 1,187 to
257, the indirect voting system can prevent vote-buying by incumbents or aspiring
candidates, who in the past have pledged funds to small cooperatives that cannot
survive without support," he said.
Such practices have weakened Nonghyup's ability to concentrate on core businesses
that include finding outlets to sell locally grown produce and providing support
in the form of operating silos, providing financial assistance and managing farm
equipment.
Other changes that have been proposed strengthen the role of the board of
directors, comprised of CEOs from Nonghyup affiliates and regional cooperatives.
In the past, with the chairman exercising power through employee promotions, this
body could only rubber stamp the head's decisions, making it unable to truly
reflect the needs of farmers.
Kim, in addition, said effort should be made to merge smaller cooperatives to
enhance their competitiveness.
"The number of cooperatives could be reduced to around 300," he said, stressing
that because cooperatives cannot be forced to merge, appropriate incentives need
to be given.
The professor said that the proposal, reached with input from Nonghyup, state-run
think tanks, farmers groups and scholars, had the support of the Ministry for
Food, Agriculture, Forestry and Fisheries, and should be sent to parliament for
passage in February.
However, passage may be delayed until fall depending on parliamentary proceedings
and the outcome of expected talks to separate the financial arm of Nonghyup, he
said.
yonngong@yna.co.kr
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