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NACF will be the first in a series called "Meet the Member", which features one ICAO member each month. Our intention is to provide information about each member to enhance our collaborative abilities within the organization.
National Agricultural Cooperative Federation (NACF) Korea
Following the Korean War, usury and corruption abounded in the agricultural communities of Korea. Seeking to end this system, the new government merged agricultural cooperatives and the agricultural bank in 1961, and NACF was born. NACF, or as its called in Korean, “NongHyup”, is the result of efforts to construct a national cooperative system to improve production capacity and provide financial resources for Korean farmers. Now, NACF is the apex organization of 1,140 primary member cooperatives representing more than 2.35 million farmers in Korea. In the decades since its conception, NACF has played a crucial role in the growth of the Korean economy, developing into one of the most successful cooperatives in the world. In contrast to the original top down approach wherein the Korean government was heavily involved in the management of the Federation, the NACF is now owned, controlled, and operated by its members in a bottom up approach. The leadership of the NACF is elected rather than appointed, and all members share a stake in the Federation.
The operational structure of the NACF is one that makes it unique among cooperatives because NACF is not just a cooperative, but also a business. While its member cooperatives own the NACF, the NACF itself has two business holdings that are operated separately: the Agribusiness Group and the Financial Group. The Agribusiness Group is the center for the marketing and supply of agricultural and livestock products. Its subsidiaries include everything from fertilizer to marketing to seed companies, all for the benefit of its member farmers. The Financial Group is the center for profit generation with the collaboration of nearly a dozen subsidiaries, and the Financial Group’s NH bank is one of the largest in Korea. NACF acts as the control tower between the Agribusiness and Financial Groups, coordinating and organizing the two to benefit the members.
The NACF has achieved a substantial market share in Korea through methods of systemized distribution, especially joint-shipping groups and marketing agencies in common, which allow members to pool resources to reduce cost and increase efficiency in shipping and marketing. NACF is also unique in that its member cooperatives and subsidiaries own and operate their own chain of supermarkets called Hanaro Mart. Hanaro Mart specializes in carrying and promoting Korean agricultural products, especially those grown by its member organizations. NACF helps its member farmers all the way from the production site to the consumption site, leading to higher pay for farmers and lower cost for consumers.
NACF’s reach is not limited to agricultural cooperatives and financial support. As it understands the necessity to improve not just the livelihood of farmers, but also the balanced development of the national economy, NACF maintains a successful Corporate Social Responsibility (CSR) program. This program has provided ongoing support for a variety of initiatives to help meet this social responsibility. Some of the programs that NACF has implemented are:
1. Growing future leaders – In 2014 alone, NACF provided 46,909 students with over KRW 43 billion in scholarships to help rural students overcome the challenges of living far from the city and its educational opportunities. The Federation also established a residence hall in Seoul, which accommodates 500 rural students who would otherwise have difficulty securing housing. These programs provide today’s young leaders with the resources they need to become major players in tomorrow’s agricultural co-operatives.
2. Improving rural welfare – In association with major general hospitals, NACF supplied medical services to rural communities, allowing 29,539 people medical treatment in 2014. Additionally, NACF provides free legal services to its members to protect farmers’ legal rights.
3. Supporting multicultural families – NACF provides airfare support and educational cultural programs to assist the rising number of multicultural families in rural areas of Korea. The Multicultural Women’s College has been established as a place where female immigrants can attend educational lectures and participate in cultural programs, especially language programs, to assist with their smooth transition into the Korean lifestyle.
The ultimate mission for NACF is three-fold: to lay the foundation for farmers’ prosperous futures, to provide customers with the best possible value for better lives, and to contribute to the nation’s sustainable development. NACF looks forward to providing continued innovation and community support for the coming generations.