2007. 3. 15 .
Wan-Seok Park
[email protected]
Senior Manager
Ag Finance Department
NACF, South Korea
Contents
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Statistics on Farm Affairs in Korea
Ag-Coop System
Agricultural Finance
Agricultural Marketing
Statistics of Farm Population
(Unit:Thousand KRW)
classification
Household
Population
1965
2006
Total (a)
4,844
15,887
Farm Household (b)
2,507
1,273
Proportion (b/a)
Total (a)
Farm Population (b)
51.5%
28,705
15,812
8.0%
48,294
3,433
Proportion (b/a)
55.1%
7.1%
※ Number of family members per farm household: 6.3  2.75
Age Groups of Farm Operators
Age
Under 30
1981
Numbers
(Thousand)
104
%
5.1
2006
Numbers
%
(Thousand)
2
0.2
30~49
936
46.1
218
17.6
50~59
555
27.3
286
23.1
Over 60
435
21.5
734
59.1
Total
2,030
100
1,240
100
Contribution of Agriculture to GNP
(%)
12.00
10.7
Agriculture’s contribution to GNP
10.00
7.3
8.00
Year 1980
10.7%
Year 2006
3.1%
5.3
6.00
`
3.5
4.00
3.1
2.00
0.00
1985
1990
1995
2004
2006
AGRICULTURE’S CONTRIBUTION TO GNP
Characteristics of the Ag-Coop
1. Multi-purpose
2. Central Role in Cooperative Movement in Korea
3. Two-tier System
4. Implement Agricultural Policy for Government
Subsidiaries of the NACF
1. Agricultural Cooperative College
2. The Farmers Newspaper
3. The Namhae Chemical Corporation
4. Korea Agricultural Marketing, Inc.
5. Korea Agricultural Trading Co.,Ltd.
6. Nonghyup Tours
7. The NACF Futures Corporation
8. Korea Coop-Agro, Inc.
9. Korea Samhyup Co.,Ltd.
10. Nonghyup Korea Ginseng Co.
11. Nonghyup Feed Inc.
12. Nonghyup CA Asset management Co.,Ltd.
13. Agricultural Cooperative Asset Management Co.,Ltd.
14. NH Investment & Securities
Agricultural Finance System
Farm Operators
Mutual Fund
MAF
Policy Fund
Commercial
Fund
Customers
Nonghyup
Policy Loan
Mutual Loan
Commercial
Loan
Payback
Ag Credit
Guarantee Fund
Fund for
Loss Compensation
Loan
Farm Operators
Systems to Facilitate Lending to
Farm Operators
• Agricultural Mutual Fund/ Policy Fund
- Balance of AML in 2005 : KRW 127 trillion
- Balance of PL in 2005 : KRW 27.7 trillion
• Credit Loan System
- Up to KRW 15 million per farm household
• Agricultural Credit Guaranty Fund
- Simple credit analysis for issuing Letter of Guarantee
up to KRW 50 million per farm household
• Fund for Loss Compensation
Profile of Main Farm Loans
Integrated Farm Loan (Policy Loan)
- Mostly for large farm operators
- For the use of farm purchase, facility installations,
repairs, maintenance, operation, etc.
- Balance in 2006: KRW 2,143 billion
Farm and Livestock Management Loan (Policy Loan)
- Mostly for small farmers
- For the use of farm and livestock operations
- Balance in 2005: KRW 3,800 billion
Farm
Facility
Farm
Operation
Agricultural Mutual Fund
- For all farmers
- For the use of family living and farm production
- A kind of commercial loans
Family
Living
Integrated Farm Loan (IFL) System
Help farm operators to achieve their goals
Loan Counsel
Credit Loan Appraisal
& Lending
Analysis
Consultation
Types of Consulting Services
Before
Investment
Interests of FO
After
Investment
(Financial aspect)
- Feasibility of Investment
- Facility-loan Programs
- Future Price of FP
- Profitability
- Effective Management
- Operational-loan Programs
- Loan Payment Schedule
NACF
Consulting Services
Loan Investment Price
Program Analysis
Info.
Financial Financial Loan
Risk
Book
Diagnosis Plan
Payment Forecast Keeping
Price Analysis System
Financial Planning (Budgeting)
 Planning tool that contains estimates of production costs and
returns based on the current or expected economic environment
Enterprise 1
Budgeting
Enterprise 2
Budgeting
Enterprise 3
Budgeting
Debt
Information
Property
Information
Monthly
Cash Flow
Monthly Debt
Payment Schedule
Financial Stress Test
& Grouping
F/S
Book Keeping Software
Changes in Agricultural Marketing
Collector, Traditional
Market
Big Retailer
Sorted & Standardized
products
Bulky
Rural economy
Face to face transaction
(non-ag)
Manual shipping
Brand names,
POS, EDI
Machine, palletizing
(Customer driven)
New Agricultural Marketing System
Conventional System
6 steps
New System
4 steps
Producer(farmer)
Producer(farmer)
Collector
(Food system)
APC(201)
Shipper
Rural economy
Wholesaler
(non-ag)
AMC
Retailer
Consumer
Consumer
(Customer driven)
Providing farm supplies
• Chemical Fertilizers,
Agro-chemicals,
Farm Machinery, Feedstuff,
Petroleum, Tax-free farm fuels
• Stable & timely supply at reasonable prices
• Agro-chemical and fertilizer companies
• Seedling center
Rice Processing Complexes(RPC)
• A modernized marketing facility conducting
various post-harvest processes
ex) Drying, storing, processing, and
packaging of rice
• Value added process
• Number of RPCs run by Nonghyup : 181
packaging
drying
Development of Post-harvest Technology
• Agricultural Produce Complex (APC) : 201
- Pre-cooling, pre-drying, sorting, storing,
packaging, cleaning
• Collection Points : 1,943
Agricultural Marketing Complexes (AMC)
• Marketing centers in urban areas as an
alternative distribution channel
• Similar to large supermarket or discount
stores
• Transaction based on private contract with
producers, not based on auction
• Engaged in both retail and wholesale
Retail business (Hanaromarts)
• First introduced in 1970
• Hanaro Marts (retail outlets) : 2,183 stores
- Unique cooperative stores
• Internet commerce : 1,395 items
Hanaromart
Distribution
center
E-commerce
• Cyber-marketing
- KRW 95.5 billion in 2005
• POS (Point of sales) System
• EDI (Electronic Data Interchange)
Food safety & consumer protection
• Analysis of pesticide residue
- Food safety center
• Education on food safety
issues & the use of pesticides
• Traceability : HACCP/GAP
* Beef History Tracking System
Role - Member Cooperatives
• Transport farm products to the collecting points,
eg. cooperative marketing centers or processors
• Advance payments to farmers for consigned
commodities - financial support
• Dissemination of agricultural marketing
information to producers
Role – the NACF (Federation)
• Planning and guidance services for
cooperative marketing
• Operation of cooperative marketing centers
New Trends of Marketing and Extension
 Promoting brands for farm products






- 168 brands, 20 leading brands
Agricultural Coupons(’05) : KRW 317 billion
Self-help Funds (’05)
- Cow : KRW2.8 billion, Pig : KRW 5 billion,
Dairy : KRW 5 billion
Special days for product-eating
- White day, Duck day, Gu-Gu day, Apple day…
HACCP(Hazard Analysis Critical Control Point)
- 71 butcheries and processing plants
Livestock Consulting System
Production Quota on each farm household
Thank you
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presentation 5 - Rural Finance Learning Center