"Expulsion Only After Illegal Activity Confirmed"... NongHyup Faces Difficulty Resolving Membership Issues

Loan Interest Rate Benefits Exploited
Central Association "Only Waiting for Regional Nonghyups' Own Decisions"
Government "Reviewing Whether to Improve the System"

[Sejong=Asia Economy Reporter Moon Chaeseok] The speculation allegations involving employees of Korea Land and Housing Corporation (LH) in new towns are impacting local agricultural cooperatives. As it was revealed that LH employees under suspicion of speculation joined regional agricultural cooperatives and received loans with preferential interest rates, voices are emerging that the membership system, which recognizes anyone who meets the qualifications on paper as a member, should also be reviewed. However, the National Agricultural Cooperative Federation (NACF) has shown a lukewarm stance not only on system improvements but also on whether to expel the members in question, leading to criticism that it is neglecting issues within the local cooperatives.

According to the NACF on the 15th, the federation is not considering separate measures such as expelling nine LH employees who borrowed 5.8 billion won from Buk Siheung Agricultural Cooperative. Buk Siheung Agricultural Cooperative provided land-secured loans to LH employees suspected of speculation in the Gwangmyeong-Siheung district, designated as a third-phase new town. The NACF stated that it will wait until Buk Siheung Agricultural Cooperative makes its own decision after reviewing the government's special investigation results. A NACF official said, "We are not considering expulsion until the investigation results come out," and "We have no plans to instruct Buk Siheung Agricultural Cooperative to expel them."

Local agricultural cooperatives inadvertently played the role of a funding source in this speculation case. In particular, since members receive preferential interest rate benefits of around 0.2 percentage points, it attracts the attention of those seeking land-secured loans.

This reflects the perception that there were no issues during the employees' cooperative membership process. According to the Agricultural Cooperative Act and the bylaws of Buk Siheung Agricultural Cooperative, members must be farmers with an address or business location within the regional cooperative’s jurisdiction, managing or cultivating farmland of 1,000㎡ or more, and engaged in farming for at least 90 days a year. Additionally, they must submit agricultural management registration, an application form, a farming ledger, a land lease contract, a membership share and deposit and dividend account application, and capital contributions ranging from 1 million to 10 million won. Under these conditions, the LH employees are considered farmers cultivating land for more than three months a year. The NACF stated that there were no problems during the membership process but will follow legal procedures if issues arise during the investigation.

The government is reviewing the issue of non-farmers joining cooperatives. A National Office for Government Policy Coordination official said, "Since problems such as receiving loans through cooperative membership have surfaced, the Ministry of Agriculture, Food and Rural Affairs is examining whether to improve the system."

Experts also advise that non-farmers should not be granted membership qualifications to prevent corruption rather than taking after-the-fact measures. Kim Wan-bae, emeritus professor of Agricultural Economics at Seoul National University, said, "The government should amend the law to strengthen farmer qualifications, and the agricultural cooperatives should establish a system that does not accept non-farmers as members based on that principle."

This content was produced with the assistance of AI translation services.