Research Reports
A Study to Increase the Competitiveness of Agricultural Cooperative
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AuthorHwang, Euisik
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Publication Date2009.06.01
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Original
The objective of this study is to present strategies for improving the competitiveness of National Agricultural Cooperative Federation (Nonghyup). We expect our study will help the agricultural cooperative adapt more quickly to the changing environment of agricultural and financial markets, hence acquiring a strong competitiveness in the long run.
There have been increasing calls for the agricultural cooperative to boost its non-credit operations. However, the cooperative has been focusing more on credit business than on non-credit business. For this reason, the cooperative has continuously been criticized. The agricultural cooperative couldn't meet the needs of its members due to its credit market-oriented business structure and corporate governance.
In the case of foreign agricultural cooperatives, the governance structure is divided between executive and inspection functions. In many cases, a foreign agricultural cooperative maintains a governance where business operations are relegated to its branches.
In this study, we investigated ways of increasing the competitiveness of Nonghyup in line with the changes of agricultural and financial conditions. In order to accomplish the purpose of this study, we did the following:
First, we reviewed credit and non-credit business systems of Nonghyup and examined the problems faced by the changing environment with respect to factors such as financial crisis, changes in agriculture, etc.
Second, we examined foreign agricultural cooperative systems in terms of governance structure and management. The foreign cases studied include those of Japan, France, and the Netherlands.
Lastly, we proposed ways of improving the competitiveness of Nonghyup. The goals of proposed development strategies include improving the corporate governance, separating credit business from non-credit operations, and finding business innovations.
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