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Statistics on Farm Affairs in Korea11
22 Ag-Coop System
33 Agricultural Finance
44 Agricultural Marketing
Statistics of Farm Population
classification 1965 2006
Household
Total (a) 4,844 15,887
Farm Household (b) 2,507 1,273
Proportion (b/a) 51.5% 8.0%
Population
Total (a) 28,705 48,294
Farm Population (b) 15,812 3,433
Proportion (b/a) 55.1% 7.1%
(Unit:Thousand KRW)
※ Number of family members per farm household: 6.3 2.75
Age Groups of Farm Operators
Age1981 2006
Numbers(Thousand)
% Numbers(Thousand)
%
Under 30 104 5.1 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
10.7
7.3
5.3
3.5
3.1
0.00
2.00
4.00
6.00
8.00
10.00
12.00
1985 1990 1995 2004 2006
`
AGRICULTURE’S CONTRIBUTION TO GNP
(%)
Agriculture’s contribution to GNP
Year 1980 10.7%
Year 2006 3.1%
Contribution of Agriculture to GNP
1. Multi-purpose
2. Central Role in Cooperative Movement in Korea
3. Two-tier System
4. Implement Agricultural Policy for Government
Characteristics of the Ag-Coop
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
Policy Loan Mutual Loan CommercialLoan
Farm Operators
Nonghyup MAF Policy Fund
Loan
Payback
Ag CreditGuarantee Fund
Fund forLoss Compensation
Farm Operators
CustomersCommercial Fund
Mutual Fund
Systems to Facilitate Lending toFarm Operators
• Agricultural Credit Guaranty FundAgricultural Credit Guaranty Fund - Simple credit analysis for issuing Letter of Guarantee- Simple credit analysis for issuing Letter of Guarantee up to KRW 50 million per farm householdup to KRW 50 million per farm household
• Credit Loan SystemCredit Loan System - Up to KRW 15 million per farm household- Up to KRW 15 million per farm household
• Fund for Loss CompensationFund for Loss Compensation
• Agricultural Mutual Fund/ Policy FundAgricultural Mutual Fund/ Policy Fund - Balance of AML in 2005 : KRW 127 trillion- Balance of AML in 2005 : KRW 127 trillion - Balance of PL in 2005 : KRW 27.7 trillion- Balance of PL in 2005 : KRW 27.7 trillion
Profile of Main Farm Loans
Farm Facility
FarmOperation
FamilyLiving
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 Agricultural Mutual Fund - For all farmers - For the use of family living and farm production - A kind of commercial loans
Integrated Farm Loan (IFL) System
ConsultationConsultationLoan Loan Appraisal & Appraisal &
LendingLending
Credit Credit AnalysisAnalysis
Loan CounselLoan Counsel
Help farm operators to achieve their goalsHelp farm operators to achieve their goals
Types of Consulting Services
BookKeeping
RiskForecast
Loan Payment
FinancialPlan
Financial Diagnosis
PriceInfo.
InvestmentAnalysis
LoanProgram
NACFConsulting Services
BeforeInvestment
AfterInvestment
- Feasibility of Investment- Facility-loan Programs- Future Price of FP
Interests of FO
- Profitability- Effective Management- Operational-loan Programs- Loan Payment Schedule
(Financial aspect)
Price Analysis System
Financial Planning (Budgeting)Financial Planning (Budgeting)
Planning tool that contains estimates of production costs and returns based on the current or expected economic environment
Enterprise 1Budgeting
Enterprise 2 Budgeting
Enterprise 3 Budgeting
MonthlyCash Flow
Monthly DebtPayment Schedule
F/S
Financial Stress Test& Grouping
PropertyInformation
DebtInformation
Book Keeping SoftwareBook Keeping Software
Rural economy
(non-ag)
(Customer driven)
Bulky
Face to face transaction
Manual shipping
Changes in Agricultural Marketing
Collector, Traditional Market Big Retailer
Sorted & Standardized products
Brand names, POS, EDI
Machine, palletizing
(Food system)
Rural economy
(non-ag)
(Customer driven)
Producer(farmer)
Collector
Shipper
Wholesaler
New Agricultural Marketing System
Conventional SystemNew System
Producer(farmer)
APC(201)
AMC
Consumer
6 steps4 steps
Retailer
Consumer
• Chemical Fertilizers, Chemical Fertilizers, Agro-chemicals, Agro-chemicals, Farm Machinery, Feedstuff,Farm Machinery, Feedstuff, Petroleum, Tax-free farm fuelsPetroleum, Tax-free farm fuels
• Stable & timely supply at reasonable pricesStable & timely supply at reasonable prices
• Agro-chemical and fertilizer companiesAgro-chemical and fertilizer companies
• Seedling centerSeedling center
Providing farm supplies
• A modernized marketing facility conducting A modernized marketing facility conducting various post-harvest processes various post-harvest processes
ex) Drying, storing, processing, andex) Drying, storing, processing, and packaging of ricepackaging of rice
• Value added processValue added process• Number of RPCs run by Nonghyup : 181Number of RPCs run by Nonghyup : 181
Rice Processing Complexes(RPC)
packaging drying
• Agricultural Produce Complex (APC) : 201Agricultural Produce Complex (APC) : 201 - Pre-cooling, pre-drying, sorting, storing, - Pre-cooling, pre-drying, sorting, storing, packaging, cleaningpackaging, cleaning• Collection Points : 1,943Collection Points : 1,943
Development of Post-harvest Technology
• Marketing centers in urban areas as an alteMarketing centers in urban areas as an alternative distribution channelrnative distribution channel
• Similar to large supermarket or discount stoSimilar to large supermarket or discount storesres
• Transaction based on private contract with Transaction based on private contract with producers, not based on auctionproducers, not based on auction
• Engaged in both retail and wholesaleEngaged in both retail and wholesale
Agricultural Marketing Complexes (AMC)
• First introduced in 1970First introduced in 1970
• Hanaro Marts (retail outlets) : 2,183 storesHanaro Marts (retail outlets) : 2,183 stores- Unique cooperative stores- Unique cooperative stores
• Internet commerce : 1,395 itemsInternet commerce : 1,395 items
Retail business (Hanaromarts)
Hanaromart Distribution center
• Cyber-marketingCyber-marketing - KRW 95.5 billion in 2005- KRW 95.5 billion in 2005• POS (Point of sales) SystemPOS (Point of sales) System• EDI (Electronic Data Interchange)EDI (Electronic Data Interchange)
E-commerce
• Analysis of pesticide residueAnalysis of pesticide residue- Food safety center- Food safety center
• Education on food safety Education on food safety issues & the use of pesticidesissues & the use of pesticides
• Traceability : HACCP/GAPTraceability : HACCP/GAP
* Beef History Tracking System* Beef History Tracking System
Food safety & consumer protection
• Transport farm products to the collecting points, eTransport farm products to the collecting points, eg. cooperative marketing centers or processors g. cooperative marketing centers or processors
• Advance payments to farmers for consigned comAdvance payments to farmers for consigned commodities - modities - financial supportfinancial support
• Dissemination of agricultural marketing informatioDissemination of agricultural marketing information to producersn to producers
Role - Member Cooperatives
• Planning and guidance services for cooperPlanning and guidance services for cooperative marketingative marketing
• Operation of cooperative marketing centersOperation of cooperative marketing centers
Role – the NACF (Federation)
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
