Cooperative Advantages & Korean Cooperative Advantages & Korean Agricultural Cooperative DevelopmentAgricultural Cooperative Development

by

Dr. Chan-Ho CHOI

General Manager, International Cooperation OfficeNational Agricultural Cooperative Federation (NACF)

Republic of Korea &

Secretary GeneralInternational Cooperative Agricultural Organization (ICAO)

ICAICA––AP 5th Cooperative ForumAP 5th Cooperative ForumHanoi, Vietnam, December 4, 2008

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• Financial Crisis Triggered by US Subprime Mortgage Financial Crisis Triggered by US Subprime Mortgage MeltdownMeltdown

• Unregulated Capitalists’ GeedUnregulated Capitalists’ Geed

• Global Economic SlumpGlobal Economic Slump

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…there is an alternative secure, stable and sustainable model of business own and controlled by 800 million people worldwide.

Use their combined political and financial strength to put the same energy and drive into protecting the world’s people from the worst effects of the global recession …

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To compete against the IOFs in the global market, co-op To compete against the IOFs in the global market, co-op managements need to learn the best practice of IOFsmanagements need to learn the best practice of IOFs

►►►► In downturn, however, focus on its own advantageIn downturn, however, focus on its own advantage

Cooperative is a business model which survives more Cooperative is a business model which survives more than 200 yearsthan 200 years

NACF’s 47 years experience from scratch to topNACF’s 47 years experience from scratch to top

►► ►► Cooperative Advantages Cooperative Advantages

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Concentrate on Cooperative AdvantagesConcentrate on Cooperative Advantages

Owned and Used by Members

Contributing to the communities

Democratically controlled

Ethical Management

Cooperation among CooperativesCooperation among Cooperatives

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Yardstick in the MarketYardstick in the Market

Better Price for Farmers

Rural Area : Collective Marketing

Urban Area : wholesale & retail marketing channels

Logistic Centers, Hanaro Clubs, Hanaro MartsLogistic Centers, Hanaro Clubs, Hanaro Marts

Mutual Credit ServiceMutual Credit Service

Eradicated Rural Usury

Loan Sources : deposits by members & NACF’s urban banking

more than 80% market share in the rural loan marketsmore than 80% market share in the rural loan markets

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Cooperative business contributes to local economyCooperative business contributes to local economy

Daegu-Kyungbook Apple Juice FactoryDaegu-Kyungbook Apple Juice Factory

Saemaul Movement & NACF’s RoleSaemaul Movement & NACF’s Role

Leader of community developmentLeader of community development

Public Aspects Recognized by GovernmentPublic Aspects Recognized by Government

Policy funds for marketing facilitiesPolicy funds for marketing facilities

Municipals’ Consignments of their treasuryMunicipals’ Consignments of their treasury

First Branch at Korean Presidential MansionFirst Branch at Korean Presidential Mansion

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After 1980s democratization, NACF took a huge leapAfter 1980s democratization, NACF took a huge leap

In 21CIn 21C 44thth Largest Cooperative by ICA Global 300 Largest Cooperative by ICA Global 300 9090thth Largest Bank in the world by Banker Magazine Largest Bank in the world by Banker Magazine

Pros & Cons of Democratic ControlPros & Cons of Democratic Control

Fair, Prudence, Greatest Happiness of Greatest Fair, Prudence, Greatest Happiness of Greatest NumberNumber

Long Process, Layman’s DecisionLong Process, Layman’s Decision

►► ►► Professional Managements with MOUProfessional Managements with MOU

SPEED MANAGEMENTSPEED MANAGEMENT

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HonestHonestOpennessOpennessSocial ResponsibilitiesSocial ResponsibilitiesCaring for OthersCaring for Others

Honest Marketing PracticeHonest Marketing Practice

Melamine Scandal & Food SafetyMelamine Scandal & Food Safety

Reliable & trustworthy NACFReliable & trustworthy NACF

►► ►► 100% domestic produce + high quality100% domestic produce + high quality

Winning Grands Prix of CSMA & Korea Marketing Winning Grands Prix of CSMA & Korea Marketing Awards since 2000Awards since 2000

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Social ResponsibilitiesSocial Responsibilities

No.1 Bank in Social Responsibility PracticeNo.1 Bank in Social Responsibility Practice

To give back the earnings to the societyTo give back the earnings to the society

To contribute to the communityTo contribute to the community

► ► Co-op Friendly AtmosphereCo-op Friendly Atmosphere

►► ►► Bring back the benefit for co-op and its membersBring back the benefit for co-op and its members

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National, Regional, International Cooperation among CooperativesNational, Regional, International Cooperation among Cooperatives

►► ►► Reciprocally and multilaterally Reciprocally and multilaterally Vulnerable to the Global CompetitionVulnerable to the Global Competition

► ► Difficulties in Overseas ExpansionDifficulties in Overseas ExpansionGo abroad with the aid of local cooperativesGo abroad with the aid of local cooperatives

► ► NACF & Credit Agricole : NH-CA Asset ManagementNACF & Credit Agricole : NH-CA Asset Management

ICA at the Global ICA at the Global

Aids thru ICA to Tsunami Recovery & Chinese Aids thru ICA to Tsunami Recovery & Chinese Earthquake VictimsEarthquake Victims

►► ►► Int’l Biz Network to flourish w/ the Co-op AllianceInt’l Biz Network to flourish w/ the Co-op Alliance

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Thank YouThank You

Cam On