Chairman Kim Byung-won of the National Agricultural Cooperatives Federation (NACF) delivered strict instructions to the heads of local NACF units on how to get the best price for farm produce. He also asked local autonomous organizations to do their part in getting the best prices for produce.
For a farmer, income from farms makes up a major portion of earnings and therefore, they should get the best prices for their produce to boost their income.
Since his inauguration in March, the letters from Chairman Kim were dispatched as part of the his major management strategy boost each farm household’s annual income to around 50 million won.
The chairman reinforced his message in the letters that farmers should get the best prices for their farm produce to boost their earnings, emphasizing the importance of local autonomous organizations in their regions to get proper prices for farm produce. NACF officials said Chairman Kim is the first CEO to make boosting farmers’ incomes an important priority for the NACF. The effort may enhance the competitiveness of farm produce in the country by hiking the farmers’ incomes around the country in the end.
According to NongHyup, Kim began his term with an inauguration ceremony followed by a visit to a new NongHyup education center in Goyang, Gyeonggi Province.
Kim's accession was the first leadership change in eight years for the cooperative, which has 2.35 million members, 432 trillion won in assets, 31 subsidiaries and 88,000 employees.
At his inauguration ceremony, Kim is expected to say that his leadership will be in line with the government's initiatives for a "creative economy" and that he will focus on creating jobs.
Initially, Kim pledged that NongHyup would be comprised of one federation and one holding company, scrapping one of two existing ones. But his promise is likely to face problems because the government opposes the plan.
Kim is also under investigation for alleged irregular campaign activities during his election, in which he replaced Choi Byung-won as chairman. Representatives elected Kim in January after a six-way competition.
Kim began his career at NongHyup in 1978 after receiving a bachelor's degree from Chonnam National University. From 1999 to 2014, he headed a NongHyup chapter in Naju, South Jeolla Province, for three consecutive terms.
In the meantime, NongHyup Financial Group will set aside loan-loss provisions of up to 1.8 trillion won (US$1.6 billion) this year due to its heavy exposure to debt-laden shipping and shipbuilding companies, the group's chairman said in an interview.
It seems inevitable for South Korea's second-largest bank by assets to shift to a net loss in 2016 from a net profit of 487 billion won a year earlier on sharply increased provisions, NongHyup Financial Chairman and CEO Kim Yong-hwan told Yonhap News Agency.
"We have already put aside about 1 trillion won to cover soured loans extended to STX Offshore & Shipbuilding Co. and Chang Myung Shipping both placed under court receivership. We will increase the loss reserves to 1.6 trillion won-1.8 trillion won this year, as some of our loans delivered to shipbuilders and shipping lines may turn into irrecoverable non-performing loans (NPLs)," Kim said.
NongHyup's move to raise the provisions is part of the group's efforts to improve its financial status through a one-time write-off known as a "big bath."
The write-off reduces a company's assets on the financial books and results in lower net profits for a given year. A big bath in a single year usually helps improve net-income results for the following years.
Currently, NongHyup Financial carries debt exposure worth 7.65 trillion won to the two industry sectors — shipping and shipbuilding — alone.
Cumulative loans extended by all local lenders to the two-most-troubled sectors reached 85 trillion won at the end of March, and 10 trillion won of them were NPLs, according to bank data.
_농협이념중앙교육원.JPG)
A scene of a ceremony on March 14, 2016, to open the NongHyup Ideological Central Education Center in Seoul.(Photos: NACF)
_농협 김병원.jpg)
