Minister Song Mi-ryung of the Ministry of Agriculture, Food and Rural Affairs cited NongHyup's governance and internal control systems as problems and stressed the need for reform across the entire system. The remarks follow a special audit of the National Agricultural Cooperative Federation that exposed suspected misconduct and gaps in organizational operations.
The Minister said at a regular press briefing held at the Government Complex Sejong on the 12th, "NongHyup is a cooperative, so the members' views should be reflected democratically, but there is a problem with a governance structure that does not do so," adding, "Shouldn't it be fixed?"
Song emphasized, "The reform direction is to correct what distorts the spirit of cooperatives due to inadequate systems." The Agriculture Ministry plans to establish a "NongHyup reform task force" (working title) this month and review improvement measures for the overall electoral system and governance, along with follow-up legislation.
Earlier, the Agriculture Ministry conducted a special audit of the National Agricultural Cooperative Federation and the NongHyup Foundation and on the 8th announced interim findings that included personnel and organizational management issues and failures of internal control mechanisms. The government plans to soon establish a pan-government joint audit framework involving the Office for Government Policy Coordination, the Financial Services Commission, and the Financial Supervisory Service to carry out additional inspections.
The Minister said, "By March, we will operate a joint government audit framework to investigate what is lacking and take action where needed," adding, "We will pursue institutional reforms so that NongHyup can maintain its standing as a cooperative for farmers." Song also said, "For now, we are not considering what to do about any particular individual," but added, "There is an internal control problem, and our goal is to reform the system so internal controls work properly."
Regarding the special audit results, Song said, "Based on the interim findings, we have referred two cases for investigation and will refer additional cases as needed," adding, "We will take the strongest possible actions available."
The briefing also touched on prices and pending issues in agriculture and livestock. The Minister, addressing the rise in the won-dollar exchange rate, said, "We rely on imported agricultural products for materials and supplies used in processed foods, but so far there is no possibility that processed food prices will rise further," adding, "We expect processed food prices to remain stable as they are now." The government plans to support food corporations by maintaining quota tariffs and providing low-interest loans for materials and supplies purchases.
On rice prices, the Minister said, "They are up 15% from an average year, but down 8% from the peak," adding that additional measures will be announced after upcoming statistics are released. On egg prices, Song said, "If avian influenza does not spread further, prices will stabilize."