ID :
208512
Wed, 09/21/2011 - 10:01
Auther :
Shortlink :
https://oananews.org//node/208512
The shortlink copeid
Seoul proposes $3.5 bln support package for Nonghyup
SEOUL, Sept. 21 (Yonhap) -- The government will ask parliament for 4 trillion won (US$3.5 billion) to help reform the National Agricultural Cooperative Federation (NACF), the agriculture ministry said Wednesday.
The NACF, known as Nonghyup in Korean, is set to undergo the most drastic reform in its history early next year, splitting the organization into a consumer credit firm and a retail service provider that sells agricultural products.
Under the government proposal, the NACF will raise 3 trillion won through borrowing or issuing bonds, on which the government will pay the interest, which will amount to about 150 billion won a year at a rate of 5 percent, according to the Ministry of Food, Agriculture, Forestry and Fisheries.
How long the government support will last has yet to be decided but, when asked if that might be more than 10 years, a ministry official replied, "I don't think it will take that long."
In addition, Nonghyup will receive an investment of goods to the value of up to 1 trillion won from the Korea Finance Corp.
"A dividend for the investment will be set in future negotiations but it will not be as high as market rates so as to maximize the government support for Nonghyup," the official told reporters.
A budget bill that reflects the support plan will be submitted early next month to the National Assembly.
The NACF earlier sought 6 trillion won in government support as it claimed it would need an additional 12.26 trillion won to create a new financial arm and intensify its retail services. It said it could come up with 6.26 trillion won on its own.
The government, however, decided the reform and division would require only 10.26 trillion won, thus needing only 4 trillion won in government support.
Cuts were made primarily in plans to expand the organization's retail services, to which most government support will be directed.
The NACF currently has only about 270 billion won invested in its retail business. That amount will increase to 8 trillion won when the planned reform is completed in 2016, also enlarging and strengthening markets for the country's farmers.
The NACF, known as Nonghyup in Korean, is set to undergo the most drastic reform in its history early next year, splitting the organization into a consumer credit firm and a retail service provider that sells agricultural products.
Under the government proposal, the NACF will raise 3 trillion won through borrowing or issuing bonds, on which the government will pay the interest, which will amount to about 150 billion won a year at a rate of 5 percent, according to the Ministry of Food, Agriculture, Forestry and Fisheries.
How long the government support will last has yet to be decided but, when asked if that might be more than 10 years, a ministry official replied, "I don't think it will take that long."
In addition, Nonghyup will receive an investment of goods to the value of up to 1 trillion won from the Korea Finance Corp.
"A dividend for the investment will be set in future negotiations but it will not be as high as market rates so as to maximize the government support for Nonghyup," the official told reporters.
A budget bill that reflects the support plan will be submitted early next month to the National Assembly.
The NACF earlier sought 6 trillion won in government support as it claimed it would need an additional 12.26 trillion won to create a new financial arm and intensify its retail services. It said it could come up with 6.26 trillion won on its own.
The government, however, decided the reform and division would require only 10.26 trillion won, thus needing only 4 trillion won in government support.
Cuts were made primarily in plans to expand the organization's retail services, to which most government support will be directed.
The NACF currently has only about 270 billion won invested in its retail business. That amount will increase to 8 trillion won when the planned reform is completed in 2016, also enlarging and strengthening markets for the country's farmers.
