Cooperative Advantages & Korean Agricultural Cooperative Development by Dr. Chan-Ho CHOI General Manager, International Cooperation Office National Agricultural Cooperative Federation (NACF) Republic of Korea & Secretary General International Cooperative Agricultural Organization (ICAO) ICA–AP 5th Cooperative Forum Hanoi, Vietnam, December 4, 2008

2 Financial Crisis Triggered by US Subprime Mortgage MeltdownFinancial Crisis Triggered by US Subprime Mortgage Meltdown Unregulated Capitalists’ GeedUnregulated Capitalists’ Geed Global Economic SlumpGlobal Economic Slump

3 …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 …

4 To compete against the IOFs in the global market, co-op managements need to learn the best practice of IOFs ►► In downturn, however, focus on its own advantage Cooperative is a business model which survives more than 200 years NACF’s 47 years experience from scratch to top ►► Cooperative Advantages ►► Cooperative Advantages

5 Concentrate on Cooperative Advantages Owned and Used by Members Contributing to the communities Democratically controlled Ethical Management Cooperation among Cooperatives

6 Yardstick in the Market Better Price for Farmers Rural Area : Collective Marketing Urban Area : wholesale & retail marketing channels Logistic Centers, Hanaro Clubs, Hanaro Marts Mutual Credit Service Eradicated Rural Usury Loan Sources : deposits by members & NACF’s urban banking more than 80% market share in the rural loan markets

7 Cooperative business contributes to local economy Daegu-Kyungbook Apple Juice Factory Saemaul Movement & NACF’s Role Leader of community development Public Aspects Recognized by Government Policy funds for marketing facilities Municipals’ Consignments of their treasury First Branch at Korean Presidential Mansion

8 After 1980s democratization, NACF took a huge leap In 21C In 21C 4 th Largest Cooperative by ICA Global th Largest Cooperative by ICA Global th Largest Bank in the world by Banker Magazine 90 th Largest Bank in the world by Banker Magazine Pros & Cons of Democratic Control Fair, Prudence, Greatest Happiness of Greatest Number Long Process, Layman’s Decision ►► Professional Managements with MOU SPEED MANAGEMENT

9 HonestOpenness Social Responsibilities Caring for Others Honest Marketing Practice Melamine Scandal & Food Safety Reliable & trustworthy NACF ►► 100% domestic produce + high quality ►► 100% domestic produce + high quality Winning Grands Prix of CSMA & Korea Marketing Awards since 2000

10 Social Responsibilities No.1 Bank in Social Responsibility Practice To give back the earnings to the society To contribute to the community ► Co-op Friendly Atmosphere ►► Bring back the benefit for co-op and its members

11 National, Regional, International Cooperation among Cooperatives ►► Reciprocally and multilaterally Vulnerable to the Global Competition ► Difficulties in Overseas Expansion ► Difficulties in Overseas Expansion Go abroad with the aid of local cooperatives ► NACF & Credit Agricole : NH-CA Asset Management ► NACF & Credit Agricole : NH-CA Asset Management ICA at the Global Aids thru ICA to Tsunami Recovery & Chinese Earthquake Victims ►► Int’l Biz Network to flourish w/ the Co-op Alliance

12 Thank You Thank You Cam On