Seosamseok: "Nonghyup's Lack of Measures for Military Meals Causes Severe Damage to Farmers"

Military Supply Procurement Amount Drops by 180.5 Billion Won in 2 Years
Concentration on Private Contracts Despite Decrease in Farmer Supply
Subsidiary Cafeterias Entrusted to 'Large Corporations'

Seo Samsuk Congressman

Although the procurement volume and amount of agricultural and livestock products for military meals managed by the Ministry of National Defense have significantly decreased, there are concerns that farmers are suffering greater damage due to the delayed response and lack of measures by Nonghyup, which is responsible for military supply projects.

According to the National Assembly inspection data submitted by Seo Sam-seok, a member of the Democratic Party of Korea (Yeongam·Muan·Shinan), to the Ministry of National Defense and Nonghyup, Nonghyup's military supply business performance has decreased by 180.5 billion KRW over two years, from 594.5 billion KRW in 2021 to 414.0 billion KRW in 2023, following the opening of the military meal market by the Ministry of National Defense.

The military meal market has been supplied 100% through direct contracts by agricultural cooperatives according to the "Agreement on Planned Production and Procurement of Military Meal Items" signed between the Ministry of National Defense and Nonghyup in January 1970. However, after controversies over poor military meals and hygiene issues arose in 2021, the Ministry of National Defense announced the "Military Meal Private Consignment Pilot Project," which introduces private consignment and competitive procurement of military supplies by 2026.

Accordingly, contract companies are now responsible for cooking, serving, and procuring ingredients, and the Ministry of National Defense has been reducing Nonghyup's procurement contract ratio by 20-30% annually, aiming to abolish direct contracts. However, due to opposition and concerns from regional agricultural cooperatives and farmers, the direct contract ratio was temporarily maintained at 70% until 2025 in 2022.

The military meal pilot project currently involves large corporations such as Samsung Welstory, Hanwha Foodist, Pulmuone, and Ourhome, operating cafeterias for 26 army, navy, and air force units, serving 35,000 personnel. Other major companies like Shinsegae and CJ are also participating in bids for the military meal market, which is worth about 2 trillion KRW annually.

Although Nonghyup operates food service and group meal businesses through its affiliate Nonghyup Distribution, it has refused the Ministry of National Defense's request to participate in the military meal private consignment, citing business feasibility reviews, and has submitted opinions to maintain direct contracts. Moreover, contrary to the opposition from regional agricultural cooperatives and farmers against large corporations bidding for military meals, it was confirmed that Nonghyup affiliates' employee cafeterias have consignment contracts with large catering companies such as Samsung Welstory and Ourhome.

Nonghyup's consistent lack of measures regarding the opening of the military meal market and its sole focus on maintaining direct contracts are increasing farmers' concerns. The procurement ratio of raw agricultural products and processed foods for military supply, which was 55% raw and 45% processed in 2021, reversed to 29% raw and 71% processed in 2023 due to increased processed food deliveries. The supply volume of agricultural and livestock products also decreased significantly from 62,266 tons in 2021 to 37,841 tons in 2023, a reduction of about 25,000 tons, expanding farmers' damages.

Assemblyman Seo stated, "Despite the rapidly increasing damages to regional agricultural cooperatives and farmers, Nonghyup is pleading only to maintain direct contracts without efforts to secure delivery competitiveness or improve profitability," and warned, "Nonghyup's incompetence could cause great harm to regional agricultural cooperatives and farmers."

He added, "A comprehensive plan should be promptly prepared to strengthen military supply competitiveness through activation of processed food development and supply improvement by Nonghyup, and furthermore, to expand farmers' military supply channels by mandating domestic and regional ingredients and establishing a Nonghyup private consignment corporation."