Moon Geumju: "Agricultural Disaster Insurance Has Become a Profit-Generating Tool for Nonghyup"

4 Trillion Won in Public Funds... Farmers Neglected as Nonghyup Enjoys a "Profit Bonanza"
"Transition to State Compensation through the Establishment of an Agricultural and Fisheries Disaster Fund"

Moon Geumjoo, member of the Democratic Party of Korea.

Moon Geumju, a member of the Democratic Party of Korea representing Goheung, Boseong, Jangheung, and Gangjin in South Jeolla Province, criticized the current agricultural disaster insurance system during the National Assembly audit of the Ministry of Agriculture, Food and Rural Affairs on October 14, stating that "the current agricultural disaster insurance system has degenerated into a tool for generating profits for the National Agricultural Cooperative Federation, rather than serving as a minimum safety net for farmers." He called for a fundamental overhaul of the system.

Moon pointed out that while the National Agricultural Cooperative Federation, or Nonghyup, is making huge profits from its insurance business, which is operated on the basis of large sums of taxpayer money, the actual compensation provided to farmers remains insufficient.

According to Moon, over the past five years, a total of 5.8119 trillion won has been allocated to agricultural disaster insurance, with a staggering 4.7 trillion won of this amount coming from public funds. Despite this massive injection of public money, the compensation perceived by farmers falls short of expectations. The subscription rate for crop disaster insurance, which was 45% in 2020, has increased by only 9 percentage points to 54.2% over five years. The amount of insurance payouts has also shown little improvement, further increasing the burden on farmers.

In this context, Nonghyup, which operates the insurance business on a consignment basis, has reportedly made significant profits. Over the past five years, Nonghyup's insurance premium income totaled 5.8119 trillion won, while insurance payouts amounted to 4.965 trillion won, resulting in a simple profit margin of 840 billion won. Nonghyup, which should prioritize the interests of farmers as a cooperative, is instead being criticized for focusing solely on expanding profits for its financial holding company and increasing performance bonuses for executives and employees.

In fact, over the past five years, the net profit of Nonghyup Financial Holdings has increased by 41%, and performance bonuses for Nonghyup Bank executives and employees have more than doubled during the same period. While these financial performance indicators have improved significantly, there is criticism that the public role of agricultural disaster insurance has been undermined in the process.

Moon stated, "Farmers are buried in the land, while Nonghyup is buried in money," and criticized that "Nonghyup has transformed from a safety net for farmers into a tool for profit generation centered on its financial holding company." He further emphasized, "Agricultural disaster insurance should serve as the minimum shield for farmers to survive disasters, but now even that shield has become a means for Nonghyup to generate profit. At this rate, neither the survival of farmers nor the sustainability of agriculture can be guaranteed."

To address these structural issues, Moon argued for a bold restructuring of the current insurance-centered disaster compensation system and a transition to a state-responsible compensation system through the establishment of a "Disaster Countermeasure Fund for Agriculture and Fisheries." He also proposed specific measures, such as gradually reducing agricultural disaster insurance over the next 10 or 20 years and mandating that 50% of the excess insurance profits generated by consignment agencies like Nonghyup be fully returned to the Disaster Countermeasure Fund for Agriculture and Fisheries.

Meanwhile, Moon reiterated, "By reinvesting the returned funds into support for small-scale farmers, disaster recovery, and disaster prevention projects, we must establish a tangible safety net that farmers can truly feel."