Evaluation of the Economic Business Promotion Initiated by NAFC
Published on 6 October 2020
Published by Industry & Employment Analysis Division of the Economic Analysis Bureau
The National Agricultural Cooperative Federation (NAFC) was established under the National Agricultural Cooperative Federation Act for the purpose of elevating the economic, social and cultural status of stakeholders in the agricultural industry while contributing to the balanced development of the national economy, based on a sovereign cooperative organization of such stakeholders. Since 2012, the credit business and economic business divisions under NAFC have been separated, and NAFC’s businesses have been restructured to promote its economic businesses.
Towards the end of 2020, a review was conducted as to whether the initially set targets for NAFC’s economic businesses have been reached and whether the NAFC business restructuring backed by large-scale investments and fiscal support was effective, thereby attempting to draw improvement measures to advance NAFC economic businesses in the future. An evaluation conducted against criteria involving four stages—planning, implementation, yield and outcomes—has primarily drawn the following implications:
First, NAFC needs to meticulously plan and implement its follow-up economic businesses by incorporating ongoing transformations of the agricultural industry structure such as the increasing number of corporate farms and the declining volume of agricultural production; the transformation of the distribution structure such as the expansion of the online distribution channel; economic factors including the onset of the fourth industrial revolution; as well as the probability of NAFC to take related action.
Second, NAFC needs to make concerted efforts to faithfully complete its remaining tasks before the 2020 business structural reform is concluded, while the government should ensure that no adjustments are made to its pre-disclosed pledges in order to secure policy credibility and fiscal stability.
Third, NAFC must strive to reach its initial objectives to the greatest extent possible in terms of farm produce distribution market share and share of sales conducted via NAFC, while the government should complement its feedback system so that the economic business evaluations may well serve as a means to boost the NAFC’s economic business outcomes.
Fourth, NAFC needs to make efforts to ensure that effects are noticeable in the agricultural sector and farms, by incurring higher agricultural incomes through an increase in the prices paid to farmers as well as by conducting effective businesses to allow members of the cooperative to utilize the NAFC’s economic businesses more extensively. Moreover, by reinforcing its financial competitiveness and promoting its economic businesses, the NAFC should enhance its business achievements and profitability in its financial and economic divisions as part of efforts to improve its deteriorated financial structure.