SEOUL, Oct. 7 (Yonhap) -- The National Agricultural Cooperative Federation (NACF) on Friday said that it cannot accept a 4 trillion won (US$3.39 billion) support package proposal by the government, claiming that more money is necessary for the reform of the cooperative entity.
Last month, the government said it will ask parliament for the package proposal to help reform the NACF, known as Nonghyup in Korean.
The NACF 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.
In addition, Nonghyup will receive an investment of goods to the value of up to 1 trillion won from the Korea Finance Corp.
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 beef up 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.
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, while also expanding and strengthening markets for the country's farmers.