South Korea’s agricultural and livestock sectors are seeking ways to keep business afloat amid concerns the new anti-corruption law that came into force last Wednesday would freeze market demand for their major products.
The Improper Solicitation and Graft Act bans members of government agencies, private education institutions, and media outlets from giving and receiving meals priced over 30,000 won ($27), presents over 50,000 won and monetary gifts over 100,000 won.
Also known as the “Kim Young-ran Act” after the former chief of the Anti-Corruption and Civil Rights Commission who initiated the drive in 2011, the new law is geared to transform long-rooted business customs such as building ties through expensive gifts and meals.
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A couple running a flower farm in North Chungcheong Province trim orchids. Pots with orchids are often sent to recognize promotions or the opening of new businesses in Korea. Yonhap |
The legislation had triggered the biggest protests from local farmers, cattle-raisers, fishermen and food retailers, as well as small and mid-sized firms. Their peak seasons fall around the Chuseok and Lunar New Year holidays, when Koreans traditionally exchange expensive gift sets of high-quality beef, premium fruits, dried fish and ginseng in displays of gratitude.
The Korea Rural Economic Institute predicts the nation’s agriculture, livestock and fisheries industries will lose 900 billion won in sales per year, as the new legislation, which affects some 4 million people, diminishes the popularity of such high-end items on special occasions.
Alongside farmers and cattle-raisers, flower shop owners selling “hwa-hwan,” or high-priced standing flower arrangements often sent to events such as weddings and funerals as a show of respect here, had protested they could go out of business.
Despite initial backlash, the nation’s agricultural sector appears to have come to terms with the new anti-graft law. Related stakeholders have begun to experiment with new products and initiatives, though it is still too early to discern if their new strategies could help raise their viability.
For instance, Hoengseong Chukhyup Hanwoo -- a major seller of expensive, premium Korean beef hailing from Hoengseong County, a region famous for its high-quality cows -- has introduced new beef packages priced under 50,000 won and dine-in menu options priced under 30,000 won.
“Having taken a direct blow from the Kim Young-ran Act, we decided to come up with new menu items accordingly,” a representative from Hoengseong Chukhyup Hanwoo said. “Though we can’t make much of a profit (off such cheaper items), we have no other choice but to follow the law’s direction.”
Last Friday, a Hongcheon-based Korean beef cooperative released a rare statement heralding the new anti-graft law and instead expressed alarm over the law’s potential to portray Korean beef as an item exchanged for bribery and corruption.
“It is inevitable that the Kim Young-ran Act will shrink the Korean beef industry. But what’s more concerning is how buying Korean beef is being portrayed as a corrupt deed. The local beef industry must make efforts to change this perception,” the cooperative said in a statement.
The Korea Florist’s Transworld Delivery Association has even begun a “1 Table 1 Flower” campaign to encourage new forms of flower consumption by the wider public as the “hwa-hwan” culture gradually fades out.
Meanwhile, the government has been eager to display its support for the industries that will be hit hard by the Kim Young-ran Act.
The National Agricultural Cooperative Federation, better known as Nonghyup, recently showcased new, simplified gift sets priced under the law’s 50,000 won price ceiling.
Led by the slogan “low prices, best quality,” Nonghyup launched smaller gift sets priced around 40,000 won by using simplified packaging and shifting the contents.
The Ministry of Agriculture, Food and Rural Affairs has been pushing for similar actions as well.
“The first step toward fighting corruption should not lead to the downsizing of an entire industry,” Agriculture Minister Kim Jae-soo said during a meeting at Nonghyup headquarters last Friday.
“We will actively draw up new measures to minimize the damages the law could pose on the related industries,” Kim said.
Led by Lawmaker Yun So-ha of the minor opposition Justice Party, the National Assembly has begun reviewing plans to provide partial funding as well as tax breaks for agricultural producers.
“We aim to uphold the initial goal of the anti-corruption law while downsizing the unintended damages that the nation’s agricultural sector would sustain for the next three years,” Yun said.
By Sohn Ji-young (
jys@heraldcorp.com)
