Agriculture and livestock industry businesses are increasingly nervous as the so-called ‘Kim Young-ran Law’, a law prohibiting illegal solicitation and bribery, will soon come into effect. (Image : Kobizmedia / Korea Bizwire)
SEJONG, August 3 (Korea Bizwire) – Agriculture and livestock industry businesses are increasingly nervous as the so-called ‘Kim Young-ran Law’, a law prohibiting illegal solicitation and bribery, will soon come into effect.
The tension is derived from concerns that the consumption of agricultural, animal and marine products will drop because criminal penalties could imposed on those who offer civil servants the traditional gifts of beef or dried yellowtail fish on major holidays.
Limits on payments for gifts or meals are set by the enforcement ordinance, which falls under the criteria of a Presidential decree. The Anti-Corruption and Civil Rights Commission will draw up a preliminary announcement of the legislation draft during the month of August.
At the debate on enforcement ordinance held in May, a 100,000 won limit for gifts, and a range between 50,000 won to 70,000 won for meals were thought to be reasonable.
Under the current Code of Conduct for Public Officials, the maximum amount permissible for food and gifts is 30,000 won and 50,000 won respectively.
Producers in the agriculture, livestock and fishery industries are concerned that once the gift limit is set at 50,000 won, demand for their products will decrease, and prices, as well as consumption, will drop.
Over half of the holiday gifts that consist of agricultural, animal and marine products cost more than 50,000 won.
According to the Nonghyup Yangjae market, sales of fruit gifts boxes were the highest among gifts that cost between 50,000 won and 80,000 won. When it comes to beef, 93 percent of the Hanwoo (Korean beef) gift sets cost over 100,000 won.
The Livestock Industry Economic Research Center estimates that if sales of Hanwoo fall 50 percent, the value of the loss to producers would be 415.5 billion won, or 249.3 billion won if sales only fall 30 percent after the enforcement of the ‘Kim Young-ran Law’.
The marine products industry shares the same concerns. A significant 22 percent of sales occur during the two main holidays, New Year’s and Chuseok (Korean Thanksgiving). For dried yellowtail fish, 39 percent of total sales occur during the two holidays, and it is hard to find a gift set selling for under 50,000 won due to a rise in production costs. As well, more than half (55 percent) of the marine products gift sets sold during the holidays cost over 50,000 won.
The National Federation of Fisheries Cooperatives predicts that sales will drop by 50 percent after the ‘Kim Young-ran Law’ is enacted, leading to a loss of up to 730 billion won.
The National Agricultural Cooperative Federation Council and the General Association of Korean Fisheries Industry sent a recommendation to the Anti-Corruption and Civil Rights Commission asking for agricultural, livestock and marine products to receive an exemption under the limits of the ‘Kim Young-ran Law’.
Another industry fearing the enactment of the ‘Kim Young-ran Law’ is the floricultural industry. As gifts and tributes generate around 80 percent of flower sales, the regulations will have a big impact. The domestic floricultural industry was already hit hard in 2011, when a limit of 30,000 won was set for flower gifts to civil servants. Due to the blow, the number of horticultural farms decreased from 12,859 to 9,147, according to the Korean Agro-Fisheries & Food Trade Corporation (aT).
Officials at the aT expressed concern about the effects of the new law on flower sales. “Even under the current regulations, a negative awareness was cast on flowers as gifts, slowing down the consumption of flowers. Once it becomes a target of receiving criminal penalty, sales will drop for sure.”
The ‘Kim Young-ran Law’ applies to government officials, journalists, and staff and the board of directors at private schools, and legislates that individuals who receive money, gifts or favors over an amount of 1,000,000 won will be punished by law. The law will enter effect on September 28, 2016, after a year and half grace period.
By M.H. Lee (mhlee@koreabizwire.com)
