The Farmers Association Act Article 5

For conducting business listed in the preceding article, a Farmers’ Association at any level may, with approval from the competent authority, establish a joint management organization to conduct the business jointly, and may thereby conduct transactions directly with individual members. Such joint management organization will be a juridical person, the organizational and operational regulations of which shall be established by the central competent authority.A Farmers’ Association shall establish a credit department to conduct financial services for its members. Except as otherwise provided for in this Act, the credit department shall be governed by the central competent authorities in accordance with the relevant provisions of the Banking Act. Subject to approval from the central competent authorities, the credit department of a Farmers’ Association may accept deposits from non-members.Approvals for the establishment and discontinuation of a Farmers’ Association credit department and its branches, suspension of operations, resumption of business and reorganization, standards for equipment and personnel, professional qualifications of directors, the scope and limitations of business operations, internal financing rules, various risk control ratios, and the use of surplus funds shall be governed by regulations established by the respective central competent authorities.The credit department of a Farmers’ Association shall establish an internal auditing system, and the regulations for its implementation shall be established by the relevant central competent authority.Agricultural banks shall be responsible for giving guidance on the operations of Farmers’ Association credit departments and for facilitating their funding. Regulations thereon shall be established by the relevant central competent authority in consultation with the Central Bank.Regulations on the handling of overdue loans, accounts receivable, and non-performing loans by Farmers’ Association credit departments shall be established by the relevant central competent authority.A Farmers’ Association may establish an insurance department to accept commissions for handling agricultural insurance business and to assist in matters related to insurance for farmers.To conduct the business referred to in the preceding Article, five or more Farmers’ Associations at any level may jointly invest in the formation of a company limited by shares. If such investment constitutes a major investment, it shall not be subject to the limitation prescribed in Paragraph 3 of Article 128 of the Company Act. Regulations governing review of the contributions or investments therein shall be prescribed by the relevant central competent authority.