The ruling Liberal Democratic Party on Monday, June 9, decided to transform the Central Union of Agricultural Co-operatives (JA-Zenchu), the headquarters and core of the JA group, into a new entity.
The LDP’s draft plan, proposed at the Monday’s meeting of agricultural-related working groups, said a new system will be created taking into account debates within the JA group to reform itself, and a transition period of a few years will be set. Related bills will be submitted to the ordinary Diet session next year.
The government’s Regulatory Reform Council proposed that JA-Zenchu be stripped of its legal authority to supervise management of primary agricultural co-operatives and be transformed into a structure without power, such as a think tank. However, LDP lawmakers close to the agricultural industry pressured the party to make its plan respect the JA group’s own decision making.
Hiroshi Moriyama, head of the LDP’s project team to discuss reform of the JA group, said Monday, June 9, that the party has agreed on the plan with the Prime Minister’s Office, adding that the JA-Zenchu and prefectural federations will maintain their roles in the future.
The draft plan is expected to be approved within the party later this week and put under discussion with its coalition partner New Komeito to be reflected in the Regulatory Reform Council’s final report scheduled to be released on Friday, June 13.
However, prospects remain unclear as there is a possibility that the plan will go under scrutiny and revision before the government submits related bills to the ordinary Diet session next year.
The draft plan also urges the JA group to reform itself “with a strong sense of danger” in the coming five years, indicating the need for a root and branch review of the group’s structure.
The party’s plan, aimed at developing agriculture and rural villages, calls for a reform of the JA group to become an organization which places top priority on two factors – actively conducting economic activities to help increase incomes of farmers, especially those regarded as ambitious and promising, and providing appropriate services needed in aging and depopulating agricultural communities.
It urges the JA group to conduct drastic reform in certain areas in order to avoid criticisms of the group from heating up again, but it refrains from using strong expressions, considering that the group is a private, autonomous organization.
Regarding JA-Zenchu, the plan states that its role should be reviewed from the viewpoint of appropriately supporting primary agricultural co-operatives. It proposes the system be transformed into a new one, taking into account that the number of primary farm co-ops has declined to 699 this year, compared with the time when the organization was first established 60 years ago with more than 10,000 primary co-ops nationwide as members. A transition period should be set as in the cases of other revisions for corporate-related laws, it says, which is likely to be roughly five years.
The plan says the government should come to conclusion on the issue, based on the JA group’s self-reform plan, in time for the ordinary Diet session which will begin next January.
As for the National Federation of Agricultural Co-operative Associations (JA Zen-Noh), the plan says it supports the Regulatory Reform Council’s proposal of turning the federation into a joint-stock corporation, but did not give a specific deadline, which indicates the final decision making is put off.
The party also put off making decisions on the issue of restricting use of JA services by non-farmer members, another proposal made by the council.
Concerning the transfer of primary agricultural co-operatives’ credit business to the Norinchukin Bank, the plan states that individual farm co-ops should be encouraged to choose by themselves on what to do.
As for mutual aid businesses, the government’s council proposed that the business be transferred to the National Mutual Insurance Federation of Agricultural Co-operatives (JA-Kyosairen) and primary farm co-ops become agencies, but the LDP’s plan only goes as far as noting that the federation should come up with measures to reduce workloads of primary farm co-ops, without changing the current system.
Regarding the prefectural welfare federations of agricultural co-operatives (JA-Koseiren), the plan says they can be turned into social medical care corporations if restrictions to non-members become a barrier to offering necessary services as a public medical institution.
(June 10, 2014)