Japan is in the midst of population aging and falling birth rates, with the trend envisaged to accelerate. This not only indicates a decline in the number of consumers but also a drastic change in consumption patterns. Japan Agricultural Cooperatives (JA) should also restructure its business – not just production and sales but in every aspect – in line with the social changes. Their competition with private companies will intensify, but at the same time, cooperatives movement will face higher expectations to strengthen its cohesive power with clear-eyed perception for the future.
According to the population projections for prefectures released by the Ministry of Health, Labor and Welfare’s National Institute of Population and Social Security Research, population is expected to decline in all the prefectures in the period between 2020 and 2025, a clear signal that an undeniable trend of declining population is under way. The age structure is also undergoing drastic change.
In 2040, we will see a society where 36.1 % of the population in all prefectures in average will be aged 65 or over, meaning more than one in three people in the country will be senior citizens. The number of elderly residents is expected to increase rapidly particularly in metropolitan areas. In rural areas, the percentage of seniors will stay around 40 %, but the decline in their overall population will be spurred on. Serious population shrinkage is expected in prefectures where the aging of population is already proceeding, such as the Tohoku region, with Akita Prefecture predicted to post a 36% decline in population 30 years from now and all of the other prefectures except Miyagi expected to see a population drop of around 30%.
Meanwhile, the annual number of deaths is expected to near 1.7 million in 2040, and even with the number of births reaching nearly 700,000 annually, the population will decline by 1 million every year. “If the number of births remains as predicted, it will be like a small prefecture with the population of around 1 million disappearing every year,” said Makoto Kawai, chief researcher at JA Kyosai Research Institute.
The society marking continued economic and industrial growth backed by population increase is a thing of the past. The unprecedented level of population decrease and aging will lead to a diminish in tax revenues and huge increases in medical and elderly care costs, which will inevitably cause fundamental changes in economy, industries and people’s lives. Communities will also face changes. As the number of consumers decreases, competition between cooperatives and private companies will further intensify in all areas including credit financing, mutual aid, social services and welfare.
With population aging and decreasing, more consumers will begin to think that quality and convenience matters more than quantity. If more elderly residents stop driving their own cars, more people will shop in nearby stores or mobile stores rather than going to suburban shopping malls. In the shops, more people will prefer to buy products sold in small-portion packages, vegetables all prepared and packed or sold in ready-to-eat dishes, the products which can be cooked easily at home without having to dispose of waste.
Ways of selling products will also have to be changed along with the changing consumer needs. Conflicts between producers and distributors will intensify on how to divide up profits from such value-added products. Local communities will have to respond more to the needs of elderly residents. Mutually-aided cooperative societies will have a greater role to play rather than profit-oriented market principles. No organization can survive unless it adapts to social changes. Changing times also bring new opportunities. Let us meet the challenges with clear eyes to the future.
(June 6, 2013)