【Editorial】 Agricultural co-ops reform – for whom and for what? (May 14, 2015)


The Diet will begin deliberations on the bill to revise the Agricultural Co-operatives Society Law on Thursday, May 14. The government says it places top priority on the bill in the current Diet session. The point at issue will be whether the revision will realize the government’s goal of increasing farmers’ income. The bill includes revisions on issues which have much to do with the essence of agricultural co-operatives, such as the scope of their business and who should be assigned to their board of directors. As the revision will be a historical shift for the Japanese agricultural co-ops group, we urge lawmakers to conduct thorough deliberations, taking into account standpoints of farmers and local residents. The government must carefully explain and build consensus on for whom and for what the reform is going to be carried out.

The bill to revise the law was finally submitted to the Diet after almost a year of debate and ironing out of conflicting views among the government, the ruling bloc and the Central Union of Agricultural Co-operatives (JA-Zenchu). Despite the fact that it represents a major reform to be conducted for the first time in 60 years, the discussion on the issue was controlled by the prime minister’s office the whole time, lacking farmers’ perspectives. Prime Minister Shinzo Abe’s administration regards the agricultural co-ops as the typical regulatory bedrock and insisted on achieving reform under the slogan of making agriculture the growth industry. The debate ended up as an unproductive political bargaining between reorganizing JA-Zenchu and restricting non-farmer members’ use of JAs’ services, without getting to the heart of the issue. This is why we strongly hope the Diet deliberations will reflect the public’s views.

The government claims the reason to revise the law is to give farm co-ops a freer hand in conducting business activities to increase farmers’ earnings. Article 7 of the proposed revision stipulates such objectives. The bill is aimed at achieving high profitability in agricultural co-ops’ businesses and facilitating the use of profits in making investments and dividend payments to farmer users. The bill portrays farm co-ops as a co-operative union which operates strictly for farmer members, with their activities focusing on making profits to win market competition. For instance, the bill calls on farm co-ops to become competitive in terms of pricing of farm materials and other services, and states that members should not be forced to use their services. As for deciding the members of farm co-ops’ board of directors, the bill requires that more than half of the directors should in principle be certified farmers and professional sellers of farm products. It also allows farm co-ops to be turned into corporations or life co-op unions focusing on sales of food and other commodities.

We agree that agricultural co-ops should make the best out of their business resources to support farmers’ efforts to increase their income. However, is turning to commercialism and losing the essential features of co-operatives the best way to do so? The bill underestimates the social significance of regional JAs which provide a lifeline for local residents. JA-Zenchu believes its mission is to create co-operatives deeply rooted in local communities with focus on food and agriculture, and we think stating it in the revised law will lead to revitalization of the local economy. This is also included in the counterproposal submitted by the opposition Democratic Party of Japan. The principles and objectives of agricultural co-ops should be clearly stated in the revised law in order to prevent future attempts to restrict non-farmer members’ use of JAs’ services or to separate credit and mutual aid business from farm co-ops.

Adopting a neoliberal approach to the discussion of revising the farm co-ops law without a proper understanding and awareness of co-operatives’ principles and their comprehensive services could have a huge negative impact on economic diversity and tolerance towards financial crisis, as well as on the local community. We strongly hope that lawmakers discuss the bill from the standpoint of responding to the needs of members and the local community and ensuring sound management through business continuity planning, while adhering to the co-operative principles of autonomy, independence and democratic control.

(May 14, 2015)

This entry was posted in Cooperatives, Food & Agriculture and tagged . Bookmark the permalink.