A year has passed since the farmland consolidation bank system was established, but it has not achieved good results so far, prompting a need for revision. The government is said to be considering taking measures to encourage municipalities to facilitate the use of the banks, such as by creating differences in the budget allocated for each prefecture according to the amount of land leased by the banks. The revision is expected to be included in the government’s revised growth strategy, but the government should not rush to conclusions. We urge the government to discuss the issue carefully and make effective revisions by listening to the voices of farmers.
It is said that the main reason why the banks’ business has been sluggish was because farmland owners were slow to provide farmlands to the banks. However, the government does not seem to have verified the reason behind their reluctance.
The government has set a goal of raising the ratio of farmlands operated by large-scale, ambitious farmers from the current 50 percent to 80 percent in ten years, and considers the consolidation banks a promising approach to achieve the goal. Farmland consolidation will not only become the foundation for fostering large-scale farmers, but also affect other government policies such as the goal to reduce production costs of such farmers by 40 percent in the coming decade. The prospects of agricultural policy reform conducted by Prime Minister Shinzo Abe’s administration, focusing on making the farm sector the growth industry, depends largely on the success of farmland consolidation banks.
The banks, established in each prefecture, borrow small plots of farmland, consolidate them and lease them to large-scale farmers. The agriculture ministry stresses that farmland owners will be more willing to lend their land to reliable public institutions. The ministry says the banks, which will also redistrict pieces of farmland to form large plots, are the “last resort” for farmland consolidation.
However, in fiscal 2014, the banks managed to lease only 31,000 hectares of land, roughly 20 percent of an annual target of 140,000 hectares. Although it can be said that people were not yet familiar enough with the system in its first year, it is necessary to figure out why the system did not work out as expected. It would be misleading for the government if it takes the stance of blaming farmland owners.
In the discussions among the ruling bloc, some lawmakers pointed out that landowners are worried because they don’t know to whom their land will be leased. The issue also came up during the deliberations on the bill to create the system. In November 2013, a head of an agriculture corporation which currently operates as a farmland consolidation bank told the Lower House committee on agriculture, forestry and fisheries: “If you use common sense, you can’t ask someone to offer (farmland) and say you are not sure who would use it.” He warned that it would not be right to think the banks have the power to collect farmlands only because they are public institutions. Shigenori Fujioka, chairman of the national association of agricultural corporations, also stressed the importance of building trust in a relationship with landowners, saying that the corporations have increased the area of farmlands they deal with little by little through careful explanation and trust-building.
In order to improve the effectiveness of the system, it is indispensable for the banks to have a thorough discussion with the local community. It is also important to think how to obtain cooperation from local agricultural co-ops and municipal agricultural committees. However, local consensus building was made light of during the process of compiling the bill due to pressure from the Regulatory Reform Council. We urge the government to verify how it adversely affected the system as a whole.
(May 22, 2015)