【Editorial】 Doubts remain over revised agricultural co-ops law (Aug. 29, 2015)


The revised Agricultural Co-operative Society Law was passed in the Diet, marking a major shift in the structure of farm co-ops. Prime Minister Shinzo Abe’s administration regarded the bill as an important step to turn agriculture into a growth industry. We have pointed out numerous doubts and concerns over the objectives, contents and the impact of the revision, but they were never solved in the Diet deliberations. Farmer members of agricultural co-ops, or JAs, have not fully understood nor are fully convinced of how the law would be revised. We urge the government to continue revising the law so that it truly supports the JA group’s self-reform efforts and contributes to increasing farmers’ income and improving local residents’ lives, as well as helping deepen people’s understanding of the industry.

As part of the government’s growth strategy, Abe has pushed to drastically reform the farm sector and agricultural co-ops, which he sees as “bedrock regulations”. By revising a package of laws related to farm co-ops, municipal agricultural committees and farmlands, the government is aiming at making agriculture a growth industry through adding value to farm products, promoting exports and consolidating farmlands. What lies beneath the whole reform efforts is a competition-based thinking of corporatizing co-operatives and facilitating private enterprises’ entry into the farm sector.

Particularly, the revised farm co-ops law is clearly intended to boost free competition in a market economy. The Central Union of Agricultural Co-operatives (JA-Zenchu) — the leading force of the JA group – will be turned into a general incorporated association instead of an organization designated under the law. The National Federation of Agricultural Co-operative Associations (JA Zen-Noh), engaging in sales of farm products, will be incorporatized. Rules for assigning primary JAs’ board of directors, which constitutes the foundation of co-operatives’ autonomy, will also be changed. The law states that more than half of the directors in principle should be designated farmers and professionals of farm product sales, leaving room for future controversy.

The biggest focus of debate in the Diet deliberations was the scope of farm co-ops’ business. The government added a provision in the bill to clarify that agricultural co-ops should “give maximum consideration to increasing agricultural income,” apparently to make them function more as a craft union for farmers. We believe the government made the move pressured by groups like the Regulatory Reform Council and the American Chamber of Commerce in Japan which strongly demanded that non-farmer members’ use of JAs’ services be restricted. It was only natural for experts and JA officials who were invited to give opinions at the Diet and regional public hearings to express doubts and worries.

“By revising the law to let agricultural co-ops fulfill their primary role, I hope highly motivated farmers can succeed,” Abe said at an Upper House agricultural committee meeting on Thursday, Aug. 27. What is the primary role of farm co-ops? It is nothing but strengthening their own management foundation through engaging in a variety of businesses, so that they can support farmers’ operations and lives, as well as providing high quality services to local residents. We have to say that the revised law fails to acknowledge the basic principles, missions and historical roles of farm co-ops.

In response to such concerns, the Upper House adopted an additional resolution regarding non-farmer members’ use of JAs’ services. It was more specific than the one adopted by the Lower House, stating that farm co-ops act as an important infrastructure in regional communities and the government should take into account intentions of people concerned when making any changes. This resolution should be strictly reflected in implementing the law.

The JA group is currently working on an action plan to expand farmers’ income and revitalize regional areas under the slogan of conducting creative reform from the standpoint of farmers. This can be the last chance for the group to tackle self-reform, which is a matter of life and death. It is necessary for them to analyze the effects of the revision, ask for further changes based on farmers’ needs and strive to carry out reform. Especially, JAs’ top management must show strong leadership to cope with changes while adhering to the co-operative principles.

(Aug. 29, 2015)

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