The government’s Regulatory Reform Promotion Council has recently presented a draft proposal on reforming management of agricultural cooperatives. The key points include abolishing the consignment sales system of the National Federation of Agricultural Cooperative Associations (ZEN-NOH) and making the organization shift within a year to the system of purchasing all the products, as well as turning primary farm coops (JAs) into agents, instead of providers, of financial services. These are extremely unreasonable proposals that totally ignore the functions and roles of ZEN-NOH’s sales business and JAs’ financial business. Such denial of cooperative businesses and intervention in management of an independent private organization should not be allowed for whatever reason.
The origin of cooperatives is autonomy and independence, and agricultural coops reform should be conducted as self-reform based on consent of their farmer members. However, the council’s proposals on ZEN-NOH go into details, such as recommending that ZEN-NOH shift to a new organization within a year by transferring to manufacturers its business of selling agricultural production materials, and abolish the consignment sales system and introduce within a year the system of purchasing all the products.
Needless to say, ZEN-NOH’s role is to improve farmer members’ income and secure stable food supply for the Japanese people through uniting economically disadvantaged individual farmers and strengthening bargaining power as a whole. Pulling out from sales of agricultural materials means withdrawal from the sales business which has been built up over the years, and it could threaten the organization’s management.
The Liberal Democratic Party’s project team on the agriculture industry has been discussing ways to reduce costs of agricultural production, and ZEN-NOH has been making efforts to review its business in line with the ongoing debate. The council’s proposals clearly overstep such efforts and are totally unacceptable.
Regarding sales of farm produce, ZEN-NOH is already working on shifting to demand-based production and sales as part of its self-reform. As for rice, the list of reform measures released by the agricultural coops group this fall includes increasing pre-harvest deals. There are also cases in which ZEN-NOH works as a link between rice processing firms and rice producers to cultivate varieties that match their needs. Is there any good reason why ZEN-NOH should be pressured to change their business?
Regarding transferring JAs’ financial business and making them agents, there have been concerns in the discussions on agricultural cooperatives reform conducted two years before that it could lead to decline in the quality of service. Some also said it could squeeze JAs’ profits, which means there would be less financial resources to be used to boost farming regions and ambitious farmers. Taking into account such discussions, agricultural coops reform plan was put together based on the LDP’s draft proposal released in June 2014 and was included in the revised Agricultural Cooperative Association Law. The remaining issues were to be dealt with in the coming five years. There should be nothing that goes beyond this framework.
ZEN-NOH is a private organization under the agricultural coops group which is operated autonomously and independently. The government must not intervene in its management. The agricultural coops group is now on the path to work on creative self-reform for the development of agriculture and expansion of agricultural income. It should be made clear that the consent of farmers, who are members of the organization, is vital to make the final decision on where they will head to.