The Ministry of Agriculture and Forestry, the Allied Forces General Headquarters (GHQ), and agriculture organizations began propaganda activities to spread nogyokyodokumiai (agricultural cooperatives), along with the establishment of the Nogyokyodokumiai (agricultural cooperatives) Law. On August 1, 1947, the press release about the law was done. Thereafter, radio, newspaper, and distribution of brochures were used at the time. Regarding propaganda activities, exceptional enthusiasm and efforts were poured.
The ministry printed 5.7 million copies of the brochure “nogyokyodokumiai no iroha (ABCs of nogyokyodokumiai (agricultural cooperatives)),” and distributed them to all farmers through the local offices of the prefectures. Nogyokyodokumiai (agricultural cooperatives) department of the Ministry of Agriculture and Forestry ensured papers despite of bad situation of transportation due to lack of material. GHQ walked to check the distribution situation in the field because of eagerness.
The brochure “Nogyokyodokumiai no iroha (ABCs of nogyokyodokumiai (agricultural cooperatives)),” said thus,
“Every farmer! All of nogyokai (agricultural institution) and jikkokumiai (farming union) are to be dissolved, until August 14 of next year. Well, why nogyokai (agricultural institution) and jikkokai (farming union) must be dissolved? Because they were created as a tool to control the rural economy and organizations activities.” Owing to newly enacted Nogyokyodokumiai (agricultural cooperatives) Law, “You can establish cooperatives which can be managed freely without interference from anyone.”
In addition, the brochure posted the 11 items of explanations on new nogyokyodokumiai (agricultural cooperatives), such as 1) contents of business, 2) way of business, 3) how to create cooperatives.
These activities resulted in fruit. Nogyokyodokumiai (agricultural cooperatives) have been established in momentum far more than expected. The number of comprehensive nogyokyodokumiai (agricultural cooperatives) performing the credit business was 17,097. 89% of them, 15,154 cooperatives, had been established until February 1948. 90% of nogyokyodokumiai (agricultural cooperatives) were established in less than a year.
On the other hand, GHQ did not loosen the hand to dismantle nogyokai (agricultural institution) while issuing the indication one after another as follows;
1) to prepare the General Assembly for dissolution, within 2 months after establishment of nogyokyodokumiai (agricultural cooperatives) law, 2) to explain the purpose of the establishment of nogyokyodokumiai (agricultural cooperatives) and dissolution of nogyokai (agricultural institution), 3) to stop business of nogyokai (agricultural institution), 4) to specify the Norinchukin Bank as liquidators. GHQ severely asked the dissolution of nogyokai, but Ministry of Agriculture and Forestry made it clear that also nogyokyodokumiai (agricultural cooperatives) should succeed the property of nogyokai (agricultural institution) such as “deposits, loans, staff, and other property.” However, because establishment of nogyokyodokumiai (agricultural cooperatives) and dissolution of nogyokai (agricultural institution) progressed in parallel, it led criticism, “It’s just like repainted nogyokai (agricultural institution).”
Takaaki Odawara, professor of Hokkaido University, pointed, “It was historical destiny of nogyokyodokumiai (agricultural cooperatives) which had to begin its business by succeeding the business of governance body, nogyokai (agricultural institution).”
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New nogyokyodokumiai (agricultural cooperatives), which started in full of expectations, but faced the ordeal while being unable to determine its direction course. After the war, the Japanese economy had been promoting a revival by lending government funds. This policy has caused the inflation.
In order to converge the inflation, in February 1949, the United States government dispatched Dodge, president of Detroit bank, as an advisor of GHQ. Dodge said,” Japanese economy is “takeuma (stilts) economy “. It is standing owing to the aid of the United States and government subsidies, so that its foot has not arrived on the ground. In the case of too high stilts feet, it falls and folds the neck.” He required super balanced budget (Dodge plan) without the deficit. In September, Shoup, finance scholar, also visited Japan. He recommended the implementation of tax system centered on the income tax and strengthening of tax collection.
Such deflation policy has led to turned recession. It gave a blow to the agricultural cooperative whose management foundation has not been completed. The price of agricultural products was decline. In the elimination of controls, commission income also declined. Farmers economy slipped to a significant deficit from surplus, and drawer of deposits has increased dramatically. In 1948, there were only 1,027 nogyokyodokumiai (agricultural cooperatives) (13.8% of total) which incurred a deficit at the closing of fiscal year. But in 1949, 4,606 cooperatives (41.6% of total) incurred a deficit.
The cause of the agricultural cooperative slump was not only due to economic environment. After the legislation of nogyokyodokumiai (agricultural cooperatives), due to really rapid establishment of nogyokyodokumiai (agricultural cooperatives), there has been a lack of understanding of the cooperative philosophy of executives and employees. Lack of management skills such as lax management was also exposed.
Reference = Agricultural Policy Division of Ministry of Agriculture and Forestry “Nogyokaishi (Agricultural Institution history)” Ministry of Agriculture and Forestry, Motochika Mitsukawa “post-war agriculture organization development history” Meibun Shobo, “Agricultural cooperative system history, the first volume, the second volume,” JC Research Institute, Tetsuo Takeuchi and Takaaki Odawara “tomorrow’s nogyokyodokumiai (agricultural cooperatives)” rural culture Association, Masaaki Ishida “History of JA and our role” Ienohikarikyokai