【Research】The Situation surrounding Japan’s wholesale markets of farm products focusing an issue of their public nature

June 22nd, 2018
Norinchukin Research Institute Co., Ltd.
ICHINOSE Yuichiro, Senior Economist

■Abstract

Wholesale markets in Japan have a history of nearly 100 years since the Central
Wholesale Market Act was enacted in 1923. During this period, amendments of the Act
were made several times, including a change to the Wholesale Market Act in 1971, to make
the Act adjust to the existing state of the wholesale markets. These are considered as
amendments of the existing state-ratification type, aiming at introducing flexibility into
regulations on transaction methods and others.

Contents of the latest amendment of the Wholesale Market Act, which was made in 2018,
are mostly based on the “Recommendations for Promoting Distribution Structural Reforms
including Wholesale Markets” submitted by the Council for Promotion of Regulatory
Reform that was organized in the cabinet office of the Abe’s administration in 2016. The
amendment, namely, aimed at the direction to continuously minimize involvement of the
national and local governments in the wholesale markets. There are various arguments on
the latest amendment of the Act. Some experts have a positive opinion that the
amendment will increase options of places for shipment and purchasing by promoting
diversification of the wholesale markets. Other experts, on the other hand, have a negative
one that a public function played by the wholesale markets in securing stable supplies of
foods will be undermined.

In contrast to Japan taking the policy direction to minimize the involvement of national
and local governments, governments of major countries of the European Union (EU) have
considered wholesale markets as public goods and been playing a leading role in being
involved with management and maintenance of those goods. The national and local
governments in Japan will be also possibly required to be deeply involved in the wholesale
markets for the purpose of maintaining a public function of providing the people with
stable supplies of food products during years to come.

■Introduction

The Wholesale Market Act was amended at the 196th Ordinary Session of the Diet in
2018. The latest amendment minimizes the involvement of national and local governments
in wholesale markets. On the other hand, it will possibly promote diversification of these
markets, which have been managed so far in almost uniformed manners throughout the
country, by considerably expanding the degree of discretion of wholesale market…Link reading

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