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Realignment of agricultural cooperatives is expected to lift farmers’ earning power

  • 2015-11-19 15:00:00
  • , Nikkei
  • Translation

(Nikkei: November 19, 2015 – p. 2)

 

 Moves to streamline agricultural cooperatives within prefectures are spreading across the country. Local cooperatives are being pressed to step up their competiveness and management through a drastic shakeup, as the government is accelerating a push to overhaul the co-op structure.

 

 JA Group Kochi is planning to consolidate 15 cooperatives, which individually market farm produce and conduct financial services, into one by January 2019. When the change is implemented, the sale of farm products will be overseen by one unit, which is expected to improve management efficiency. The Kochi Prefectural Union of Agricultural Cooperatives expects the consolidation to step up its support base for member farmers and deal better with the government’s initiative to reform agricultural cooperatives nationwide.

 

 The Hiroshima Prefectural Union of Agricultural Cooperatives is also looking into the possibility of streamlining 13 entities into one to standardize their production and sales knowhow of farm products. The consolidation of production is expected to increase transaction volumes and help local farmers better compete against domestic and overseas rivals.

 

 JA Group Miyagi is considering merging 14 cooperatives into three by around 2019. It envisages improving the skills of agricultural instructors, who belong to each cooperative, through training so they can give advice on a range of prefecture-grown products. A project is also underway in Fukushima to consolidate local cooperatives into four by March 2016.

 

 JA Group Saitama will streamline 21 agricultural cooperatives into 16 next April, with an eye on strengthening sales at shops under its direct ownership. It also considers reviewing distribution functions.

 

 Local cooperatives have been overseen by Japan’s Central Union of Agricultural Co-operatives, known as JA-Zenchu. But they are being pressed to step up their competiveness, as the government is working to drastically curtail JA-Zenchu’s authority. Local farmers are also facing the challenge of shrinking demand caused by depopulation in their regions. Japan’s participation in the Trans-Pacific Partnership trade mechanism is also changing the business environments around them.

 

 Agricultural cooperatives handle a range of operations, such as overseeing the marketing of farm produce, giving advice to farmers, procuring agricultural supplies, and offering financial services. The realignment is expected to boost transactions of farm products, which will give cooperatives more say when they negotiate with distributors. They will be also able to provide training to agriculture specialists, which will eventually help famers improve their earning power. (Abridged)

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