A new reform proposal accepted by an advisory panel to the Japanese prime minister threatens the existence of agricultural co-operatives. The reform proposal, which is condemned by the International Co-operative Alliance, suggests dissolving multi-purpose agricultural co-operatives as well as reducing the role of the Central Union of Agricultural Co-operatives (JA-ZENCHU), an apex organisation of JA-Group, by turning it into a think tank to promote agriculture.
Under the reform proposal member ownership would also be diluted by insisting that more than half of agricultural co-operative board members must be either certified agricultural producers or business managers of private companies (both of whom might be non-members). Currently, in line with global co-operative principles, the law stipulates that two-thirds of board members must be farmer members. The reform proposal also calls for a change in the ownership structure of the agricultural land.
Highlighting the importance of agricultural co-operatives for the country’s economy, Mitsuo Murakami, vice-president of Japan’s Central Union of Agricultural Co-operatives (JA-ZENCHU), said the reform proposals threatened the existence of agricultural co-operatives in Japan.
“This year is designated as International Year of Family Farming but what’s happening in Japan goes against this movement for global promotion of family farming,” he said.
Mr Murakami, who has been involved in agriculture since his youth, thinks agricultural co-ops have become an indispensable tool for supporting not only farmers, but also their communities.
Agricultural co-operatives have a long history in Japan, the first ones being formally set up over 100 years ago. Moreover, currently a half (Yen 4 trillion) of the total agricultural production of Japan is sold through agricultural co-ops of the JA Group, i.e. the Japanese agricultural cooperative group. The property insurance payment by the JA Group for the damage by the Great East Japan earthquake and tsunami was close to 40% of all of such payment.
“In this reform proposal it is advocated that stock companies should be able to own agricultural land and that more and more corporations should be part of managing agricultural businesses,” explained Mr Murakami.
On 2 June all presidents of JA co-operatives held an emergency meeting to discuss the reform proposal.
“We agreed that any reform in an organisation should be a result of an own internal initiative especially in a privately owned organisation.” They also reinforced their commitment to fulfilling their members’ needs. This involves providing various services that members need, including credit, insurance, guidance, marketing and supplying.
“We have decided unanimously that we would continue to fight against these new moves to save our organisation.”
In June Mr Murakami was in Brussels to share these concerns with the board of the International Co-operative Alliance. While there, he also met with representatives of COGECA the European organisation of agricultural co-operatives.
The Board of the International Co-operative Alliance announced that it was establishing a Contact and Study Group to investigate the proposed dismantling of the Japanese agricultural co-operative sector of the economy.
The Contact and Study Group that the Alliance is sending to Japan will review the details of the proposals and evaluate their impact on the co-operative movement in Japan, and in particular on the ownership and participatory rights of its members.
Members of the Contact and Study Group will include Dame Pauline Green, President of the Alliance and former President of Co-operatives UK; Jean-Louis Bancel, President, Crédit Cooperatif (France); and Martin Lowery, International Representative, National Rural Electric Cooperatives of the United States.
Dame Pauline Green, president of the International Co-operative Alliance, said: “The proposal totally disregards the values and principles of co-operatives and the whole global co-operative movement – owned by a billion of the world’s citizens – will stand with their Japanese fellow co-operators in opposition to the dismantling of the Japanese agricultural co-operative movement and the diminution of the members’ rights in this way.”
The Council for Regulatory Reform submitted a final report on overall regulatory reform on 13 June. Although the reference to the "abolishment of JA-Zenchu" mentioned in the initial report has been dropped in the final one, the report recommends that the organisation should be transformed into a new system.
Photo: Mitsuo Murakami
