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Agricultural Cooperative Reform in Japan: An Update
May of last year, Japan’s Council for Regulatory Reform issued a set of proposals for the reform of the country’s agricultural sector; some of those proposals concerned Japan’s Agricultural Co-operatives Act and would, if enacted, result in unprecedented change for agricultural cooperatives and their union system. Early this past April, at its Cabinet meeting, the Japanese government approved a bill to revise the Agricultural Co-operatives Act in keeping with the aforementioned reform proposals. This bill has been submitted to the main legislative body, the Diet. The bill will be enacted in April 2016, as long as the timing of its enactment stated in the bill is not changed.
In its current form, the bill calls for the overhaul of the organization of agricultural cooperatives in Japan. The bill would abolish the current union system. The Central Union of Agricultural Co-operatives (JA-Zenchu) would become a general, incorporated entity that would have the functions of representation of and coordination within the JA Group. JA Zenchu’s auditing section would be spun off into a new auditing body, which would act as an independent organization operating under the Certified Public Accountant Act. Primary cooperatives would decide whether to be audited by the new body or other auditing companies.
Rules that would regulate the amount of use of JA businesses by associate (non-farmer) members of JAs, which the government tried to include in the bill and the JA Group strongly opposed, were finally removed from the bill. However, the handling of such rules would be decided after a five-year survey on the use of JA businesses by regular and associate members and the progress of JA reforms made over the five-year period.
The bill would also enable the conversion of the National Federation of Agricultural Co-operatives (Zen-Noh) and prefecture-level Economic Federations of Agricultural Co-operatives into stock companies; agricultural cooperatives would then become their stakeholders.
While amendments to the bill may be made during the deliberation process, the reform of Japan’s agricultural cooperatives is a certainty. In recognition of this as well as of the need to revitalize Japanese agriculture and local communities through its active membership, JA-Zenchu and its members are seeking to ensure that the reform of Japan’s agricultural cooperative system is internal in its origin; that is, it is a self-reform, not driven by the government. After examining the potential future roles of agricultural cooperatives in the improvement of farmers’ incomes and local revitalization, they will then draft a set of proposals regarding both organizational and operational reform, which will be tabled at the 27th national meeting of agricultural cooperatives in Japan, to take place in October this year. That assembly is expected to adopt a resolution concerning the proposed self-reform, and JA-Zenchu and its members will implement the measures called for by that resolution.
For more details regarding the reform both of Japan’s agricultural cooperatives and its agricultural sector, please find the attatched file to download a report made by JA-Zenchu’s Senior Executive Director, Mr. Hajime YAGUCHI at ICAO EXCOM meeting held in Seoul on 12 May, 2015.
Agricultural Cooperative Reform in Japan.docx