The Japan Agricultural Co-operatives (JA) system has played a great role to sustain people’s living in the rural communities which suffer from declining and aging of the population. The group has extraordinarily close relationships with farming communities. And therefore it has defects to be improved. Reforms are necessary to favor farming households and develop rural communities, but not to dismantle the cooperative system.


REFORM BREAKS UP RELATIONSHIPS WITH RURAL COMMUNITIES


Prime Minister Abe Shinzo and the Council of Regulatory Reform explain about removal of the right to audit group cooperatives of the Zenchu, or the Central Union of Agricultural Cooperatives: ‘local co-operatives will be able to free to behave independently and be empowered by eliminating the auditing authority of the Zenchu’. The government is planned to introduce auditing corporations. That means to expose the cooperatives to a market principle.


There are several questions. (1) How will the reform work to increase the income of farmers? (2) The Zenchu has other functions, except for auditing, like management guidance and organizational authority to favor farmers. It provides advice on farming. (3) Auditors of the Zenchu have the legal certificate of public accountant and the government says the authority will be entrusted to certified public accountants of business entities. The government does not explain clearly about the change.


Reforms will not Enhance Rural Economies


If the Zen-noh, or the National Federation of Agricultural Cooperative Associations, is reorganized to be a corporation and is covered by the Anti-Monopoly Law, the taxation scheme to benefit farmers will be removed. Consequently, farmers will not earn more profits. The government is intended to bring in business into the agricultural sector. The planned limit for associate members to use cooperatives will hamper them, not improve living conditions of farmers.


The Council insists on withdrawal of the cooperatives from multiple functions, saying that ‘the cooperatives should work exclusively on farm products from one item to another and should withdraw from the comprehensive operations’.


The council does not understand relationships between cooperatives and local communities. It claims that cooperatives should deal solely with farm products, chemicals and fertilizers and should retreat from operations of consumer goods sales and banking.


Population declines and grays in the rural areas in Japan. Big banks have gone. Postal offices have been closed down. It is cooperatives that support farmers and residents in the local communities. The cooperatives involve in management of local A-Coops and sales stations. They run gas stations and sell gas, engage in banking and insurance business, undertake funeral ceremonies, organize volunteer fire-fighters, have hospitals and travel agencies, provide catering service to schools and plan culture and entertainment programs. Cooperatives support communities.


Without cooperatives, people cannot lead a life. That is not exaggeration. Many people doubt and criticize the policy of Abe government, saying that the reform will adversely affect on developing local economies.


In short, the policy is to dismantle the agricultural cooperatives, which is contrary to reforming cooperatives. Judging from the abrupt cancellation of auditing authority and a fact that the decisions made by the Council of Regulatory Reform are identical to those of the US Chamber of Commerce in Japan, the government is keen to negotiation of TPP (=Trans-Pacific Partnership) free trade agreement. It wants to exclude influence of the cooperatives and the Zenchu, stern opponents of the TPP scheme.


What is Real Reform?


Definitely, reform is necessary.


But reforms should be made, taking in account of;


(1) maintaining multiple functions of cooperatives,
(2) guaranteeing the right of speech of associate members,
(3) establishing a system to elect presidents of local cooperatives by ballots of members and set up a retirement scheme of presidents,
(4) abolishing the system to support single political party, namely the Liberal Democratic Party, and declaring neutrality of parties,
(5) providing farmers and cooperative staff with opportunities to learn policies of the government on foodstuff, agriculture and farming communities,
(6) recognizing labor unions and enhancing union movements to drastically democratize the agricultural cooperatives.




February 17, 2015