The Rise of Japan’s Agricultural Cooperatives: A Rural Consortium Model

  Apart from the contingency of historical development, the inevitability of commercial culture cannot be ignored in the formation of the consortium system of the Japanese Agricultural Association. In fact, the trinity of “industry, business and integration” is the universal value of the East Asian economic model.
  In recent years, the research on the Japanese Agricultural Association has gradually attracted domestic attention and attention, but most of them still regard its development process, organization, function and experience as the research focus. In fact, with the formation of a complete system including local organizations and national organizations, the agricultural cooperative organizations in the traditional sense have gradually become “consortia”.
  This “rural consortium” not only provides Japanese farmers with pre-natal, mid-natal, and post-natal services and guidance, but also tries to protect the life, old age, sickness and death of all farmers, and connects all local agricultural cooperatives to form a whole in Japan. A huge consortium structure integrating “production (agricultural production)”, “business (trade supply and marketing)” and “finance (credit insurance)”.   For a long time, Japan’s rural areas have been gradually “consortiumized”, and the Japan Agricultural Association has been broadly defined as a product of East Asian capitalism based on “Japanese characteristics”
Direct intervention and support will gradually develop and grow. It is true that we cannot deny the political attributes of the Japan Agricultural Association, which embodies the will of the country and serves the national strategy, but its more important cultural attributes cannot be ignored either.
  The history of rural agricultural economic organizations in Japan is considered to be traced back to the “combinations of the same industry” that appeared in the late Meiji Restoration, but in fact, “Mother and Son Lai” and “Hotokusha” that appeared as early as the Edo period already had agricultural associations. In terms of organizational form, “Mother Lai and Son” is a rescue organization for mutual financing among ordinary people, while “Bao De She” has a wider range of activities, which is close to the agricultural association in the modern sense.
  During the same period, the “rural loan” business carried out by the founder of the Mitsui Foundation in his hometown of Matsusaka was also the embryonic form of Japan’s rural cooperative financial system. Loans can provide sufficient funds for industrial development in rural Japan. In turn, the development of agricultural and sideline industries such as cotton textiles, tea production, and straw sandals further expands the potential customers of the loan business. In fact, this is a successful practice of businessmen in the “integration of industry and finance”, thus forming the initial form of the trinity of “industry, business and finance”.
  In 1900, Japan officially promulgated the first law on cooperatives in history – the “Industrial Combination Law” to support and encourage cooperative organizations. In July 1947, Japan formulated a special law for the establishment of agricultural cooperatives – the “Agricultural Cooperative Association Law”, which established agricultural cooperatives nationwide, making Japanese agricultural cooperatives embark on the track of legal development. In 1950, more than 99% of farmers in Japan joined the Agricultural Cooperative Organization.
  In 1961, Japan enacted the “Basic Law of Agriculture” and “Agricultural Cooperative Association Merger Assistance Law”, which once again strengthened the leading position of agricultural cooperatives in agriculture. In the early 1970s, with the profound changes in the internal and external conditions of agriculture, the development of the Japan Agricultural Association showed new trends: accelerated mergers and large-scale expansion; corporate management; business integration. In fact, Japan during this period has already seen the beginning of consortia.
  After entering the 1990s, in the face of the changing market environment, Japan launched the “neo-liberal” reform of the Agricultural Cooperative, which gradually weakened the local social autonomy function of the Agricultural Cooperative, no longer has the power of administrative orders, and moved towards a pure market economy. Organizational transformation. Although for a period of time, the Japan Agricultural Association played an important role as the implementer of the government’s grain management policy, it should be clear that the Agricultural Association is actually a relatively commercial organization.
  The formation of the Japanese Agricultural Association, a rural consortium, was not accomplished overnight, nor was it designed. In addition to the contingency of historical development, the inevitability of commercial culture cannot be ignored in the formation of the consortium system. In fact, the trinity of “industry, business and integration” is the universal value of the East Asian economic model.
  The Golden Key of Rural Revitalization in Japan
  As we all know, it is impossible for farmers to obtain average social income in the field of pure agricultural production. Therefore, talking about agriculture in terms of agriculture and business in terms of business will never solve the problem. Only by integrating the two, providing corresponding financial support, and organizing farmers into various agriculture-related fields through the “Trinity” can truly generate comprehensive benefits and realize the stable development of agricultural and rural farmers.
  The first is the industrialization of agriculture. The Japan Agricultural Association is clearly aware that the development of agriculture must be driven by the industrialization of agriculture, and agriculture must be managed as an industry. In the Japanese industrialized agricultural model, the Agricultural Association actually plays the role of an agricultural service provider, receiving agricultural products produced by farmers at the grassroots level, processing them, adding value, and then returning the profits earned to farmers.
  In fact, this standardized and specialized agricultural industry chain is the basic element for the formation of the Japanese rural consortium model. In the trinity consortium system of “industry, business and integration”, the industry is the basic framework and the node to build the network. However, industrial networks cannot be naturally formed between individual industrial nodes and industrial chains, which requires the intervention of commercial forces, which act as glue and bonds.
  The second is the commercialization of agriculture. In the early 1960s, Japan Agricultural Association established Combination Trading Co., Ltd., which is a unique international trading company that exports products produced by Japanese farmers and imports the raw materials and production materials needed. ) of a general trading company. Japan JA Zennong, established in 2006, actually merged the functions of the combined trade trading company and assumed the role of an agricultural general trading company.
  Finally, there is the financialization of agriculture. The Japan Agricultural Association has its own production and processing, warehousing and logistics, sales and trade systems and related equipment and facilities, covering almost the entire rural areas of Japan. To operate and maintain such a huge system requires the support of financial strength. In fact, the Agricultural Cooperative of Japan began to build a financial system at the beginning of its establishment. This division specializing in financial services is the Norinchukin Bank.
  The Agricultural and Forestry Central Bank is also known as the “Nongkyo Bank”. In the trinity consortium system of the “Industrial Business Finance” of the Japanese Agricultural Cooperative, it actually undertakes the function of the main bank of the consortium. A channel for other financial institutions to raise funds. At the same time, through the Central Bank of Agriculture and Forestry, the Japan Agricultural Association is also engaged in credit business (rural credit cooperatives) and mutual aid business (farmer insurance).
  If the rural central enterprise consortium with socialist characteristics
  is calculated according to the number of people served by the Japan Agricultural Association, the Japan Agricultural Association can be called the largest enterprise group, the largest banking group, the largest insurance group, and the largest medical care group in Japan. The group and the largest supply and marketing group cover almost all aspects of Japanese farmers’ production and life. Therefore, the Japan Agricultural Association is not only a cooperative organization, but also a super company that monopolizes the rural market, and it is also the “second government” of rural Japan.
  It is called a cooperative organization because the Japan Agricultural Association can “coordinate agricultural production and allocate living resources”; it is defined as a monopoly company because the Japan Agricultural Association “controls agricultural products and determines market trends”; and “guides rural construction, “Providing guaranteed medical care” is the attribute of its “second government”.
  In fact, the essence of interpreting the Japan Agricultural Association is to interpret the cultural value of the trinity of “industry, business and finance” of the Japanese consortium.
  For the Japanese Agricultural Association, a trinity rural consortium system of “industry, business and finance”, the monopoly attribute seems to be an unavoidable topic. In this regard, Wen Tiejun, a well-known expert on Sannong issues, believes that it (the monopoly attribute) is not for the interests of a few capital owners, but to protect the interests of all farmers and ensure that all farmers share the services provided by the Agricultural Association fairly and equitably.
  In the process of national industrial development, the Japanese conglomerate has achieved a certain sense of monopoly through its trinity layout of “industry, business and integration”, and has led the redistribution of resources to a certain extent. However, the redistribution formed by this monopoly is not for the interests of a few people, but for the interests of more small and medium-sized enterprises. Similarly, the monopoly redistribution of the Japanese Agricultural Association is to take care of the disadvantaged small and medium-sized farmers. Therefore, the Japanese consortium system cannot be simply understood as a capitalist monopoly economic model.
  The Japanese Agricultural Association is essentially a manifestation of collective ownership, that is, a form of socialist public ownership in which the means of production and the fruits of labor are collectively owned by some working people. In the direction of agriculture and rural areas, it is manifested in the effective integration of agricultural cooperative economic organizations (Japan Agricultural Association) and other related fields of production (production), supply and marketing (business), and credit (financing).

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