Third in a series SENDAI (Kyodo) Wearing a yellow shirt and checkered slacks, Shoji Shida looks more like a trading company employee than someone who works for an agricultural cooperative office.
As business manager of Japan Agricultural Cooperatives’ (JA) office in the town of Yamoto, Miyagi Prefecture, Shida spends his days before a personal computer, searching for new business opportunities.
“The (Japanese) agricultural industry has entered a marketing era,” Shida, 45, said. “We are not an industry of mass marketing but rather a one-on-one business. We can get a lot of interesting business depending on how we arrange it.”
Yamoto is one of the prefecture’s foremost vegetable growing regions, but like other farm areas in the country, it is still feeling the impact made by imports of low-priced Chinese farm produce.
Shida does not harbor hard feelings, however, because he knows a new type of business is steadily developing.
His JA Yamoto office succeeded last year in establishing a business tieup with supermarket chain Yok Benimaru, affiliated with Ito-Yokado Co., one of Japan’s largest supermarket chains. The deal made it possible for the JA office to set up exclusive fresh vegetable stands in Yok Benimaru stores in Sendai and other places.
Yok Benimaru, noted for its vegetables rich in minerals, was aware of Yamoto’s high-quality produce and decided to do business with the town’s JA office. However, it is rare in the industry for a specified distribution enterprise to set up transactions through a JA office. Under the arrangement, vegetables harvested in the morning are placed on sale in Yok Benimaru stores that afternoon. Normally, produce gathered in the morning does not reach store shelves until the following day.
Although Yamoto’s vegetables are priced 20 percent to 30 percent higher than others, they usually sell out because they are fresh and unprocessed.
The bumps on Yamato’s cucumbers remain and stone leeks are left unwashed, catering to consumers who want natural foods to stay that way.
“We have no chance of winning a price war with imported farm products,” Shida said. “Our aim is to engage in price competition (with domestic produce).”
To that end, Shida is searching for a new distribution system, particularly to help farmers expand outside established markets. The business tieup with Yok Benimaru is an example of such a system and the manifestation of his office’s attempts to review its operational methods.
“The closer the producers are to the consumers, the better it is” for JA Yamoto to do business, Shida said. “This is an era when JA (employees) must go out and find customers instead of relying on markets and wholesalers. The significance of agricultural cooperatives’ existence is being called into question.”
Shida, convinced there will be a growing tendency in the farm industry to do away with middlemen, has set his sights on increasing the nonmarket distribution volume to 30 percent of his office’s total business.
In the fall, JA Yamoto will enter into a partnership with a fruit and vegetable market in the city of Akita, allowing a truck to transport vegetables gathered in the morning in time for afternoon bidding.
“We wish to work with those who appreciate our produce as equal partners,” Shida said.
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