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ITOIGAWA, Niigata Pref. (Kyodo) Having watched many farmers grow too old to grow rice in this mountainous part of Niigata Prefecture, Naoji Hara has taken it upon himself to find a sustainable future for local agriculture.

In 1992, he teamed up with nearby rice farmers and established a five-member cooperative to share out the cost of buying farm equipment, which can cost millions of yen. Three years later, they incorporated the co-op to make it easier to get bank loans and to rationalize management.

“We just wanted to change the situation so farmers could make ends meet by themselves,” said Hara, 51, who heads the agricultural corporation, Higashiyama Farm, located in Itoigawa on the Sea of Japan coast.

With its members hoping to become major players in the local rice-growing community, the farm has gradually expanded from 10 hectares in 1995 to 26. As of December, it held 60 percent of the total farmland in the region, including paddies borrowed from elderly rice farmers and cultivated on their behalf.

The five members of Higashiyama Farm are mostly in their 50s. Two men in their 20s are employees.

This year, their efforts to boost productivity were officially recognized. Higashiyama Farm received an award from the farm minister in January in a contest sponsored by the government aimed at finding promising farmers from across the country to serve as models for agricultural communities.

“I believe we were awarded partly because we managed to hire young employees,” Hara said. “To attract youth who are not from farm families, we should demonstrate that we can pay a decent salary for their work.”

The son of rice farmers himself, Hara studied agricultural bookkeeping in high school and inherited a farm from his parents. He is in charge of accounting at Higashiyama Farm, which has been in the black for the past four years.

Thanks to the expansion, the corporation now produces about 110,000 kg of rice per year. Recently the members diversified into horticulture, growing vegetables, flowers and fruit in greenhouses.

In addition to selling rice through the local agricultural co-op and rice stores, Higashiyama Farm also directly markets its crops, delivering to about 130 households. The service is Higashiyama’s most profitable way of selling, Hara said.

“Rice prices have been steadily falling amid declining consumption in Japan. The prices may drop further, depending on developments at the World Trade Organization talks,” Hara said, referring to pressure Japan is likely to face to open its rice market wider to foreign producers in the current round of global trade negotiations.

“The point is how much we can secure while the pie gets smaller.”

Hara said Higashiyama Farm hopes to increase its land under cultivation to 50 hectares and to further diversify its business so that members and employees do not have to take other jobs during the winter.

Half the rice farmers in Itoigawa are in their 70s, Hara said. He believes most of them will give up farming in five years or so if they cannot find successors. This gives Higashiyama Farm an opportunity to expand.

“Even if those old producers are reluctant, they will have no option but to leave the rice farming to us. We want the local community to support efforts by motivated farmers like ourselves,” he said.

Higashiyama Farm’s ambitions mesh with the government’s agricultural reforms aimed at fostering more competitive farmers who cultivate larger fields.

Starting next year, the government will halt production subsidies to farmers, introducing a direct payment system based on the size of farmers’ land and production data. These measures are aimed at cutting the number of small farmers who rely on side jobs for most of their income.

“Many elderly farmers refuse to give up loss-making businesses, saying they have ancestral obligations or cherish family reunions for field work at harvest time. They often make up for deficits with their pension money and savings,” said Masashi Tamura of the Central Union of Agricultural Cooperatives (JA-Zenchu).

“But we want them to stop that practice,” he said. JA-Zenchu, the umbrella organization of the country’s largest network of agricultural cooperatives, is backing the government’s reform drive.

In 2004, there were 3.62 million farmers in Japan, of which 57 percent were aged 65 or older, according to government statistics.

But according to Kazuhito Yamashita, senior fellow at the Research Institute of Economy, Trade and Industry, a government-affiliated think tank, the reforms are “cosmetic” because they do not change the mechanism of protection: keeping consumer prices high to support farmers.

Until prices come down, Japanese farm products will never be able to compete with cheap imports and will continue to rely on high tariffs, Yamashita said. He urges the government to make more radical reforms by sharply slashing prices so that small-scale farmers will get out of the business, leaving larger farms to raise efficiency through cost cuts.

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