The Abe administration's move to strip the Central Union of Agricultural Cooperatives, better known as JA-Zenchu, of its legal mandate to audit and guide regional cooperatives across the country is billed as the first major overhaul of the nation's agricultural cooperative system in 60 years. But it remains unclear if weakening the power of the organization, which has for long wielded strong political influence backed by farm votes, will in fact achieve the administration's goal of making Japanese farmers more competitive and boosting their income.
Prime Minister Shinzo Abe's bid to turn the nation's heavily protected agriculture sector into a growth industry has focused on reforming the farm cooperative structure. The government has said regional cooperatives and individual farmers will get more room to improve their management and flexibly adapt their operations to changing and diverse local needs once they're freed up from the uniform control of JA-Zenchu. At best, the JA-Zenchu reform will only be the first step toward reform of the nation's farm sector, which faces mounting challenges ranging from the aging of farmers and difficulty in finding successors for them to the large numbers of inefficient small-scale farms and the anticipated influx of more agricultural imports through free trade arrangements.
With the government's draft plan endorsed by the ruling coalition and accepted by JA-Zenchu, the administration plans to submit relevant bills to the Diet by the end of March. JA-Zenchu, established in 1954, will lose its legal mandate to lead the JA group's management, and become a general incorporated association, not a special entity specified by the Agricultural Cooperatives Law, by the end of fiscal 2018. Its function to audit the roughly 700 regional agricultural cooperatives will be spun off into a new auditing body, and it will be up to the regional cooperatives whether to be audited by the new body or certified public accountants.