Sunday, February 08, 2015

JA-Zenchu Reform Appears to be Proceeding on Abe Administration’s Terms

Nikkei headlined its February 7 morning edition with “Nōkyō-kaikaku Ōosuji Kaiketsu e (Agricultural Cooperative Reform Largely on the Way to Resolution).” According to the report, Abe administration will announce on February 12 that the Central Union of Agricultural Co-operatives, or JA-Zenchu for short, will lose its special legal status and become a general incorporated association. JA-Zenchu will lose the authority to audit and provide guidance to the local agricultural cooperatives. Instead, its auditing arm will be separated and must compete with ordinary auditing firms for the coop business. The National Federation of Agricultural Co-operative Associations (ZEN-NOH), its mammoth produce wholesale and input and provider arm, will be allowed to transform itself into an ordinary stock company. Local cooperatives will be encouraged to transfer their financial businesses to the Norin Chukin Bank.

I cannot claim that I got this one right—far from it, since I wrote:

“My guess is that the Abe administration will look for some form of JA devolution, taking some of the powers and money away from JA-Zenchu and giving more powers and a bigger cut of the membership fees to the prefectural cooperatives. The Abe administration could also give JA-Zenchu a cut of the inevitable TPP easement money and a role in forming and executing a response strategy.

“I cannot rule out the possibility that the Abe administration will just go ahead with its plans despite the outcome of the Saga election.”

The devil is in the details, but so far, the outcome looks much closer to the latter than the former. It is surely being made possible by the fact that individual LDP Diet members are far more intimately connected to their respective prefectural associations, which, tellingly, will be preserved. In hindsight, I should have placed more trust in the incentive devolution would have for the prefectural associations. In any case, this does not address the core needs of agricultural reform. If he takes a whack at the agricultural committees, though, that would be a meaningful break with the past, depending on how deep he cuts.

And on a totally different matter, I also said that Prime Minister Abe would not go to Yasukuni, and his second work anniversary passed without incident. His administration still has some legs, so never say never, but so far, so good.

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