Considerations on Agricultural Control (Part 1) — Shinjiro Koizumi and the Shadows Lurking Behind
Concerns over "JA Privatization" Emerge with Shinjiro Koizumi's Appointment as Minister of Agriculture, Forestry and Fisheries
In 2025, Shinjiro Koizumi was appointed Minister of Agriculture, Forestry and Fisheries, and Japanese agricultural policy began to shift significantly.
At his inaugural press conference, he announced that he would take emergency measures through "political judgment" to address the soaring price of rice, abandoning the conventional bidding system and switching to a private contract system. He demonstrated a stance of prioritizing price reduction and consumer peace of mind above all else. However, in the background, agricultural stakeholders are concerned about the
privatization of agricultural cooperatives (JA) and the risk of opening up 150 trillion yen in assets to foreign capital. Mr. Koizumi has previously advocated for "structural reform" and "breaking down vested interests," and this appointment is also seen as a move to accelerate the reform path. The problem is that this reform could lead to the
weakening or dismantling of the organization that serves as the core of Japanese agriculture, the JA
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Summary of Shinjiro Koizumi's Inaugural Press Conference as Minister of Agriculture, Forestry and Fisheries
Rice price measures are the top priority. Stop bidding and respond immediately with a private contract system.
Sense of crisis regarding food security. Promote smart agriculture and large-scale operations.
Promote JA reform. Break away from dependence on materials and move toward high-value-added sales.
Shift fisheries policy to an offensive stance. Expand the "Umi-gyo" (marine industry) nationwide.
Exports and international negotiations prioritize national interest. Also assert the legitimacy of Fukushima products.
Agricultural policy to BtoC. Emphasize speed and "respond with results."
Breakdown of the 150 Trillion Yen in Agricultural Cooperative Assets
The total assets of the agricultural cooperative group are said to amount to approximately 150 trillion yen. This is mainly concentrated in three core institutions.
JA Bank (including The Norinchukin Bank)
It has a three-tier structure consisting of local agricultural cooperatives nationwide, prefectural credit federations, and The Norinchukin Bank at the top, which mainly invests and manages deposits from farmers and local residents in government bonds, stocks, and foreign bonds. Total assets exceed 100 trillion yen.JA Kyosai Ren (JA Mutual Insurance)
Provides mutual insurance services for farmers and invests insurance premium income. Total assets are said to be approximately 50 trillion yen.Zen-Noh (National Federation of Agricultural Cooperative Associations)
Responsible for business sectors such as agricultural materials, distribution, and trade. It holds assets such as real estate and logistics facilities, but is different from the financial sector.
What these institutions are responsible for is not just asset management. They are the "agricultural support infrastructure" itself, including agricultural production bases, regional finance, and safety nets in times of disaster.
What happens if agricultural cooperatives (JA) are privatized?
If the functions of JA are separated or privatized, and furthermore, if those assets are managed and controlled by foreign capital, the following risks could become a reality.
Farmers' savings and insurance premiums are siphoned off by foreign capital
There is a danger that assets will not be used for agricultural support within Japan, but will flow out to global capital markets.Loans and management support for farmers are shrinking
The possibility that small-scale local farmers will be excluded from finance due to the logic of foreign capital that prioritizes profitability.The democratic governance of agricultural cooperatives is collapsing
If they become joint-stock companies rather than cooperatives, the intentions of shareholders will be prioritized, and farmers will lose their voice as investors.The foundation of the regional economy is weakening
The hollowing out of the local economy will progress as the funding that JA has long provided to local businesses and agricultural organizations is cut off.Food security is being threatened
A shift toward commercial policies risks undermining the sustainability of domestic agriculture and increasing reliance on imports.Fire sales of assets and transfer to foreign capital
The possibility that real estate, lodging facilities, and distribution facilities held by agricultural cooperatives will be sold off at low prices, similar to the 'Kanpo no Yado' hotels.The rise of foreign insurance and agricultural supply products
Due to a sales policy that prioritizes profitability, high-profit imported products will be prioritized over agricultural support suited to the region.
Is the privatization of JA even possible in the first place?
Theoretically, the privatization of JA is possible under the current system.
However, this would require amendment of the Agricultural Cooperative Act, and under the current system, JA is strictly defined as a cooperative organization based on non-profit and mutual aid. Furthermore, agricultural cooperatives are also the LDP's electoral base in rural areas, and the conversion of agricultural cooperatives into joint-stock companies or their split-up and privatization would be met with strong political and social backlash.
Therefore, at this point, privatization is unrealistic, and
the former Minister Koizumi did not explicitly state this in his press conference,
suggesting that he is merely seeking internal reform and a business model transformation of the agricultural cooperatives, and
above all, rice, he emphasized that the balance between domestic production bases and consumer prices is the highest priority.
Furthermore, under the Farmland Act, the direct acquisition of farmland by foreign capital is prohibited in principle, and foreign entry into agriculture is also strictly restricted by the system.
However, foreign entry as a 'loophole,' such as through investment in domestic corporations, joint ventures, or indirect acquisition of agricultural corporations, has already become a reality, and it cannot be overlooked that the structure of capital is quietly changing within this institutional gray zone.
The following is one example of such a 'loophole.'
Acquisition of a Hokkaido agricultural corporation by Chinese capital
Form: Acquiring a Japanese corporation and participating in farmland lease operations
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Content:
There are cases in Hokkaido where multiple agricultural corporations have been acquired by foreign investment funds.
On the surface, they are operated by Japanese corporations, but in reality, Chinese capital is involved in decision-making.
Characteristics: While the ownership of the farmland itself is in the name of a domestic corporation, the actual management is under the umbrella of foreign capital.
Example of indirect acquisition of farmland through the acquisition of foreign-owned agricultural corporations↓
Toyonuka District, Biratori Town, Hokkaido Google Maps↓
A Warning Against Open Competition
It cannot be denied that agricultural cooperatives certainly have issues that need reform, such as inefficient operations, bureaucratic decision-making, and an excessive reliance on farmers. However, does that mean that splitting and privatizing their infrastructure and exposing their assets to the global market is a 'righteous reform'?
The 'open competition' and 'entry of diverse players' advocated by Mr. Koizumi are effective in creating a certain level of tension for JA.
However, if the extension of that logic leads to the quiet privatization of assets and opening the door to foreign capital, then it will be a major crossroads not only for Japanese agriculture but for 'food,' 'local regions,' and 'national assets' as a whole.
Agricultural cooperatives are not merely distribution or financial institutions. They are a 'system of mutual aid' that regions and farmers have built up over many years, and if they are dismantled based on market logic without understanding their essential value, it will result in an irreparable loss.
Summary
The appointment of Shinjiro Koizumi as Minister of Agriculture, Forestry and Fisheries could be an opportunity to bring about a new turning point in agricultural policy. But at the same time, we must also look at the side effects of structural reforms such as 'privatization of agricultural cooperatives' and 'opening to foreign capital.' The 150 trillion yen in agricultural cooperative assets is the foundation for farmers' peace of mind, safety, and the regional economy, and exposing it to the market entails national risks that go beyond mere reform.
In future policy management, while aiming for efficiency and marketization in agricultural policy, the perspective of how to protect and nurture the role of agricultural cooperatives as public infrastructure that supports Japanese agriculture and local communities will be essential.
I consider that the balance between reform and conservation, openness and self-reliance, is the greatest theme required for future agricultural policy.