Structural reform is lagging behind in the farm sector and the Japan Agricultural Cooperatives group should undergo a major overhaul, the agricultural ministry said Tuesday in its annual white paper.
The fiscal 2002 agricultural white paper criticizes JA, saying there is a tendency for large-scale farmers to leave the group because it has been unable to respond fully to the changing environment, including the diversifying needs of consumers and the depressed prices of agricultural products.
The paper calls on JA to carry out reform measures, including expanding direct sales to customers and cutting distribution costs.
It says the situation surrounding Japanese agriculture is changing because the number of farmers is declining due to the graying of the sector's labor force, adding that suitable farmland is increasingly being abandoned.
The paper says amassing agricultural land for large-scale farm management will accelerate structural reforms, creating a "last chance" for reforms. It emphasizes that ensuring effective and stable management of the agricultural sector is essential in achieving the reforms.
The paper adds that agricultural policy faces other challenges, including ensuring food safety, changing the rice policy and conducting agricultural negotiations at the World Trade Organization as part of global trade liberalization.
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