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«DEVELOPMENT STRATEGY OF THE AGRICULTURAL COOPERATIVES IN THE MEKONG DELTA, VIETNAM: SIGNIFICATION OF DIVERSIFICATION INTO BUSUNESS AND ACTITITIES ...»

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Depending on their number members are either directly or indirectly represented at the general assembly, the highest decision-making body of a co-operative. It is electing the management and supervisory boards. Self-responsibility means that members themselves are responsible for the foundation and upkeep of the co-operative enterprise with respect to business partners in order to establish confidence in economic life (“joint liability”). While formerly members were liable with all their property, they are now liable with their shares only. Members of the management and supervisory boards might be liable with their private property if found guilty of mis-management (IRU, 1991: 9; ZERCHE et al.: 9-14).

Two aspects that are of particular importance of any existing or future self-help organisation refer to internal autonomy and external autonomy. Internal autonomy relates to the organisational structure, the management system and the participatory organisation or the internal democracy. External or economic autonomy requires a certain economic efficiency as well as supportive or federate structures which are applying the principles of subsidiarity. Both aspects have to be fulfilled if the self-help organisation is supposed to have a certain economic viability and a social acceptance of its members.

Thus, co-operatives basically comprise individuals who voluntarily join a social group (“co-operative society”). At the same time the co-operative represents a business unit which has to be registered to participate in economic life (“co-operative enterprise”). Hence, co-operatives are characterised by their dual

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1.6.3 Agricultural cooperatives in the World 1.6.3.1 Agricultural cooperatives in Japan21 Japan consists of four major islands Hokkaido, Honshu, Shikoku and Kyushu and a number of island chains. The archipelago, lying off the eastern coast of the Asian Continent, stretches in an area 3,800 kilometers long and covering an area of 378 thousand square kilometers. The climate is generally mild and the four seasons are clearly distinct. The country is mountainous and arable land is very limited; only 12.7 % of Japan is cultivated, and paddy fields occupy 54.4% of this area. Total cultivated land in 2007 was 4,650 thousand hectares, making the average Japanese farm only 1.9 hectares in size.

Agriculture in Japan is supported by some 2.52 million farming households, representing 5.1% of total Japanese households which number 49,53 million.

The number of population of farming households is approximately 7.64 million, 6.0% of the total population (January,2006). The number of farming households, as well as that of the farming population, has been steadily decreasing.

The origins of Cooperatives in Japan can be traced back to credit unions such as “Hohtoku-sha” established in 1843 by farmers-activists, including Sontoku Ninomiya. These credit unions embodied a spirit of mutual aid at a time when there were no formal cooperative organizations.

In 1868 Japan underwent a great transformation. After 300 years of JA-Zenchu, 2008, the Agricultural Cooperative in Japan, pp 2-7 21

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At the same time it embarked on a course of modernization and industrialization.

This necessarily led to a situation where traditional small producers were forced to compete with newer, much larger capitalist enterprises, creating an urgent demand for cooperative organizations that would bring economies of scale to small operators.

Japan's first modern cooperatives were the sales unions established to facilitate community trade. Between the late 1870s and the late 1890s, silk and tea producers established cooperatives in Gunma and Shizuoka Prefectures, the main producing areas of silk and tea, respectively. The government, for its part, strongly felt the need to promote the creation of cooperatives for the sake of the development of industry and the nurturing of small-scale producers. After many twists and turns, through efforts of Yajiro Shinagawa, Tosuke Hirata, and many others the Cooperative Society Law was enacted in 1900, leading to the establishment of cooperatives (Sangyo Kumiai) nationwide. The law authorized five types of cooperative: credit, marketing, purchasing, utilization (manufacturing) and usage.

After World War I ended, the Japanese economy entered a severe depression.

Farmers were hit by a drastic fall in agricultural commodity prices. The concurrent financial crisis also affected cooperatives to a great extent. Then, in 1925, cooperative leaders initiated a campaign to revitalize the movement, altering the former strategy centering upon landowners, and calling on all farming households to become members. By that time, cooperative members had

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Co-operatives in 1923. Various other national federations, organized according to product, were established during this period.

After the war, the democratization of Japan’s politics and economy was carried forward with the help of the Occupation Force, and the biggest part of this endeavor was agricultural land reform. This completely abolished the tenant farmer system and gave almost all farmers status as independent farm owners.

The Agricultural Cooperative Society Law, enacted in 1947, established agricultural cooperatives (Nokyo) as economic organizations to replace Nogyokai and guaranteed farmers' independence. Consequently, from 1948 to 1949, an increasing number of agricultural cooperatives were established throughout Japan. During this same period, a number of related federations, organized according to activity carried out by agricultural cooperatives, were founded.





Among these were federations relating to mutual insurance activities newly approved by the Agricultural Cooperatives Society Law.

After the World War II, agricultural cooperatives soon encountered serious financial difficulties because of ongoing changes in the postwar economy and the government's deflation policy.

In 1954, the Agricultural Cooperative Society Law was revised and an apex organization, the Central Union of Agricultural Co-operatives (JA-ZENCHU) was established to guide and coordinate Japan's agricultural cooperative movement at the national level. Similarly, the Prefectural Central Union of Agricultural Cooperatives was established to carry out the same tasks at the prefectural level.

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industry, entered a period of explosive growth, bolstered by the government's high economic growth policies.

In 1961, the Agricultural Co-operatives Amalgamation Assistance Law was enacted, and by 1965 the number of primary multipurpose agricultural cooperatives decreased from 11,586 to 7,320. Increases in size as a result of this reduction in the number made it possible to solidify the business and management base, improve facilities, and enter into new fields of activity.

Moreover, with an increase in the associate membership (non-farmers), agricultural cooperative activities became even more widespread.

In April 1992, JA ZENCHU and its member organizations of agricultural cooperatives in the country confirmed that “JA”, which stands for “Japan Agricultural Cooperatives,” should be adopted as their new, simplified and common abbreviation so as to represent a new and popular image of agricultural cooperatives in the country. JA's activities include the following (i)Residential Development and Asset Management; (ii) Comprehensive Life and Home Centers;

(iii) Public Relations; (iv) Welfare for the Elderly ; (v) Organic Agriculture and Consumer Relations.

Membership of JA is approximately 9,320 thousand (as of the end of 2006), and includes almost all farmers in Japan. A typical cooperative (10,951 members, on average) consists of farmers as regular members and non-farmers as associate members. Membership requisites are stipulated in the articles of association for respective cooperatives, but they generally require farmers to own and operate

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Agri-related associations that manage farming operations can also obtain cooperative membership.

Citizens residing in the vicinity of a JA can become an associate member of that JA. Associate members benefit from JA services, but cannot vote at general meetings or elect board members. Use of any JA services by non-members is limited to not more than one fifth that of the members. Regular members account for 70% to 80% of total membership in farming regions, but there are cooperatives in urban areas where the ratio of regular members is less than 50%.

Investment in multipurpose cooperatives averages ¥167,000 per member.

Average investment per cooperative is ¥1.8 billion, and total investment is ¥1,557.5 billion.

Types of Agricultural Cooperatives: JA encompasses both multipurpose and single-purpose cooperatives, the difference determined by member farmhouses and the type of service provided.

Farmers organize an agricultural cooperative and use its services as well as operate the cooperative. In terms of total membership, multi-purpose agricultural cooperatives predominate in Japan.

Multi-purpose cooperatives offer guidance on farming and lifestyle matters, market agricultural products, supply production materials and daily necessities, loan and saving service, provide insurance against emergencies, and establish facilities for joint use.

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lifestyle matters, marketing, purchasing, credit, and insurance, and handle all of main agricultural products within the region. Multipurpose agricultural cooperatives cover all the cities, towns and villages throughout Japan.

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expected to reduce this number to less than 500 agricultural cooperatives.

Single-purpose agricultural cooperatives are organized by farmers, who are active in specific areas of production such as dairy farming, raising livestock, horticulture and other specialized farming. They focus on marketing member farmers' products and supplying production materials and guidance. There are 2,298 single-purpose agricultural cooperatives throughout Japan (as of the end of March 2008).

Major activities conducted by JA are outlined as follows: farm guidance, better living guidance, marketing product processing, purchasing, credit, mutual insurance, utilization, welfare, real estate, tourism, education, public relations, and lobbying, 1.6.3.2 Agricultural cooperatives in Thailand22 The history of agricultural cooperatives in Thailand can be traced back to 1914, when the Thai economy opened to international trade during the reign of King Rama V. Rice production was becoming commercialized, but farmers could not benefit from the situation. Moreover, the national disasters such as 22 Suwanna Thuvachote, Kasetsart University, 2006, Agricultural Cooperatives in Thailand, pp3-9

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being unable to repay their loans. Consequently, they were losing their farmlands, turned to hired-laborers and thus left their debts unpaid. Based on

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Thailand through a special assistance program. It was believed that this would help the farmers to pay their debts and improve their livelihood.

In 1916, the Thai government created the first cooperative society, as a

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credit cooperative” with unlimited liability, following the Raiffesen credit cooperative type with a single purpose of providing farm credit to help the severely indebt farmers. Sixteen most indebt farmers in the province were

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cooperatives had prevailed in the country until 1983, after that, other types of cooperatives were established in responding to the people’s need.

With a view to facilitate financing support to cooperatives and their members, the government set up the “Bank for Cooperative” in 1947. Credit cooperatives were urged to hold share capital in the bank with the hope that

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were established in Chiangmai and Uttaradit provinces respectively.

Unfortunately, the enactment of a new “Commercial Bank Law” in 1962 limited the services on deposit on current accounts to be provided only by commercial banks. The two existing provincial cooperative banks had reorganized as credit cooperative federations and a program to set up new cooperative banks was dropped. In 1966, the “Bank for Agricultural and Agricultural Cooperative (BAAC)”, a state enterprise, was established to be a financial centre for agricultural cooperatives as well as individual farmers.

In 1968, the government enacted the “Cooperative Act, B.E.2511” to facilitate the expansion and improvement of the cooperatives. This legislation embodied two important features, the amalgamation of credit cooperatives at village level to district level and the establishment of the Cooperative League of Thailand (CLT) to function as the apex organization of the cooperative movement. The amalgamation was the most important one, as it enhanced the

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cooperatives were officially categorized as “agricultural cooperatives”. In 1969, the government changed the status of agricultural cooperatives from unlimited societies to limited ones. This year, the Agricultural Cooperative Federation of Thailand was also established as the apex agricultural cooperative of the country.

Membership (Jan, 2006) the Cooperative Movement of Thailand was

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members. These represented more than 60% of the total primary societies as well as the total individual membership of the cooperatives of the country.

Business activities and scopes of agricultural cooperatives including credit business, saving and deposit business, marketing business and purchasing business.

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settlement cooperative, fisheries cooperative, consumer cooperative, thrift and credit cooperative, service cooperative and credit union cooperative.



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