Structures for organisation of transactions in Japanese agriculture

This paper presents the results of a 1995 research project aiming at incorporating the transacting costs minimising principle to the Japanese agrarian economy and showing that the Japanese agrarian economy is a transaction costs economy. Japanese agriculture gives unique examples for institutional development and big varieties of modes for governing transactions. Transacting costs economising approach helped us to understand why there are so many kinds of farmf in Japan and part time farming phenomenon; why some farmers buy inputs and other produce them; when farmers buy equipment and when they pay for machinery service supply; what is a reason for permanent labor contracts and why temporary labor has been important in some productions; why some farmers sell products and-other process them; when there are independent family operations and when contract system or totally integrated business prevail; why group farming exists and the role of informal contracts in the Japanese society; why part time farmers rely on cooperatives for input supply and marketing while full time farmers look for market transacting; why common organisations and community institutions have been so important in rice production; why lease would be the most likely way for development of agriculture; why agricultural cooperatives exist and what should be right direction for their reorganisation; why such institutions as quality standards and wholesale markets have been developed by the Government; why technological innovations are free for farmers and what should be future role of agrarian research potential; what are prospects for development of national agrarian transactions and what should the Government role be. Three kinds of data representing different sides of agrarian transactions and types of their organisation has been used. First, available statistical and Census data for land and labor transactions, for contract service transactions, and marketing transactions in Yachio machi - a typical town in Kanto region of Japan. Second, data from the Iand Committee on registered land ownership and land transactions in Nakatsubo hamlet - a typical village in Yachio machi. Third, data about critical dimensions of agrarian transactions and kinds of their organisations from personal interviews with number of farmers, Municipality officials, managers of the Cooperative and other farm and agri-business organisations, leaders of the farm groups, Hamlet leaders, Directors of Extension Office in all major regions of Japan - from Hokkaido to Kyushu.