Yen for Living

Komeri outlet in Sakae Town, Chiba Prefecture

The Central Union of Agricultural Cooperatives, more commonly known by the acronym JA (for Japan Agriculture), or the Japanese abbreviation Nokyo, has, in one form or another, controlled the finances and structure of the country’s farm sector since the early 1950s. That means not only does JA help keep prices high so that farmers can make a living, but provides farm families with everything they need to make that living, from loans to sales of equipment, supplies and fertilizer. It even sells insurance and does banking, under an exception granted by the central government. As with any semi-public organization that has a given field to itself, JA’s operations have become sclerotic over the years. In 2008, the agricultural ministry conducted a survey of farmers. When asked where they bought their fertilizer, 70 percent answered “JA,” but 80 percent of these farmers also answered that they were “dissatisfied” with the cooperative’s prices.

JA is famous for using a lot of middlemen in their sales channels, which invariably drives up the prices of everything they sell. In addition, various handling fees and distribution costs make the prices even higher. In a recent Asahi Shimbun article a professor at the Tokyo University of Agriculture said that with the recession and the possibility of more imports coming into the Japanese market, farmers have become extra sensitive about costs and as a result are beginning to wonder if JA is really looking after their interests properly. Some have already started leaving the cooperative.

But where to go? According to the agricultural ministry survey, only 2.5 percent of farmers were buying their fertilizer from so-called home centers in 2008, but that portion has likely gone up considerably since then. Home centers, called home improvement centers in the U.S., are large retail outlets that sell everything for the home, but mainly supplies that homeowners need for things like repairs or renovations, as well as gardening and landscaping. The Japan DIY (Do-It-Yourself) Association reports that there were 4,310 home centers in Japan in 2011, double the number that existed in 1990. The home center chain with the most outlets is Komeri, who own more than a thousand. And while home center sales have mostly been stagnant since 2005 owing to the growth of other retail models, mainly drug stores, Komeri is also growing. The chain says it plans to double its present number of stores in 10 years’ time.

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Sleep tight: Japan Post data center in Chiba

Since last year, the government has talked about tapping so-called kyumin koza to help fund reconstruction in the areas hit by the March 11 disaster. Kyumin koza are “sleeping bank accounts,” meaning savings in financial institutions that have gone untouched for long periods of time. The government says it needs at least ¥50 billion for reconstruction, and every year banks “uncover” about ¥80 billion in unclaimed accounts, 90 percent of which contain less than ¥10,000 each. For banking purposes the definition of a kyumin koza is an account from which no transactions have been carried out for ten years and whose holder the bank has not been able to contact.

Under such circumstances, banks typically move this money into the plus column on their books, which is why the financial industry isn’t too crazy about the government’s plan to commandeer the comatose cash. The banks’ argument is that even though they have taken over this money, if the account holder does show up with proper identification and other pertinent documentation they will happily return it; but they couldn’t do that if the government has taken it first.

It’s a credible argument, though Japanese weekly magazine Gendai points out that ever since the end of the bubble era in the early 1990s, banks have become very strict about closing bank accounts, meaning that someone who had not touched their money for more than 10 years would probably require a lot of paperwork to prove the account was his. It would thus be very difficult for individuals to access accounts of family members who have died, since those individuals would have to produce death certificates, proof of relationship and other documents. Moreover, an account can only be closed at the branch where it was opened. It’s assumed that a large number of sleeping accounts have gone untouched because the account holder died without informing his or her family of its existence.

Why the sudden jump in "sleeping account" proceeds? →

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