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Establishment of "Next-Generation Agri-Food Consortium"

March 2, 2009


In February this year, The Japan Research Institute, Limited established a "Next-Generation Agri-Food Consortium", an organization whose mission is to foster new agri-food businesses and build a sustainable agricultural infrastructure, and today held an inaugural meeting, attended by the 13 private-sector companies participating in the Consortium, which include retailers, trading companies and plant makers.
The Consortium's aims are to create a market for "semi-premium agricultural products" that can be sold at higher prices than standard products and to establish sustainable local infrastructure based on the use of local resources. It will study new business models for the agri-food industry and implement model projects.

The 13 participating companies, among which are general trading companies, retailers and gas companies, include Kawasaki Plant Systems, Ltd., JFE Life Corporation, Kobelco Eco-Solutions Co., Ltd., Seven & I Holdings Co., Ltd., Daiwa House Industry Co., Ltd., Nichirei Corporation, and Watanabe Pipe Co., Ltd. (Japanese syllabary order.)

1. Background to the establishment of the Consortium

The agri-food market is worth approximately ¥80 trillion, is attracting widespread interest from industry on the grounds that growing consumer demand for "food safety and peace of mind" presents extensive business opportunities. Great hopes are also riding on potential of the agri-food business to create employment as a pillar of industrial regeneration measures in Japan's flagging regional economies.
At the same time, competing in the agri-food business requires specialist management know-how. It is difficult for companies from other industries, which lack the know-how and marketing skills that are required at every stage from production through distribution and sales, to enter the industry, and no small number of companies that have sought to do so in the past have been forced to withdraw.

2. Outline of the Consortium

Within the framework of the Consortium, private-sector enterprises and producers aim to pursue joint studies and trials, build profitable and sustainable business models, and regenerate Japan's agriculture.

(1) Activities

1)The creation of a market for "semi-premium agricultural products" and the establishment of networks

In the past, efforts to regenerate the agricultural sector have focused on premium-brand agricultural products such as premium meats and vegetables. However, because the brand value of premium-brand agricultural products stems from their local identity and rarity, this approach to the regeneration of agriculture is not universally applicable. Moreover, because the scale of the market is limited, it is difficult for many private-sector enterprises to grow their business. The Consortium will therefore focus on the creation of a new market for "semi-premium agricultural products" rather than on leading-brand agricultural products. Semi-premium agricultural products will be clearly differentiated from standard agricultural products by being positioned as tasty, safe, environmentally friendly, high value-added agricultural products, offering peace of mind, that consumers will perceive as "a cut above the rest" (see reference materials).
With regard to the distribution of semi-premium agricultural products, the Consortium will pursue the establishment of networks linking producers, retailers, food service companies, and food processing companies. Producers from some 50 agricultural areas around Japan will be invited to take part in the Consortium as observers. The plan is to hold trials of a system by which producers will do business directly with member companies of the Consortium (direct distribution).

2)The building of sustainable local infrastructure

The worldwide rise in the price of fuel, fertilizers and livestock feeds last year brought pressure to bear on the profits of many producers. If a stable supply of semi-premium agricultural products is to be assured, in both volume and price terms, it is vital to ensure the presence of agricultural infrastructure and local community infrastructure that are not vulnerable to fluctuation of resource prices and that harmonize with the natural environment.
The Consortium will therefore turn its attention to biomass, which is abundantly available at a local level, and set about building local infrastructure that will allow livestock manure and food waste to be re-used locally in the form of biogas (methane gas), eco-feeds (recycled feeds), sheet composting material and liquid compost.
The Consortium will also pursue initiatives designed to make greenhouse farming and plant-factory farming, which are already regarded as energy-efficient farming methods, yet more environmentally friendly through the use of new energy and the introduction of tri-generation. As these methods are less labor-intensive than open-field farming, and contribute to the creation of jobs for women and senior citizens, the Consortium will seek to build up and disseminate know-how through the implementation of model projects.

(2) Period of Activity

Phase I (February-March 2009): Needs & Seeds Identification Taskforce
Phase II (April 2009-March 2010):
Sustainable Infrastructure Taskforce/Matching Model Construction Taskforce

3. Inaugural Meeting

The inaugural meeting held today was conducted before an audience of representatives from some 100 enterprises interested in agri-food business, in addition to the participating companies. Following a presentation on the concept and activities of the Consortium, Mr. Jun'ichi Mizusako, Mayor of Tarumizu City (Kagoshima Prefecture), which is seeking to regenerate the local economy using local resources such as the legendary "Moriizo" shochu, kurobuta pigs, yellowtail and greater amberjack, delivered a keynote speech on directions for next-generation agriculture.

Reference: Next-Generation Agri-Food Consortium website:

For more information on the content of this report, please contact Yasufumi Miwa, the Japan Research Institute, Limited.

Tel: 03-3288-4715

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