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An Agricultural Company Energizes Rural Tohoku 40 months from the Great East Japan Earthquake: Izunuma-Nousan Corporation in action | Yoshihiro Terada Director-General for Tohoku Region Chief Director, JETRO Sendai Japan External Trade Organization [Date of Issue: 31/October/2014 No.0236-0947]

Date of Issue: 31/october/2014

An Agricultural Company Energizes Rural Tohoku
40 months from the Great East Japan Earthquake: Izunuma-Nousan Corporation in action

Yoshihiro Terada
Director-General for Tohoku Region
Chief Director, JETRO Sendai
Japan External Trade Organization


Izunuma-Nousan Co., Ltd. lies around 60 kilometers to the north of Sendai, close to Izunuma, a swamp area designated as a special natural treasure for its fine waterfowl habitat. I asked Izunuma-Nousan President Hideo Ito about the Tohoku recovery and his vision for the future of Tohoku agriculture. Izunuma-Nousan's main business areas include agriculture (hog-raising, blueberries, rice, etc.), processing and selling ham, sausages and pork; restaurant operation; and direct sales store management.
https://www.izunuma.co.jp/


1. Impact of the Great East Japan Earthquake

Izunuma-Nousan Co., Ltd. is situated a bare five kilometers (as the crow flies) from Kurihara City, which experienced a JMA magnitude 7 earthquake standing as the largest in recorded history. Fields split apart, buildings were damaged, and utensils and other equipment at the company's directly-managed restaurant were destroyed. Power and water both stopped, threatening damage to expensive warehouse stock such as pork, ham and sausages. President Ito and his team gathered the fresh meat which would spoil particularly quickly and drove out to affected areas on the coast to distribute it free of charge. They were able to get hold of home generators to run their refrigerators, but securing the necessary generator fuel remained a trial. Izunuma-Nousan's pig food has traditionally been sourced from Ishinomaki only 40kms away to feed the company's extensive livestock (shipments of 1,000 pigs per annum), but tsunami damage halted supplies from the usual plants on the coast, and the company had to turn to suppliers in Ibaraki Prefecture (400kms), Aichi Prefecture (800kms), Hyogo Prefecture (1,000kms) and even Kyushu(1,600kms). The stock farms used by the company stopped operating for three weeks, on top of which distribution disruptions continued to stall shipments.

According to Izunuma-Nousan president Hideo Ito, even that situation was nothing compared to the damage suffered in coastal areas, and as of immediately after the disaster, the company joined hands with other agricultural companies from around the country to deliver free of charge close to 50 tons of rice to Ishinomaki, Kesennuma, Yamamoto-cho and other municipalities where damage was particularly severe.

In the restaurant immediately after the quake

In the restaurant immediately after the quake

Packing emergency relief supplies (President Ito is on the right)

Packing emergency relief supplies (President Ito is on the right)

2. Recovery from the disaster

Machinery at the stock farms and ham factory which comprise the heart of the company's operations sustained no major damage, and, most importantly, employees were unscathed. The ham factory suffered no damage to key machinery, and was consequently able to plan an early return to business. While the direct-sales store handling the company's products remained in a sorry state, damage to the actual building was limited to cracks, so the store cranked back into action a week later, launching sales not just of the company's products but also of food products and miscellaneous daily goods so as to provide greater support for the daily lives of local residents. The store was able to officially resume operations a month later.

There was initially some concern about radioactive contamination of the pigs which are the company's greatest asset, but inspection results revealed no problems in that regard. While it remained difficult to procure food, the company managed to ride out post-disaster difficulties without losing a single pig.

Because the disaster struck in early March, there was fortunately still no water in the company's rice paddies. Cracks in paths between fields were repaired along with other damage, and rice-planting went ahead in late May as usual. The harvested rice passed contamination inspections and was successfully shipped. The company's blueberry fields were unharmed.

Distribution was also restored three months after the disaster, enabling the company to get its shipments of pork, ham and other products back in full swing. In 2011, nationwide support brought in a flood of orders, so that despite three whole months during which the company could not ship, it was still able to maintain sales at the same level as the previous year.

3. Difficulty of agricultural management and advantages of agricultural companies

Izunuma-Nousan ham gift set

Izunuma-Nousan ham gift set

Paddy field

Paddy field

As a corporation, Izunuma-Nousan has five hectares (500 ares) of paddy fields and 30 ares of blueberry fields, and also ships 1,000 pigs per annum. Its ham, sausage and pork sales comprise the bulk of the company's sales, whereas rice sales are only 180th of total sales, below even blueberry fields despite their much smaller scale. In terms of profit, the disparity is even greater.

Ito believes that the inexorable trend toward internationalization will make agricultural management based solely on rice production increasingly difficult, and that the role of companies in agriculture will continue to grow. Because Izunuma-Nousan is a corporation, it has a ham and sausage section with a high profit ratio, while it can also supply high-added-value products and services through its directly-managed store and restaurant. Wholesale and Internet sales profits are also a key source of profit. For the sake of stable management, where Hong Kong is currently the sole destination for Izunuma-Nousan's exports,
Making sausages at the factory

Making sausages at the factory

Ito wants to use support from JETRO and elsewhere to substantially bulk up the company's exports to Asia to ultimately account for around 10 percent of total sales.

Apparently, most people who throw in their office jobs in the city to take up farming in the country run up against the harsh realities of agricultural management and end up going back to town. Ito identifies the following merits of Izunuma-Nousan becoming a corporation:
(1) Social security and other welfare support
(2) A working environment offering a five-day week and paid leave, etc.
(3) Social credibility as an organization
(4) Securing funds for capital investment and mechanization (greater efficiency)
(5) Ability to keep up with continually-evolving leading-edge agricultural technology
(6) Employment of top-class personnel

4. Securing the future prosperity of agriculture and farming communities

As the farming population continues to age not just in Tohoku but around Japan, leaving few successors or new farmers to step into retired farmers' traces, Ito is concerned that within a decade, the current generation of farmers will have vanished entirely, leaving a major question mark over the future of Japanese agriculture. That's where he sees the above role of agricultural corporations taking on a growing importance.

Up until mid-1960s, Japan's rural villages each had a distinct culture, and local production for local consumption was taken for granted. According to Ito, a project "seeking nostalgia in the future" that was launched in 2011 references that era.

Ito envisages each village considering the optimal industries for their particular area and attracting people out from the city. Truly delicious food tends to lose some of its flavor when taken too far away, so Ito wants that food to be eaten straight away in the place where it has been harvested while it is still fresh. When people eat food in its proper context-looking out over the nature and fields surrounding the village of origin and listening to the stories of the farmers who created it-food doubles or even triples in value, becoming culture in its own right. In other words, that culture is not in city suburbs, but rather in villages far away from city lights.

Directly-managed restaurant

Directly-managed restaurant "Kumpel"

Izunuma-Nousan ham

Izunuma-Nousan ham

Ito believes that with agriculture's future hanging in the balance, agricultural companies can and should become the heart of villages and inspire and lead the whole rural community, and his argument is certainly compelling. Surely we all want to see Japan's beautiful rural landscapes sustained 50 or 100 years from now, regardless of the actual agricultural entity.

Special natural treasure Izunuma

Special natural treasure Izunuma

President Ito in front of

President Ito in front of "Kumpel"


(original article : Japanese)
(For the Japanese version of this article)


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