Proposal on regulatory reform in the agricultural sector submitted by a farm company, Shinsengumi

Proposal on regulatory reform in the agricultural sector submitted by a farm company, Shinsengumi


Shinsengumi is one of the proposers which focuses on agriculture and was invited to the hearing at the Working Group

Shinsengumi is a private company operating farming in Aichi prefecture.  Although most private companies are not allowed to own farmlands in Japan by regulation, there is an exception for privately-owned companies which meet strict requirements (e.g., shares are owned by conventional farmers, executive directors are engaged in farm-work by themselves, etc.), and the company is one of such exceptional ones.

Its CEO, Shigeaki Okamoto, who is a farmer for generations attended the hearing meeting on September 9, and made three significant proposals about agriculture.

The first proposal is to remove the restriction on corporate ownership of farmlands.
While it may sound strange as his company is allowed to own the farmlands, he insisted the restriction should be removed because it rules out the possibility that his company grows to be a publicly listed company and gains more capital.

The second proposal is to remove a restriction that deters banks from lending money to farmers, including farm companies.  There exist officially organized guarantors in Japan that provide guarantee services for small companies which often lack collaterals, but such guarantors are not allowed to guarantee farmers’ debts by regulation.  Due to that, most farmers cannot borrow money from banks and are compelled to borrow from the local agricultural cooperatives, narrowing financing opportunities for farmers.

The third proposal is to remove unreasonable restrictions on usage of farmlands.  For example, it is not allowed under the existing law to open a restaurant inside the farmland to provide meals using the farm products.  The reason for the restriction is that the farmlands must be used for farming alone and cannot be used otherwise, but obviously such restrictions hinder new inventions that can boost agricultural businesses.

These issues have been also proposed by some other companies and local governments, and the working group regards the issues as particularly important.


(Eiji HARA, PPPC President)