On the Development of Large Scale Cooperative Group of Poultry Farms in Suburban Districts : A Case Study of the Ogawara Poultry Farms

The poultry farming of layers in Japan has been under production control since five years ago. Many poultry farmers have organized cooperative farms or cooperative systems, or have been incorporated into vertical integrations under sponsorship of big businesses. Their intention was to get the benefits of technological innovation and scale economy through expansion of the poultry business size and organizational improvements. This has resulted in the strengthening of the competing power with other poultry producing regions, because now they were able to save production and marketing costs, and realize higher market prices of products through the quality improvement of eggs and by-products or through strengthening of the market bargaining power. This paper intends to clarify the mechanism of the development of poultry farms by an organized cooperative system that includes all the poultry farmers of the district. Ogawara district in the suburbs of Hiroshima City was selected for a case study of this subject. This district started the organization of a cooperative system including all the poultry farmers of the district 23 years ago, and recently grew out into a large size cooperative system which keeps 250 thousands hens in the district as a whole. This success was reached mainly thanks to the efforts of several distinguished leaders in the Ogawara Poultry Cooperatives. They planned the establishment of the regional development plan and put it in practice. In the main time they planned future directions for the regional farming. Active cooperation of the individual poultry farmers also should not be neglected, thanks to them the leader was able to put into motion a series of system innovations together with a tremendous amount of investments in cooperatively utilized establishments. This was made possible only by the positive approval of the poultry farmers. The cooperative system of poultry farmers actively promoted the New Rural Community Reconstruction Project in the settlement period, the Agricultural Structure Improvement Project in the development period, and the Animal Husbandry Environment Improvement Project in the matured period. The cooperative system, however, refused to accept the uniform program of the projects proposed by the Government and demanded to coordinate and adapt the projects to the actual situations of the district. Such projects in fact have established the base of rationalization and raise in efficiency of poultry farming in the district. Particularly in the matured period, the Ogawara Poultry Cooperative, an agricultural partnership cooperation, together with the Ogawara Branch-office of Koyo-cho Agricultural Cooperative invested jointly in cooperative enterprises such as a matured chicken raising center; an egg grading and packaging center; a feed stock point, and a chicken dropping disposing center. They also systematized the management process of individual farms, of the cooperative system and of the agricultural cooperative. These activities finally resulted in the establishment of a large size poultry farming district, keeping 250 thousands of hens. The following are major improvements achieved in the above-mentioned development process: (1) They could decrease the chicken replacement cost through the application of the system of group replacement and all-in, all-out of hens. (2) They could decrease the operating cost through the application of the procedures of sale pooling and uniform price payment. They also saved the costs of grading and packaging eggs, because the seasonal variation of egg production was reduced and the planning of production and marketing was performed successfully through the abovementioned procedures. (3) The chicken dropping was mixed with sawdust, fermented and finally transformed into effective organic fertilzer. This solved the dropping pollution problem, and the additional revenue from the sale of the organic fertilizer could cover the disposing costs. The marketing costs of the organic fertilizer were efficiently saved through mass-transaction among agricultural cooperatives. (4) The scale economics of cooperatives were allocated to every size of poultry farms. They helped even small size farms to survive stably and resulted in keeping the optimum size of egg production in all size of poultry farms