Change of Farm Transfer System : Establishment of New Transfer System by Unrelated Party(REPORTS AND DISCUSSIONS AT THE ANNUAL MEETING OF THE SOCIETY IN 2000 : Situation and Outlook for Hokkaido Agriculture in the Twenty-First Century)

The purpose of this paper is to discuss the issue of intergenerational farm transfer. The farm transfer process is influenced by many factors. The type of farming or farm size is important, but perhaps more so is the type of ownership; business type or family system; family farm or corporate farm, conjugal or stem family system. Such institutional factors including the taxation system, inheritance customs, and the pension system form the farm transfer system. The current farm transfer system in Japan is a stem family system. Japanese agriculture has been struggling to reform such traditional systems. The basic idea should not be the change from the stem family but to expand the range of farm transfer systems to include both the stem family system and new types. One new farm transfer system is farm succession by an unrelated party of the farm family. There are two ways to do this. One is the foundation of a new farm and another is to use the corporate farm system. In general, corporate farms can accept beginning farmers as employees or regular members (shareholders). But most of corporate farms are organized as farmers' groups on the principle of equality. New farmers are required to invest equal amounts of capital and hold farmland to obtain regular membership. In order to overcome these obstacles, a corporate farm has to change from a farmers' group to a company with greater entrepreneurial skills. Policies should encourage corporate farms to change their business plans and organization. On the other hand, policies should try to establish modern corporate farms that can co-exist with traditional ones because creating new systems is easier that transforming old ones