Journalists Talk about The Norinchukin Bank and Japanese Agriculture!

Transcription

1 K y ew s IK H H AS R U AY E T B K o od N I m h bu n A MA N I m U H o R S Y A U H K FU ur S A Sh m bu K A A M D h sa n T N k ke JI A UD K K Journalsts Talk about The Nornchukn Bank and Japanese Agrculture! How do the Japanese mass meda and socety see and understand The Nornchukn Bank (hereafter Nornchukn )? What s expected of Nornchukn at a tme when Japanese agrculture s under pressure to transform tself and the fnancal envronment s changng at home and abroad? We heard unreserved vews on these topcs from four journalsts who have covered Nornchukn. 16

2 Why Is Nornchukn Dffcult to Understand? Fukushma: It s snce I started to cover the Mnstry of Agrculture, Forestry and Fsheres (MAFF) that I have come to know n detal about Nornchukn and the framework called JA Bank. JA Bank refers to a framework consstng of three levels of organzaton the Japan Agrcultural Cooperatves ( JA ) that form local networks of farmers; the Prefectural Bankng Federatons of Agrcultural Cooperatves ( JA Shnnoren ); and The Nornchukn Bank servng as a natonal network for provdng fnancal servces. The framework of JA Bank and the respectve roles of JA, JA Shnnoren and Nornchukn are not well known. Msunderstandngs concernng Nornchukn mght stem from such lttle recognton. Kobayash: I also cover the MAFF and am not famlar wth the fnancal ndustry. So, at frst, I had thought that a bank called JA Bank exsts. Later, I was surprsed to learn that JA Bank does not refer to a sngle bank but rather to a framework n whch JA, JA Shnnoren and Nornchukn play respectve roles to create flows of money. I found t dffcult to get a whole pcture of the framework quckly. It s almost mpossble to understand Nornchukn wthout knowng the whole pcture. kuda: Because I started by coverng fnancal affars at my work, most of my understandng of Nornchukn was that t was a huge nsttutonal nvestor wthout a strong mpresson of ts loan busness. Savngs at JAs around the naton are collected at Nornchukn, wth assets now reachng 100 trllon yen. I thnk Nornchukn s perhaps second to the Government Penson Investment Fund (GPIF) n terms of asset sze. In addton, Nornchukn has long dealt wth varous overseas nvestments and alternatve nvestments. In other words, snce we have followed the aspects of Nornchukn more as an nsttutonal nvestor rather than as a loan provder, t s not easy to wrte on the topc of the agrcultural loans provded by Nornchukn. da: I am currently an nternatonal correspondent, but t was back n the 1990s when I frst reported on Nornchukn a tme when the ssue of falng housng loan companes had attracted attenton. The theme then was Nornchukn as a lendng nsttuton. After that, however, I focused on the aspect of Nornchukn as an nsttutonal nvestor, wth fewer chances to look at the aspect of Nornchukn as an agrcultural fnancal nsttuton. As you can see from the profles of the journalsts who follow the ssues of Nornchukn, some from the fnancal feld and some from the agrcultural feld, Nornchukn has two faces, whch I suppose makes t less understandable. The puzzlng part s whether you should look at Nornchukn as a sole fnancal nsttuton or as part of JA Bank. kuda: But Nornchukn s qute smple when you see t as a huge nsttutonal nvestor. da: Nornchukn as a fnancal nsttuton s not so dfferent from other prvate commercal banks. In that sense, Nornchukn s easly understandable. However, the exact relatonshp of Nornchukn wth JA and ts role wthn JA Bank stll puzzle me. Kobayash: Perhaps not many people have a clear and correct understandng of what Nornchukn and JA Bank really are. People n the agrcultural busness or those who have relatonshps wth Nornchukn mght understand, but for others the name of Nornchukn only comes up n government debates. da: The most complcated part s how Nornchukn should be postoned. Should Nornchukn handle agrcultural loans? r leave that to JA and JA Shnnoren wth Nornchukn just specalzng n managng funds? How should Nornchukn be postoned wthn the entre JA Group? Maybe ths ssue should start wth a dscusson of how to treat the ndvdual JAs. Reasons Why Nornchukn Bears the Brunt of Attacks Kobayash: From the vewpont of agrcultural fnance, when you thnk of what the JA Group as a whole should do to answer the ncreasngly strong call to enhance the compettve edge of Japanese agrculture, whch s also promoted by natonal governmental polces, t s mportant to consder how to enable the JA Group to perform ts comprehensve strengths. Due to the huge sze of JA Bank, whch conssts of JA, JA Shnnoren and Nornchukn, the organzaton could form slos. However, the group as a whole has a tremendous amount of nformaton on Japanese agrculture and on fnance. Based on such nformaton, I thnk JA Bank can promote ts efforts more to fgure out what t can provde for Japanese 17

3 agrculture. Kyodo News TERUHIK KBAYASHI Asah Shmbun MAKT DA Makoto da Senor Internatonal Correspondent at Foregn News Secton/Staff Wrter at Investgatve Reportng Secton, The Asah Shmbun Company Born n Nagasak Prefecture. Snce the 1990s, he has served as a reporter and a chef reporter n the feld of fnancal affars. Currently, he s part of the nternatonal press. Fukushma: Because Nornchukn has a clear and certan recognton of ts own roles, I assume that t has not felt the need to communcate externally for a long tme. It has adhered to ts own roles fathfully wthout commttng to publc relatons efforts. That s one of the reasons why we have these questons about what Nornchukn s. da: I agree. I thnk Nornchukn has not made actve efforts to make t understood by sayng ths s what we are. Maybe t ddn t even need to do so. That s why t has been able to keep a low profle untl now. kuda: The general publc and those who have lttle nterest n these matters beleve that Nornchukn s a governmental fnancal nsttuton or the lke. But t s not. Nornchukn should do more to delver at least that level of message. Nornchukn s name mght nvte poltcal attack, but n practce t s just a prvate commercal bank. Nevertheless, there are crcumstances that force t to follow poltcal ntentons. That s somethng I do not feel s rght. Kobayash: When Mr. Shnjro Kozum then Drector of the Agrculture and Forestry Dvson and now Chef Deputy Secretary-General of the Lberal Democratc Party of Japan made a statement crtczng Nornchukn relatng to the reform of the government s agrcultural admnstraton, I had a strong mpresson that t was an easy target for crtcsm from a poltcal space. The name The Nornchukn Bank tself, whch lterally ncludes words meanng central bank, seems to suggest poltcal nvolvement. Nornchukn has managed funds of about 70 trllon yen; nevertheless, ts functons and roles are not well known. Such poor recognton mght have exposed t to crtcsm. From the standpont of Nornchukn s roles n the context of turnng agrculture nto a growth ndustry, I thnk the crtcsm was partly unavodable. It s less vsble where Nornchukn plays roles n promotng the revtalzaton or growth of the agrculture, forestry and fshery ndustres. The exstence of JA and JA Shnnoren mght make how Nornchukn s functonng less apparent. To counter the severe crtcsm, Nornchukn should have suffcent materals to present a counterargument. Fukushma: The fgures for agrcultural loans cted by Mr. Kozum refer to the part handled drectly by Nornchukn alone but do not nclude the parts handled by JA and JA Shnnoren. The entre amount of agrcultural loans provded by JA Bank s much bgger, whch I had not realzed untl I became nvolved wth agrcultural ssues. The press mght also be blamed for not reportng such nformaton extensvely, but I expect Nornchukn to advocate as well because t has the evdence to do so. Teruhko Kobayash Staff Reporter at Economc News Secton, Edtoral Bureau, Kyodo News Born n Tokyo. He s the chef reporter n the feld of agrcultural admnstraton. 18

4 Nkke Evaluatng Nornchukn KJI KUDA Koj kuda Staff Wrter at Economc News Department, Edtoral Bureau, Nkke, Inc. Born n ta Prefecture. He had been nvolved n the feld of fnancal affars untl March Currently, he serves as the chef reporter coverng the Mnstry of Health, Labour and Welfare. Yomur Shmbun HARUNA FUKUSHIMA Haruna Fukushma Staff Wrter at Economc News Department, The Yomur Shmbun Born n Ishkawa Prefecture. She s a reporter n the feld of agrcultural admnstraton. da: My vew s that Nornchukn has contrbuted fully to JA and JA Shnnoren by returnng the results of ts fund management to them. If poltcal crcles brng up the ssue of agrcultural loans, they should not have crtczed Nornchukn alone but rather look at the entre JA Bank. However, t s also true that the tme has come for Nornchukn to transform tself. It now confronts a bg ssue of how ts funds should be nvested as the nvestment envronment has become tough even wth ts globally dversfed nvestments. When t comes to transformng Nornchukn, t s necessary to consder how to transform JA Bank as a whole. I thnk t s necessary to reform the agrcultural admnstraton and fnance. Kobayash: Speakng of efforts to carry out such reforms, Nornchukn recently has promoted ts Food and Agrculture Busness and I am nterested n how ths move wll develop n the future. Nornchukn s ntatves to that end nclude holdng busness conventons and semnars for those who are nterested n nternatonal exports, and wth Nornchukn s commtment, I thnk t would provde an opportunty to demonstrate the strength of the JA Group as a whole. Consderng that the Natonal Federaton of Agrcultural Cooperatve Assocatons (JA Zen-Noh) focuses on exports, I thnk t would be nterestng f these efforts were actually shown wth concrete fgures. I heard that export-related fgures already have grown owng to Nornchukn s steady efforts to hold frequent busness conventons. Although ts current moves mght not provde nstant results, I would lke to keep an eye on how Nornchukn performs ts roles. Achevng strkngly successful results would change the stuaton surroundng t. Fukushma: Nornchukn s busness extenson to the feld surroundng agrculture, such as the Food and Agrculture Busness, shows a new phase n ts ntatves. The rato of agrcultural loans provded by Nornchukn alone mght be small, but consderng that JAs provde loans to small-scale farmers and that general regonal banks would not easly make loans to such farmers, you could say that the prmary role of JA Bank as a whole s fulflled. However, regonal banks, whch have strong connectons wth food processors and dstrbutors, also have been ncreasng ther agrcultural loans recently. To compete aganst those regonal banks, JA Bank must dsplay ts dstnctve character and advantages. That s the pont I am payng attenton to. kuda: As for ts Investment Busness, Nornchukn steadly has carred out globally dversfed nvestments, and ts newly started nfrastructure nvestment (alternatve nvestment) has reached almost 1 trllon yen, a move followed by other nsttutonal nvestors n Japan. Mr. (Norhro) Takahash (former Senor 19

5 Managng Drector of Nornchukn and former Presdent of JA Mtsu Leasng, Ltd.) prevously engaged n managng funds at Nornchukn and became the Presdent of GPIF because of Nornchukn s stable reputaton as an nsttutonal nvestor. Though Nornchukn executed a large-scale captal ncrease after the collapse of Lehman Brothers n 2008, t has snce contnued stable operatons to my dsappontment (laughs). f course, that s the way a fnancal nsttuton should be, though. da: Nornchukn has done well as a fnancal nsttuton to make t through the tmes when t suffered from bad loans and the 10 years followng the Global Fnancal Crss. I am concerned that Nornchukn does not seem to have set a clear new goal after achevng ts target of collectng JA savngs worth 100 trllon yen. I pay close attenton to how Nornchukn s addressng the severe operatng envronment, such as the contnuaton of extremely low nterest rates, the rsng cost of foregn currency fundng and other negatve factors for fund management, as well as the movement to realgn regonal banks to address the state of overbankng n Japan. n one hand, Nornchukn s a sold nsttutonal nvestor, but, on the other hand, t s asked to help solve agrcultural ssues n Japan. Nornchukn s ntatve to promote the Food and Agrculture Busness s excellent and nterestng, but to what extent can ths cover the agrcultural ssues? Although t mght be Nornchukn s unque frst step toward solvng agrcultural problems, gettng nvolved further n agrculture wll necesstate addressng, for example, the ssue of the labor shortage. How Can Nornchukn Address the Expectatons and Challenges Concernng the Agrculture n Japan? Kobayash: As has been ponted out, the ssue of agng farmers contnues to be rased, wth no solutons on the horzon. The key s how much agrculture can attract young people. Agrculture must become an attractve choce when young people thnk about ther career. If domestc agrcultural producton decreases, you cannot promote exports ether. To address such an ssue, I thnk t s necessary to stress the mportance of rasng the capacty of agrcultural producton. Fukushma: Agan, my worry s the labor shortage. Currently, the number of people startng to farm s on the rse. I, myself, have some agrcultural experence, such as growng corn and buckwheat and helpng farmers plant rce as actvtes of a gardenng club I 20

6 belonged to durng my student days. But the number of farmers remans nsuffcent. The realty s that the shortage s beng partally addressed by a growng dependence on techncal nterns from overseas. In terms of labor alone, there s doubt that Japanese agrculture can really be sustanable. Clearng such doubt s crtcal to ensure the sustanablty of Nornchukn. kuda: Solutons that can be provded by a fnancal nsttuton to address the ssues of agng farmers and the labor shortage nclude fnancng technologes to lessen the burden on agrcultural workers and reduce the need for labor. Because n Japan nformaton on such technologes tends to accumulate n Tokyo, t s advantageous for Nornchukn to have ts headquarters n Tokyo. Is the only way to beneft Japanese agrculture an ncrease n agrcultural loans drectly to farmers and agrcultural corporatons? I would thnk t better to take a broader vew of agrcultural loans and nclude loans to enttes, even f not agrcultural enttes, that help reduce the burden on farmers and/or ncrease agrcultural productvty. Kobayash: Nornchukn already has started the supply of rsk money n the form of captal contrbutons. I thnk Nornchukn should consder ncreasng such efforts f careful evaluaton shows that they generate good results. kuda: Though Nornchukn suffered a huge loss n the aftermath of the Global Fnancal Crss, t has snce nvested wth an upgraded revew. That s what I hear from fnancal nsttutons that sell nvestment products to Nornchukn. Some nsttutonal nvestors have forgotten such sufferng and become less strct about ther due dlgence n the past 10 years. However, Nornchukn s excellent n that t has mantaned that carefulness untl now. Lookng forward, t s currently tryng to focus on the bg trend movng from savngs to asset buldng, whle there are some challenges to be addressed ncludng the establshment of sales and other systems. da: Nornchukn has responded well to the changng busness envronment, as seen n the fact that t was the early adaptor of globally dversfed nvestments among Japanese fnancal nsttutons. To address future changes n the agrcultural and fnancal envronments at home and abroad, there s no doubt that Nornchukn must contnue to transform tself. Some of the varous topcs and ssues brought up n ths roundtable talk are also reported on page 23 and thereafter n ths report. Please read them as well. We would lke to extend our sncere grattude to the journalsts who provded ther honest comments, ncludng questons, crtcsms, expectatons and suggestons. VALUE REPRT 2018 Edtoral Team 21

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