Rice Sales by Farmers, Individually and in Groups: A Survey of Farmers Engaging in Direct Sales via the Internet

概要

1) Background and Objectives
1.1 Legislation and Government Support
The purpose of this study is to clarify the circumstances of the formation of individuals and groups among rice farmers who are engaged in direct sales of rice to consumers through the Internet (hereafter Internet Direct Sales, IDS). A summary of Japanese government policy developments concerning rice is first necessary in order to understand the essential background of the research object.

In 1995, the Foodstuff Control Act (Shokuryou Kanri Hou: 食糧管理法) was abolished. A new law replacing it came into force in 1994: the Law for Stabilization of Supply-Demand and Price of Staple Food (Shuyou Shokuryou No Jukyu Oyobi Kakaku No Antei Ni Kansuru Houritsu, known as Kyuu Shokuryou Hou: 主要食糧の需給及び価格の安定に関する法律, 通称 旧食糧法; hereafter the Staple Food Act). Under the Staple Food Act, the national distribution network for rice was categorised into two types under government control: institutionally marketed rice (Keikaku Ryuutsuu Mai: 計画流通米; hereafter IMR) and freely marketed rice (Keikakugai Ryuutsuu Mai: 計画外流通米; hereafter FMR).

However, in response to a decrease in the OMR/IMR share of total rice production (Table 1), the Staple Food Act was revised in 2004 (Kaisei Shokuryou Hou: 改正食糧法), and the OMR/IMR system was virtually abolished1. Since 2018, the government has played no part in rice production adjustment. The government will continue to announce the supply and demand outlook for rice but this is not a legally binding system, merely information, and there will be no more direct government subsidies, which was one of the merits of complying with rice production adjustments. Therefore, some impact on the sales strategies of farmers is expected2. Especially in recent years, rice farmers have attempted to improve their profitability by devising sales channels for rice, the price of which has reached a plateau.

1.2 Social Trends: Influence of the Internet
During the development and reorganization of the system for distributing rice over the last two decades, the Internet has become popular with the general public, and the e-commerce market for agricultural products (hereafter “eC market”) has grown3. According to the Minitry of Economy, Trade and Industry (2019, p.49), the eC market size for food, beverages, and alcoholic beverages as of 2018 was 1,691.9 billion yen, but the eC conversion rate has remained at about 2.64%. Nevertheless, continuous expansion of the eC market is expected because the number of people using the convenience of the Internet is likely to grow with the increase in double-income households. Especially for rice sales, as reported by the Japan Co-operative Alliance (2019), the following three answers are listed as the top reasons for using online sales to purchase rice: 1) “No need to carry heavy rice” (82.4%); 2) “Because you can choose various types of rice” (33.0%); and 3) “Because you can purchase rice of various prices” (29.9%). The same research also clarifies the online sales platforms that have been used to purchase rice. Rakuten Market (楽天市場) is the most popular (49.0%), followed by Yahoo! Japan (22.6%) and Amazon Japan (21.8%). This shows that many consumers use major online sales platforms rather than individual on-line “Rice farm shops” (3.8%), which as a category were ranked ninth overall as of 2018. Thus, it is important to have an overview of the sales strategies of farmers who are selling their rice directly online using their own individual website (hereafter “farm web site”) and to grasp the trends of suppliers.

1.3 Sales of Rice by Groups and Individuals
An underlying theoretical framework was proposed by Kanazawa (1982, p.270-272). From the dual structure theory of agricultural management, agricultural production activities are central, accompanied by technical management aspects and private economic aspects. Farmers are regarded as willing to collaborate in production and sales, but try to be independent in terms of personal management. Nevertheless, as Takahashi (2014) pointed out, this applies only to rice farming management prior to the 1980s and did not involve the agricultural market, which drastically changed between 1990 and 2010. Thus, channels for sales in recent years require a fresh analysis, particularly with regard to IDS.

Therefore, the present paper analyses an overview of rice farm management by those who have engaged in IDS under the circumstance that the social environment of rice farmers has changed significantly due to the recent reorganization of rice sales and distribution. Group collaboration concerning the relatively new sales channel (IDS) is discussed from the point of view of current and future issues arising from the formation of individual sales and sales by groups of rice farmers engaged in IDS. According to Oxford English Dictionary, ʻgroupʼ means a number of people who work together or share certain beliefs. In this study, a group is defined in two situations: as a number of farmers based on local community for collaboration in production and sales, or as a number of regular customers served by a farmer who is selling rice by IDS.

2) Previous Studies
Sugiyama et al. (2001) stated that forging trusting relationships with consumers is the most critical factor for farmers when working on IDS of agricultural products. They also highlighted the significance of acquiring information about the Internet user experience and the extent of support from JA and local governments. Saito and Hiraizumi (2003) explained that insufficient product differentiation and inappropriate presentation of information, deviating from consumer needs, coincided with the poor performance of IDS. Yoshioka (2004) found that difficulties in finding information on the Internet hinder stabilization of IDS and require farmers to improve their efforts to resolve these difficulties. However, he drew attention to the fact that interactions amongst consumers and farmers can be promoted through this sales medium. In summary, several studies were conducted in the first half of the 2000s4, and since then there have been many papers on the activities of farmers using IDS or issues concerning the technique of IDS.