Maintaining Agricultural Production by Building Local Distribution Systems in the Northern Area of Japan

In the field of vegetable farming, it has become a common approach for farmers to advance into the secondary and tertiary industries to increase their income, an initiative known as the sixth industrialization. Under these circumstances, a growing trend is to outsource a part of the sixth industrialization activities in order to improve consumer satisfaction, strengthen market competitiveness, and avoid investment risks. However, owing to a mismatch between farmers and processors, there are few cases that result in collaboration. Under such circumstances, a new distribution channel called local distribution systems have been born, and its importance is increasing in Japan. This paper demonstrates how a local distribution system for farmers living in rural areas could address this distortion. The concept of local distribution systems has been used since the 1990s, and yet, its significance and importance are still increasing in relevancy in today’s Japanese agriculture. In this study, the subject is an intermediary (Company A) that originated from farmers, so it was able to understand the behavioral principles of farmers and to identify businesses that could not be covered by the management resources of farmers themselves. Through the entrustment of the business, company A could support the production and sales activities of the farmers. The following conclusions were drawn: (1) the company does not directly involve members in the decision-making of sales methods but instead provides a number of options for decision-making, and (2) the needs on the production side will match those on the consumer side and play the role of communication. By building such a collaboration system, the company succeeded in establishing a local distribution system. In the distribution of vegetables, which is characterized as perishable items, it is essential to pursue efficiency and rationality through a wholesale market system to distribute the products from producers to a large number of consumers. However, constraints in the wholes system limit the extent to which this local distribution functions. This paper demonstrates how a local distribution system for farmers living in rural areas could address this distortion. The concept of local distribution systems has been used since the 1990s, yet its significance and importance are still increasing in relevancy in today’s Japanese agriculture.