The Process of Development in the Agar Industry

the 'Regional Regulation' Perspective

Abstract

The author analyzes the historical change of agar's production area via a framework of study based on 'regional regulation (régulation régionale)'. This study deals with the development of Gifu and Shinshu agar's production areas by paying attention to the outbreak and collapse of local regulation mechanisms. The mode of regulation of the production areas that adheres to a structure of 'nestedness' in space is determined while mingling together with the coordination in spatial scale (global/national/regional/local and so on). However, the greatest impact on sustaining stable regimes of economic management (régimes économiques de fonctionnement) in production areas operates at the local level, since competition among industrial areas is coordinated by local institutional devices (dispositifs institutionnels).
The competition in Gifu agar's production area is coordinated by 'domestic industrial coordination (coordination domestique)'. This is a mechanism coordinated by negotiation among firms and wholesale dealers concerning decisions on quality and prices. In Shinshu agar's area, in terms of price, it is coordinated by 'civil coordination (coordination civique)', which is characterized by a 'convention' determined by the enterprise union. In addition, this form is understood as coordination beyond the pursuit of individual profits through the sharing of common interests. On the other hand, in terms of quality, competition was coordinated by 'industrial coordination (coordination dite industrielle)', which is accomplished by the coordination of national standards. In this mechanism, competition was coordinated and stimulates the development of the production area by the induction of local industrial devices.
In the meantime, there was great concern that agar's production area would decline because of an overseas production shift, competition, changes in the norms of consumption, decline in agricultural production, and the reluctance of agriculture to maintain business among young farmers.
These global and national changes made the mode of local regulation extremely unstable. Strictly speaking, the most significant component of this decline was destined to be in the form of the coordination of each production area, so that the crisis arose in the face of environmental change at the global and national levels.
In the case of the 'domestic coordination' of Gifu agar's production area, it was possible for the firms to keep their production stable. However, these firms have many problems such as the subordination to wholesale dealers, a lower rate of profit and the temporary business of the farmers. The existing crisis in this form was revealed in terms of decreases in income and the depletion of successors caused by the national decline of agriculture.
Considering Shinshu agar's production area, the quality of agar was controlled by 'industrial coordination', but its demand diminished. This change was brought about by the lack of a concern and convention for quality. Therefore, each firm was unable to cope with changes in the norms of consumption, or competition in production.
However, the coordination forms in this critical period began to change by struggling to grope for a new form of coordination, especially in the case of innovative firms.
In Gifu agar's production area, the firms have changed their production term into a year, and have specialized agar's production to enlarge business. In Shinshu agar's area, firms have successfully coped with the crisis by setting up more innovative operations and by making use of the large customer network. Thus, the agar's production areas are coordinated by each local institution. Faced with losing the validity of existing coordinations, they transformed their system to revive their production.