This paper clarifies the characteristics of livestock insurance for dairy farming in Japan and discusses issues that can be improved to make it a better risk management method by comparing it with systems in South Korea and Denmark.

Risks in economic activities can be classified based on a risk map that has axes for evaluating loss intensity and the frequency of occurrence. According to the principles of equal income and expenditure, and that of counter-benefits, insurance is an appropriate risk management method when the risks have high loss intensity and low frequency of occurrence. Under the principles of equalization of income and expenditure, and of individual equivalence, insurance is an appropriate risk management method when the risks have high loss intensity and low frequency of occurrence because subscribers have an upper limit on premium payments.

Insurance in the livestock sector in Japan started before World War II and supported the development of the livestock industry. The insurance only covered livestock fatalities. However, the insurance scheme transformed to fulfill the policy goals of increasing food production and stabilize farm management in rural areas after the war.

After the war dairy farming production continued to expand and simulation analysis revealed that even though large and small dairy farms may have the same accident percentage, large dairy farms have fatal accidents every year. It showed that insurance is appropriate for small dairy farms, but not large ones because the intensity of damage of one fatal accident a year is not as serious for large dairy farms. For large-scale dairy farms in Japan under the current system, insurance is not the best risk management method. However, almost every dairy farmer receives a mutual aid subsidy from the government every year. The amount is almost double the insurance premium they pay. The current livestock mutual aid system is no longer economically sustainable without enormous spending by the government.

Livestock insurance in Denmark is sold by several private companies, and the deductible increases by the number of claims filed. Accidents that are high in frequency but low in severity are not covered by insurance payments, and only fatalities that are high loss intensity and infrequent occurrences are included. Veterinary medical expenses and medications for illness are not covered by insurance. As a result, dairy farmers have to focus on accident prevention.

In South Korea, a private company provides livestock insurance, although there is a state subsidy. For this reason, fatal accidents of a small number of dairy cows, which occur frequently, are covered by insurance like in Japan. There is no subsidy for veterinary medical expenses so medical expenses related to illness are not covered by insurance as in Denmark.

In Denmark, the system only covers risks that should be insured. If we look at livestock mutual relief as a method of risk management for dairy farmers, we should identify risks that are in line with the risk management process, evaluate each risk, and select the appropriate methods to mitigate that risk. Livestock mutual relief targeted at dairy farming should be limited to low frequency, high-intensity accidents like multiple fatalities in a short period of time. Expenses related to the death of one cow should be considered a cost of dairy farming

This study quantitatively determines what aspects of farmers’ markets agricultural producers feel either hopeful or concerned about when making decisions about shipping. It does so by performing a comparative evaluation of shipping and non-shipping producers. An initial questionnaire was distributed to shippers and non-shippers before the establishment of a farmers’ market, and the responses were compared by means of a second questionnaire on shipping circumstances that was sent to participants after the establishment of the farmers’ market.

A choice experiment was implemented before the establishment of the farmers’ market. We verified whether there were any differences in willingness to pay for the services provided by the farmers’ market between those who actually shipped to the market and those who did not. At this time, a price was not necessarily set with respect to the services offered by the farmers’ market, and the values of the services provided were converted and evaluated based on commission rates. This was done while keeping in mind that the quantity of shippers to the farmers’ market would be determined by the commission rate. Next, we conducted an interview survey after the establishment of the farmers’ market in order to understand actual conditions. The object of the study was “Farmers’ market A” in Mie Prefecture, which was possible to survey prior to its establishment.

From the choice experiment, we learned that the “purchase of unsold products” was highly evaluated as a farmers’ market service. For non-shipping producers, the information that “agricultural and technical guidance will be provided” led them to refrain from shipping to the market. The results of the interview survey revealed that, prior to the establishment of the farmers’ market, some shippers assumed that the shipping standards of the farmers’ market would be strict based on the information that “agricultural and technical guidance will be provided,” a fact that can be interpreted as creating a negative image of the service. However, it was also true that producers who held concerns about shipping all accepted agricultural and technical guidance services from Farmers’ market A after they shipped products.

Through the analysis of these actual conditions, the meaning of the information that “agricultural and technical guidance will be provided” can be evaluated in a multifaceted way, indicating concerns about its effectiveness and the possibility that such guidance may sometimes become a factor in the suspension of shipments to farmers’ markets. It also indicates that mechanisms to overcome psychological problems are necessary to encourage small farmers, who play an important role during between-crop seasons, to ship to farmers’ markets.

This paper elucidates some of the conditions necessary to build a collaborative relationship between an farm business enterprise and a community located in same area by examining the community’s evolving perspectives toward the enterprise. In this case, the enterprise is one which has launched a rice farming business in a mountainous area.

A collaboration between enterprises and the community that enhances collective activity is indispensable for making a rice farming business proceed smoothly and efficiently. Because rice farming has historically depended on collective activities to maintain regional resources - like irrigation facilities, roads and reservoirs - perpetuating this community-level contribution to agriculture is vital.

It is difficult for individual farmers to maintain regional resources in mountainous areas due to inefficiencies created by small landholdings, such as travel time between fields. Farmers have overcome these difficulties by means of collective action, and it would be critical for incoming enterprises to gain acceptance by the community in order to benefit from collective activities.

When an enterprise comes to a rice-growing area to launch a rice farming business, the community members evaluate the enterprise to determine if its activities would fairly contribute to pre-existing rice farming. The nature of this evaluation by the community can become a basis for negotiation and future collaboration. Unsurprisingly, a community might be anxious about intrusion into traditional farming practices by an entity that has a decidedly different operational rationality. And yet, when weighed against other alternatives for perpetuating the local resource base, communities may welcome an entity that can preserve local rice farming. As many farm communities suffering from aging and a decline in number of farmers, communities are struggling to reimagine their livelihoods. Solving this often includes the recruitment of new farmers or farm enterprises from outside the community.

Even with the shared objective of maintaining rice farming in the community, it is not always easy for enterprises and communities to collaborate with each other. Newcomer enterprises may have different work cultures and principles of behavior that may clash with local rationalities. Given these conditions, this study clarifies how a community can interact with an incoming enterprise by integrating it into the communal resource base and appraising its future capacity for absorbing local labor.

The result of this study can be summarized in four conclusions. First, a community carefully evaluates the function of the incoming farm enterprises. Second, individual community members carry out their own evaluation in light of their perspectives on farming. Third, structural changes in regional agriculture help shape a community’s evaluation. Finally, challenges emerge when enterprises create incentives that encourage farmer retirement, which undermines the collective capacity for resource management. In other words, enterprises have the best chance of preventing an overall decline in rice farming by designing their businesses in a manner that respects and encourages the continuation of collective activities in the community.