The Japan Agricultural Cooperative (JA) of Tomisato city stagnated in terms of profitability during 1990s due to a relaxation of regulations on mass retailers. To strengthen their sales competitiveness, JA Tomisato city started expanding its business relationship with processors, consumer cooperatives and restaurants around 2005. In 2008, it established Seven Farm Tomisato Co., Ltd. in cooperation with an individual farm and Ito-Yokado Co., Ltd, which is one of the biggest Japanese supermarket chains. The ratio of capital contribution in Seven Farm Tomisato was 79%, 1%, 10% and 10% for the farm owner, the spouse, JA Tomisato city, and Ito-Yokado Co., Ltd., respectively. Although the capital contribution by the retail giant was not big, the farmers and JA Tomisato city expected that the joint venture would lead to expanded sales and strengthened ties with retailers, and that the farm entry by the retail giant would provide benefits for farm land conservation. JA Tomisato city highly valued the participation of Ito-Yokado members in field work, because as they experienced field work, Ito-Yokado members came to understand field conditions and the labor intensity behind growing vegetables. Such experiences, I believe, would be vital for pricing vegetables at the shops. On the other hand, Ito-Yokado, through farm entry, benefited from a sustainable agricultural system that used compost made from vegetable debris and food residue that came from the shops it owned.
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