Succession of Farming to Entrant Farmers Through Establishing Agricultural Corporations Involving Their Predecessors

Abstract

Shortage of successors in Japanese farm households raises awareness of the significance of succession of farming to non-family members, which as an alternative to conventional transfer to family heirs, is also expected to ease burdens for new entrants to farming. However, challenges have been pointed out as follows: first, a successor has to quickly acquire farm management skills during a relatively short time period; second, for the successor who has no farm-background, financial burdens to succeed the farm are significant; third, even if the successor is well equipped with management skills, financial bases, and other resources, whether he/she can successfully inherit faming is still uncertain for unexpected reasons. Given these challenges, incorporation for succession of farming to non-family successors has emerged as a solution. This paper provides an overview of this emerging farm succession arrangement, and its challenges and future prospects. To illuminate characteristics and challenges in the succession of farming through incorporation, this paper employs case studies of two young farm successors without farm-background. Major findings indicated that the succession of farming to non-family members through incorporation enabled the non-family successor, (1) to begin farming with larger assets including lands with less financial resources; (2) to inherit production skills, management know-hows, and sales channels from the predecessor effectively; (3) to establish readily trust and credibility in the community based on what the predecessor had developed; and (4) to secure income from farming and become fullfledged farmers. Meanwhile, challenges remain for this new succession arrangement, such as matching between potential successors and farmers seeking non-family successors for which supports by local government and communities are essential.