Permalink : http://hdl.handle.net/2115/63538

In May 2000, Japan reformed a subsidy system for dairy fanners which was established in 1965. In this system, raw milk prices had been artificially maintained to protect dairy farmers, and assure the stable supply of raw milk. The aim of this paper is to examine what effect this reform has on raw milk market and the joint sales organization which the Designated Associations (cooperatives of raw milk produsers) or "Shiteidantai" control. The results are as follows: 1) The reform of Dairy and Dairy Industry Policy has an impact on raw milk and dairy products market. In particular, Japanese dairy farmers are facing business difficulties (demand and supply imbalances, depressed prices). In opposition to that situation, the Designated Associations voluntarily have launched a campaign to reconstruct the joint sales organization, and display milk control function. The time has come for Japan to construct the Designated Cooperative nation-wide, in order to boost efficiency of the joint sales organization. 2) In Japan, about 60% of production is used to produce milk for drinking, while the remaining 40% of raw milk is processed into other dairy products such as butter, skim milk powder, and cheese. However, the demand of butter and skim milk powder shows a decrease. The Designated Associations diversified utilization of raw milk, in order to prevent market surpluses and consequent market and price instability. At present, there are new classifications of processed milk available on the market: cream, condensed skim milk, and condensed milk. Consequently, the rate of domestic self-sufficiency in dairy products would remain high, following an increase in demand for raw milk.