Permalink : http://hdl.handle.net/2115/68759

The purpose of this paper is to analyze the market performance of the raw milk distribution structure in Hokkaido under the system of designated raw milk producer organizations and to project the future potential of distribution. The joint sales of agricultural cooperatives, having a high market share under this system, are leading to a rise in efficiency with collecting, shipping, supply-demand balance management, and business negotiations. In contrast, it is not to be denied that the uniform distribution system has impeded raw milk differentiation and regional branding for value-added milk products. Although a series of regulation reforms in recent years has partially solved the above problems with the distribution system, large-scale raw milk producers have not sufficiently enjoyed benefits from the reform. Several large dairy farmers in Hokkaido have recently seceded from the existing joint sales under the current system, which is generally called a transition to outsider, and have turned to selling raw milk to special brokers. The growth of brokers can be accounted for by a strong preference among dairy farmers for high farm milk prices, reflecting a dairy crisis, and a difficult supply situation of raw milk for small milk processors due to supply-demand tightness. A further rise in the outsiders’ market share is likely to lead to a revision of the requirement for dairy subsidies, substantial abolishment of the designated organizations system and, moreover, an end to the Japanese raw milk production quota system.