The Japanese dairy industry
conforms to production guidelines set by the government and
based on supply/demand data provided by the Agriculture &
Livestock Industry Corporation. In order to assure the stable
supply of raw milk, a subsidy system for dairy producers was
established in 1965. Since then, the government has set production
ceilings in order to prevent market surpluses and consequent
market and price instability.
Furthermore, to protect their
operations from demand and supply imbalances and depressed
prices, dairy producers voluntarily organized a planned production
system in 1979.
Since this system has no legal
binding power, some dairy farmers choose to operate outside
the planned production guidelines. However, these outside
operators account for only about 5% of total dairy producers,
a remarkable figure for a truly volunteer program.
Annual production allowances,
as determined by the Japan Dairy Council and based on demand
estimates, are allotted to bloc.
[Hokkaido, touhoku, kanto, toukai,hokuriku, kinki, tyugoku,
shikoku, kyusyu, that's 9 bloc]
In turn, the designate associations set production allowances
for individual agricultural cooperatives and dairy farmers
within the bloc. Allocation formulas vary among the different