Sustainable Agriculture, Fishery, and Forestry Industries and the Food and Agriculture Value Chain：Sustainability：The Norinchukin Bank

Increasing the Income of Farmers, Fishermen and Foresters

The Bank works on consulting activity for agriculture, fishery, and forestry (AFF) leaders who have encountered management issues, and we support the establishment of value chains by investing in and financing food- and agriculture-related companies.
Through consulting and other activities with the Bank's investment and finance clients, we set specific numerical targets for how to raise the incomes of AFF leaders and are actively working to achieve these targets.
We defined increase in the amount of value added as an indicator to capture income improvement of AFF leaders in a unified manner, and strive to achieve this goal after setting medium- and long-term target.
In this way, the Bank aims to make a sustainable contribution to improving incomes of AFF leaders.

Increasing Added Value

Efforts to Improve Incomes of AFF Leaders

The Bank is strengthening consulting activities for AFF leaders in cooperation with JA Shinnoren and Japan Agricultural Cooperatives (JA). In fiscal 2021 and fiscal 2022, we implemented this program with 186 and 301 consulting cases, respectively, and proposed solutions to solve various management issues faced by stakeholders. In addition, when consulting with stakeholders, we not only propose solutions, but also confirm the status of implementation, providing support to stakeholders in achieving solutions.

Topics

Supporting AFF Leaders by Proposing and Implementing Solutions

Our Chiba branch provided consulting services to our clients who are members of the Dōmeki Agricultural Cooperative Association. As part of these services, we interviewed managers and conducted financial evaluations, which led us to identify the following business problems: (1) the yields of the two varieties of table rice, fusaotome and fusakogane, the main products, are below the regional average and (2) there is a lack of other sources of income besides that from table rice, which means income and expenditure fluctuate widely depending on the prices of these two products. We provided the following solutions: (1) improve yields by having JA develop more suitable fertilizer designs and jointly conducting test cultivations with fertilizer manufacturers and (2) introduce new crops that promised more stable profitability, with JA providing financing. Implementing these two solutions resulted in an increase in net profits after tax of approximately 9 million yen in the following fiscal year. We will continue to monitor the progress and effectiveness of the action plans we formulated, as will our support of the Association in its efforts to increase agricultural incomes (i.e., increase added value).

Supporting Food and Agriculture-Related Companies to Establish Their Value Chains

As a policy of encouraging an increase in the income of farmers, fishermen and foresters, the Bank works to support the establishment of food and agriculture value chains through investments and loans to food and agriculture-related companies.

Topics

Establishing New Value Chains that Utilize Local Products

Yukō Co., Ltd., is the company behind Akita Prefecture’s Kurakichi confectionery brand and handles all the stages of production from primary to tertiary processing. The company’s strength has always been in its sales channels through department stores in the Tokyo metropolitan area for its high-end products; however, there was a problem in that it had a limited product lineup, which was due to raw materials being mainly purchased from a small number of farmers in its home prefecture.
To address this, we coordinated a partnership between the company and JA Zen-Noh Akita in order to build an integrated value chain from sourcing to sales.
We also provided financing to support the company’s development of new products using raw materials from Akita Prefecture. This led to all Kurakichi outlets carrying new products made using Hokugen no Momo or “Northern Peaches,” which are grown by members of JA Kazuno (Kazuno City, Akita Prefecture).
We will continue to help maintain the agricultural production base and increase producer incomes by building new food and agriculture value chains that connect producers, manufacturers, and consumers.

Supporting the Establishment of Japanese Food and Agriculture Value Chains Through Investments in Overseas Food and Agriculture Private Equity (PE) Funds

The Bank has invested in an overseas food and agriculture PE fund that invests globally in ventures and medium-sized companies possessing smart technology and decarbonization solutions for the food, agriculture, and fishery industries.

The portfolio of investments includes the following types of companies with advanced technologies in the agriculture, fishery and forestry industries. The Bank supports these technological innovations and social implementation, and pursues the application of these technologies in the Japanese food, agriculture, and fisheries industries in the shift towards decarbonization.

Main technologies supported by the Overseas Food and Agriculture PE Funds

Regenerative farming practices, such as water conservation and soil improvement
Feed additives that reduce methane gas emitted from cattle burps and excrement
Alternative proteins
Freshness preservation technology for fruits and vegetables (food loss reduction, etc.)
GHG fixation on agricultural land

Contributing towards solutions to sustainability issues through the F&A Growth Industrialization Investment Framework

In order to increase the added value and productivity of the agriculture, fishery, and forestry industries, the Norinchukin Bank Group established the F&A Growth Industrialization Investment Framework with the aim of collaborating with industry members and businesses both within Japan and overseas, providing recipients with risk capital to support these activities. By investing in this framework, we are contributing towards solving sustainability issues surrounding the agriculture, fishery, and forestry industries.

Reduction of food waste through the widespread use of food dehydration and sterilization equipment

One of our group companies, The Agribusiness Investment & Consultation Co., Ltd, invested in ASTRA FOOD PLAN Co., Ltd., a company engaged in the development and marketing of food dehydration and sterilization equipment, with its aim being the creation of a sustainable society.
The company uses its proprietary superheated steam technology (patents pending) in a food dehydration and sterilization device called a superheated steaming machine. The machine is used to upcycle food residuals from food manufacturing processes and also off-specification agricultural produce into added-value foodstuffs and ingredients by processing them into vegetable powders that have been dehydrated and sterilized without sacrificing flavor.
Our Bank Group is committed to contributing to reducing food waste and the sustainable development of the Japanese agriculture, forestry, fishery, and food industries by supporting the company through our network of affiliated organizations and other businesses to develop its technology and expand its sales channels.

Expanding Sales and Promoting the Areas Producing Organically Grown Sweet Potatoes and Hoshiimo Both in Japan and Overseas

Agribusiness Investment & Consultation Co., Ltd. also invested in Japan Future Agri Corporation, a company that handles agricultural products over the entire process from production to sales, with a focus on the cultivation of organic sweet potatoes and the production and sale of dried steamed sweet potatoes, hoshiimo.
The company grows organic sweet potatoes on an area of approximately 50 hectares, steams and dries them in its own factory to create hoshiimo, and then sells them.
With demand for sweet potatoes as a healthy food growing not only in Japan but also in Asia and the U.S., the company is further strengthening its sweet potato exports, and it is also leveraging its sales network to encourage exports of other Japanese agricultural products and processed agricultural products in general.
In addition, it is expanding its own farms to increase its supply capacity and improving cooperation with partner farmers and local government agencies to contribute to the expansion of organic produce production as outlined in the MIDORI Strategy for Sustainable Food Systems. By supporting the businesses we are engaged in through our network of affiliated organizations, our Bank Group will contribute to the sustainable development of the Japanese agriculture, forestry, fishery, and food industries and to resolving environmental and social challenges, thereby promoting sustainable management, including the fulfillment of the SDGs.

Contributing to a sustainable food supply

Promoting food waste reduction

The reduction of food waste*¹ is one of the challenges in building a sustainable food system. Here, the Bank started a collaborative project leveraging the NTT Group's knowledge and solutions and the Bank's network and capabilities to support efforts to reduce food loss among the Bank’s onvestees and borrowers and our members. Through this collaboration, some JA installed the ecobuy *² project, a food loss reduction support service for retail stores provided by NTT Communications Corporation.

*1 Amount of food waste generated by the entire food industry (FY2020): 16,236,000 tons (Annual Amount of Food waste Generated in FY2020 and Recycling Rate of Recycled Food Resources (Estimated), Ministry of Agriculture, Forestry and Fisheries)
*2 ecobuy: A system whereby customers can accumulate ecobuy points by purchasing ecobuy-eligible foods that are close to the expiration date. Participants apply for ecobuy points by photographing purchase receipts via the ecobuy application on their smartphones.

In August 2022, the Bank concluded a green loan agreement with NTT Group for the use of funds for projects such as 5G-related investments, data centers that achieve high efficiency and power savings, and renewable energy.

Effective use of local resources

Ogawa & Co., Ltd., (the “Company") is engaged in efforts to contribute to the effective utilization of agricultural products produced in Okayama Prefecture and efforts to revitalize the local community. The Bank initiated a collaboration between the Company and the Okayama Headquarters of the National Federation of Agricultural Co-operative Associations.
Through the use of peach blossoms harvested during the peach production process, the Company created a fragrance using Okayama Peach Blossoms, leveraging this renowned local product from Okayama Prefecture.