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Tuesday, June 23, 2009

Farm consultant cultivates seeds of opportunity


Staff writer

The ranks of farmers, crop acreage and yields are all shrinking and Japan's food self-sufficiency rate remains one of the lowest among major developed nations.

News photo
Fruits of labor: Makoto Suzuki, CEO of Naturalart Inc., shows some of his company's wares at a retail outlet in Tokyo. YOSHIAKI MIURA PHOTO

Makoto Suzuki, 43, however, senses business opportunities in the shrinking industry.

The former banker says his "portfolio strategy" will be key to reviving the sector.

The chief executive officer of Tokyo-based Naturalart Inc. leases farmland nationwide and grows crops while giving other farmers business advice.

According to Suzuki, an agricultural company can generate profits if it mitigates losses from climate fluctuations by growing crops and raising poultry on a large-scale basis year-round and nationwide.

His company grows dozens of different crops, including strawberries, lettuce and potatoes, on around 100 hectares in 11 locations in Aomori, Akita, Miyagi, Nagano and Yamaguchi prefectures.

Naturalart posted ¥8.7 billion in sales in the last business year.

"If we did not diversify our investments, our management would never become stable," Suzuki said in a recent interview with The Japan Times.

Born in Aomori Prefecture, Suzuki had never been engaged in agriculture, but he knew plenty of the local farmers and was thus familiar with the business.

During his 10-year stint at a major trust bank, Suzuki was in charge of financing and investing in new venture businesses. This fostered an interest in entrepreneurship.

"Once a (new) business runs smoothly, employment, sales and profits are all being generated," he said. "I was really amazed by (how entrepreneurs) created something out of nothing" instead of clinging to corporate establishments.

Suzuki felt agriculture also offered this creative outlet, for instance in the natural wonder of flowers and fruits growing from seeds.

As a Keio Business School student, he believed farming was an industry ripe for creative power.

Suzuki first learned to his surprise that the nation's agricultural industry lacked a business model. He said farmers often dislike business management and avoid learning about financing and product marketing theories. Instead, they have entrusted agricultural cooperatives to handle the business end.

Many farmers have run up mounting debts and some have even gone bankrupt, he said.

"I have known a lot of people who could not make a living even though they were doing jobs they liked," he said. "I thought that was strange."

Suzuki found that farmers lacked business management savvy and there were few companies available to help them and engage in farming.

This prompted him to launch Naturalart in 2003.

Because the sale and purchase of farmland is tightly restricted by law, Suzuki leases croplands from owners and takes over the managerial rights of bankrupt farmers.

Suzuki said his portfolio strategy is extremely rare because most farmers live on the land they cultivate.

"Generally in Japan, it is regarded as undesirable for people to step out and do something other than the norm," he said. "But that notion is irrelevant to us."

As an agricultural consultancy, Suzuki's company supports farmers by offering advice on business management, helping them open up sales channels and just listening to their complaints.

"Individual farmers do not have someone to consult with. They are extremely solitary people," Suzuki said. "So it's important (for consultants) to listen to them."

He also said agricultural co-ops are supposed to support farmers, but instead they have become creditors and demand quick repayment. Thus he sensed an opportunity in offering consultation services.

"Many odd things" happen in agriculture, he said. "That is why there is a business chance."

Suzuki plans to launch an Internet site for farmers possibly this summer featuring advice on agriculture, including cultivation techniques.

Because many farmers are going bust, he also wants to launch an agriculture resuscitation fund in the next few months to revive the industry.

Suzuki hopes to continue energizing farmers. He said their revenues need to be higher and what they lack now is the power to set their product prices, he said.

By launching a grand coalition of farmers, Suzuki believes they, instead of major distributors, can have more say on prices.

Networking will enable farmers to make more profits, become energized and further develop their industry, he said.

"What we are aiming for is to launch Japan's largest farmers' group. If we get together, we can negotiate over prices and fight against distributors."

In this occasional series, we interview entrepreneurs whose spirit may hold the key to a more competitive Japan.

Makoto Suzuki's career highlights

1988 — Joins the former Toyo Trust and Banking and works there for the next 10 years.

1997 — Leaves Toyo Trust.

1998 — Gains a place at the Keio Business School.

2003 — Establishes Naturalart, a company that produces and sells agricultural products and provides farmers with business consultations.



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