Institutional design of irrigation and rural development projects and management in Japan

Transcription

1 Institutional design of irrigation and rural development projects and management in Japan 20 February 2013 Kazumi Yamaoka Japan International Research Center for Agricultural Sciences (JIRCAS)

2 Table of Contents 1. Introduction P2 2. Purposes of the Land Improvement Act P4 3. Fundamental Principles of the Land Improvement Act System P5 4. Implementation Bodies of Land Improvement Projects P6 5. Implementation Procedures of Land Improvement Projects P7 6. Eligible Project Participants P8 7. Bearing of Costs P9 8. Replotting System P10 9. Land Improvement Districts P Flow Chart for the Organizational Structure of the Land Improvement District P Financial Conditions of Land Improvement Districts P Management of Land Improvement Facilities P Federations of Land Improvement Associations P Reference P16 Note: This document is originally compiled by the Ministry of Agriculture, Forestry and Fisheries, Japan and carefully proofread and properly modified by author for better expression in English so that the responsibility for the wording lies with the author. 1

3 1. Introduction (1) In Japanese agriculture, farm management has been developed with its major part on paddy rice cultivation. The maintenance and management of irrigation and drainage facilities is essential for this paddy rice cultivation and is conducted by a water management organization (Land Improvement District), which is formed by farmers who are engaged in farm management. This is a legal system. This Japanese agricultural water management system, which emerged in rice farming to adapt itself to the Japanese climate, has been developed as a discipline of water management by villages since over 2000 years of history back, and may be considered to be difficult to apply it immediately to countries with different climatic, geographical, social and economic conditions. Nevertheless, for your references in conducting studies on good maintenance and management of irrigation and drainage facilities, we will introduce the overview of the system of Japan s water management organizations. (2) Japan s irrigation and drainage water management is efficiently conducted by groups called Land Improvement Districts, which are organized by local farmers, of which organization is depending on types and scales of facilities or local conditions. This water management system has achieved unique development adapting to Japan s climatic, political, socio-economic and other conditions, in many forms of type and scale of facilities, and varying according to regions and periods. We will briefly look back on these historical transitions below: 1 From around the 3rd century B.C. to the 8th century A.D. Paddy rice cropping spread throughout Japan, mainly in regions that can easily secure irrigation water, and as necessary irrigation facilities for that, numerous simple irrigation canals and small-scale irrigation ponds were built. The sovereign such as the Imperial Court and local rulers in this period made use of technique for building their burial mounds in constructing dams of irrigation ponds. Water management was conducted as an execution of sovereignty in many cases. 2 From around the 9th century to the 15th century 2

4 Paddy fields were expanded targeting upper streams of branches of large rivers, and small rivers in the latter part of the Medieval Period. Irrigation water facilities were built by village farmers themselves with technical assistance from engineers who are monks or samurais in some case. Water management by villages, the original form of the water management discipline at the terminal level of the irrigation facilities, which currently exists, was formed. 3 From around the 16th century to the 19th century. Development was expanded to large river basins, and the territory of current 2.6 million ha of Japan s s was formed in this period. With population growth, the scales of villages became larger, and organizations to implement water management discipline were formed. These water management discipline (system) and characteristics were succeeded by local farmers water management groups/organizations, which were established under a law in the 20th century (1908) for the first time. Furthermore, this system is also succeeded by the Land Improvement District, which has been legislated since 1949 when the Land Improvement Law was enacted. 4 The 20th century a. Drainage improvement project b. Due to the trend of overproduction of rice, improvement of irrigation facilities is actively expanded from a -centered one to upland fields. As seen above, in Japan, throughout its long history, a consensus building system puts its basis on the consensus of a village, which is necessary to manage irrigation and drainage facilities and to secure agricultural water, has been formed and established. The Land Improvement Act, which was enacted in 1949, have officially designated this water management organization that had been composed by farmers and formed in rural areas, as a Land Improvement District. 3

5 2. Purposes of the Land Improvement Act In order to increase agricultural productivity, improve the structure of agricultural production and provision by enlarging the scale of farm management and introducing large machinery, etc., it is indispensable to improve the agricultural production infrastructure. Outcome of the improvement of agricultural production infrastructure affects each individual farm management, farmland rights and water use of farmers. The Land Improvement Act stipulates the procedures for coordinating these rights and so on and implementing land improvement projects appropriately and smoothly. Structure of the current Land Improvement Act (Purposes) (Measure) (Means) (Concrete contents) Improvement of agricultural productivity Increase in gross agricultural production Optional enlargement of agricultural production Agricultural structure improvement Give consideration to harmony with the environment. Contribute to the comprehensive development and preservation of national land resources. Fit into the development of the national economy. (Matters for consideration) Improvement and development of the agricultural production infrastructure Matters necessary to appropriately and smoothly implement the projects related to improvement, development, preservation and collectivization of scattered agricultural land plots 1. Long-range planning for land improvement 2. Land improvement projects 1 Installation and management of agricultural irrigation and drainage facilities, agricultural roads, etc. 2 Land readjustment 3 Development of agricultural land 4 Land reclamation from the sea and marsh 5 Others Implementing bodies: state, prefectures, organizations (Land Improvement Districts, municipalities, agricultural cooperatives, etc.) (1) Project implementation procedures Commencement procedure Change and abolition of plans Cost procedure (2) Replotting procedure Collectivization of scattered agricultural land plots, designation of non-agricultural land areas (3) Management of the facilities (4) Coordination of the rights related to agricultural land 3. Operation, establishment and management of land improvement districts 4. Exchange and consolidation 5. Federations of Land Improvement Associations 6. Government subsidies 7. Supervision, etc. 4

6 3. Fundamental Principles of the Land Improvement Act System (1) Principles of proposal (application) and approval from beneficiary farmers Land improvement projects are the social capital formation through public investments. However, because of their effects on agricultural land use, etc., which is farmers private property, as well as cost bearing by farmers, land improvement projects should be implemented based on the uniformed proposal (application) of at least 15 initiators among beneficiary farmers with their approval as their basic requirements, as a rule. If a consensus is not built among the farmers concerned on the implementation of a project, the project cannot be implemented. (2) Compulsory two-thirds agreement among the beneficiary farmers The land improvement project needs to incorporate lands as a whole within a specified territory into the beneficiary area of the project according to topography, and therefore, firm agreements from two-thirds or more of whole eligible beneficial farmers in the designated territory of the project is required to implement it. Otherwise the procedures cannot be forwarded. Once the firm two-third or more agreements are obtained, the project will be executed in a legally enforceable way. It means that all the eligible beneficial farmers in the territory of a project must participate in the project and be burdened with a responsibility. In the actual operation, the project is implemented with a higher percentage of approval. Exceptions to the principle of approval: facilities renewal project Of facilities renewal projects (projects to reequip existing facilities at the end of their service life), the approval collection procedure of the ones that meet the following requirements is simplified due to its homogeneity with management projects. 1 The project s aim must be to maintain the function of the facility. 2 The project must not require changes in important parts of the plan for the management project related to the said facility. 3 The total amount of the costs borne by members for the facility renewal project and management project after the renewal must be appropriate considering the cost bearing for the management project in the case of not conducting the renewal project. Percentage of approval for land consolidation projects (at the commencement of projects) 100% 56 districts (62.2%) 93% or more and less than 97% 15 districts (16.7%) 97% or more and less than 100% 19 districts (21.1%) Note 1: This is the breakdown of the 90 districts that adopted new projects in FY Note 2: There are no districts with less than 93% approval. With the people who had not approved the project at its commencement, a consensus was formed under discussion among the rightful claimants concerned by the replotting stage after construction work, and the paperwork has been completed smoothly. 5

7 4. Implementing Bodies of Land Improvement Projects Land improvement projects are implemented by the following entities in consideration of the scale, degree of technical difficulty, etc. of each project. 1 State-operated: national government 2 Prefecture-operated: prefectural governments 3 Organization-operated: land improvement districts, municipal governments, land improvement associations, agricultural cooperatives, agricultural land holding rationalization corporations and other eligible entities stipulated in Article 3 of the Act. Schematic diagram of the division of implementing bodies (irrigation and drainage project) Irrigation system Drainage system Dam (state) Head works (state) River Main diversion works (state) Main drainage canal (state) Less than 500ha (pref.) Branch diversion works (pref.) Farm fields Irrigation pumping station (state) Less than 500ha (pref.) Drainage pumping station (state) Less than 500ha (pref.) Less than 100a (organization) Less than 100a (organization) Main facilities (state-operated) Branch facilities (prefecture-operated) Terminal facilities (organization-operated) Terminal facilities (organization-operated) Branch facilities (prefecture-operated) Main facilities (state-operated) Project name Irrigation and drainage project Management entity development system improvement project (land adjustment, etc.) Farm road improvement project Hilly and mountainous area comprehensive development project Percentage of Application criteria (lower limit area) Implementing government Terminal command body Beneficiary area subsidies area State 70% 5,000ha (s) 5,000ha (s) 2,000ha (upland fields) 2,000ha (upland fields) 2/3 3,000ha (s) 500ha (s) 1.000ha (upland fields) 100ha (upland fields) Prefecture 50% 200ha (s) 100ha (s) 100ha (upland fields) 20ha (upland fields) Prefecture 50% 20ha - Prefecture 50% Wide-area farm roads: 1,000ha Prefecture 45% General farm roads: 50ha Pref./org 55% Colonial type Prefecture 55% Pref./org 55% (General type) Production infrastructure improvement (prefecture) 60ha or more - (organization) 20ha or more - (Production infrastructure type) Production infrastructure improvement (prefecture) 20ha or more - (organization) 10ha or more - Wide-area cooperation type Production infrastructure 60ha or more - Limited to new installment or repair of large-scale facilities such as dams, head works and drainage facilities. Percentage of government subsidies and application area of the main projects (Ministry of Agriculture, Forestry and Fisheries) - - ( )=management body 6

8 7 (2) Change of plans, etc. In cases where a new land improvement project is conducted or the need for reviewing the plan or abolishing the project arises in accordance with a change in social conditions, etc., the Land Improvement District receives approval for the change of the plan through procedures of consent, coordination with municipal governments, application for approval, debriefing from third parties such as academic experts, and public announcement and inspection, as in the case of the decision on the original plan. Hearing of opinions Professional engineers Public announcement Establishment of the land improvement district Approval Petition of objection, decision of acceptance Public announcement and inspection of the plan and articles of association applicants Decision on suitability Interested persons Notification to the Briefing, inspection Prefectural governor 5. Procedures for the Establishment of a Land Improvement District and the Change of a Plan, etc. (1) Procedures for the establishment of a Land Improvement District The basic principle of the procedures for the establishment of a Land Improvement District is application and approval by beneficiary farmers. After the completion of necessary coordination, etc. with municipal governments, an application for approval must be filed with the prefectural governor. The governor hears opinions of professional engineers, makes a decision on suitability, and makes it public and available for public inspection, thus granting approval in open procedures. Assistance from prefectural employees Application for approval for the establishment Drawing up of the project plan and articles of association Unanimous approval from eligible parties outside agricultural land Collection of two-thirds or more approval the basics, etc. of the articles of association Outline of the plan Decision on specified areas Applicants (15 or more) Discussion on the outline of the plan Approval for incorporation of national land, etc Municipal mayors Public announcement of Unanimous approval on residential land, etc

9 6. Eligible Project Participants (1) Members of a Land Improvement District A Land Improvement District is established with the approval of the prefectural governor. The Land Improvement Act also establishes the articles of association of the Land Improvement District and land improvement project plan (including the maintenance and management plan). At the same time, all of the eligible parties stipulated in Article 3 of the Act within the Land Improvement District become its members (Article 11 of the Act). In other words, not only the eligible parties under Article 3 who consented to the establishment of the Land Improvement District, but also the eligible parties under Article 3 who did not consent, and also private corporations eligible for Article 3 and the national government or local public entity that owns farmland compelled by law to become members, assuming the obligations as well as having the rights stipulated under the Act. (2) Eligible members (eligible participants in the land improvement project = eligible parties under Article 3) As a rule, for agricultural land, usufructuaries (cultivators), and for non-agricultural land (mainly appropriate land to be developed as agricultural land), owners are to be eligible members of the Land Improvement District. For the land where a usufructuary right is set, owners in case of agricultural land and usufructuaries in cse of non-agricultural land are able to obtain membership following the specified procedures. Table of eligible parties under Article 3 Structure of eligible parties under Article 3 (parties eligible to participate in the land improvement project) Land classification Eligible parties under Article 3 (Agricultural land) 1 Land provided for cultivation, etc, based on the ownership right (owner farmer s land) 2 Land provided for cultivation, etc, based on a title other than the ownership right (tenant farmer s land) (Non-agricultural land) 3 Land used and benefited from based on the ownership right 4 Land used and benefited from based on a title other than the ownership right Owner = usufructuary Usufructuary (if the owner offers to participate in the project and the agricultural committee approves, the owner) Owner Usufructuary (if the usufructuary offers to the agricultural committee after obtaining approval of the owner) Since the land improvement project is implemented in order to promote agricultural use of the land, and to improve and streamline farm management, for land already provided for agricultural use, its cultivator (accordingly, in the case of a tenant land, the tenant farmer who is a cultivator) has priority. This coincides with the idea of the protection of cultivation rights under the Agricultural Land Act. However, in the case of including non-agricultural land in the district of the land improvement project and converting it to agricultural land, owner s interests are considered the deepest, and for this reason, the owner s rights are prioritized, unlike the case of agricultural land. 8

10 7. Bearing of Costs (1) The concept of cost bearing The improvement of agricultural production infrastructure has, along with effects on farm management such as improvement of productivity, effects on national economy such as stable provision of food at fair prices, and various regional effects such as promoting regional economies and improving rocal living environments. For this reason, land improvement projects are implemented, with borne by prefectures, municipalities and beneficiary farmers their fair shares of the costs for implementing the projets, in addition to the national government s cost bearing and subsidies, in accordance with the implementing bodies and types of projects. (2) Regional fiscal measures and guidelines Standard levels of cost bearing by local public entities for the national and prefectural projects are set in the guidelines decided by the national government. The guidelines limit the cost borne by municipalities and farmers, and necessary regional fiscal measures are taken for the actual amount of cost bearing. Cost bearing system (State-operated projects, general type) Project costs National expenses (transferred to the special account) Borne by the state 1 Instead of borrowing investment and loan funds, a direct allocation method has been introduced for new construction districts from FY Accounting has been done on the special accounts for a stable supply of food: national land improvement project accounts from FY (Prefecture-operated projects) Borne by municipalities Project costs Borne by farmers Advanced payment by national expenses Unredeemable for 2 years after completion of project Redeemable in 15 years Investment and loan fund* Borne by prefectures Unredeemable for 3 years after the year of borrowing Redeemable in 10 years Guidelines Guidelines, etc. on agricultural infrastructure improvement and rural development projects (national and prefectural) (Ministry of Agriculture, Forestry and Fisheries) Project name Percentage of cost bearing (%) State Guidelines Farmers Prefectures Municipalities National irrigation and drainage project National farmland reorganization and consolidation project (hilly and mountainous area type) Prefectural irrigation and drainage project National subsidies National expenses (Organization-operated projects) Borne by prefectures Project costs Allocated for the reference year (prefectural expenses) Borne by municipalities Borne by farmers Allocated for the reference year (municipal expenses) In general, public corporation funds are allocated, which are unredeemable for a maximum of 10 years and redeemable in 15 years after the year of borrowing. Management entity development system improvement project Upland field area comprehensive development project (prospective farmer cultivation type) Hilly and mountainous area comprehensive development project (colonial type) Farm pond development project (small scale) Note) =By utilizing interest-free funds, actual cost bearing by farmers will be further reduced. National subsidies National expenses Prefectural subsidies Allocated for the reference year (prefectural expenses) Municipal subsidies Allocated for the reference year (municipal expenses) Borne by farmers In general, public corporation funds are allocated, which are unredeemable for a maximum of 10 years and redeemable in 15 years after the year of borrowing 9

11 8. Replotting system Land improvement projects such as land readjustment and agricultural land development alter land plot character depending on the construction works. Therefore, legal procedures are necessary to appropriately and smoothly reorganize land rights, according to the readjusted land plots, farm roads and water channels. For this reason, the Land Improvement Act, as well as responding to such requests, provides for a replotting system as a legal procedure to promote collectivization of agricultural land. Replotting needs to be proceeded while facilitating consensus-building among the rights holders concerned, with people who have various rights such as the ownership right, right of pledge, right of lease, and right of lease for use, and their procedures are complicated and diverse, and considerable difficulty is involved in coordinating them. Roles of replotting Ⅰ Collectivization of agricultural land Ⅱ Orderly arrangement of land use (prevention of sprawl) : Land shaping and producing : Establishment of rural park sites : Establishment of factory sites : Establishment of agricultural land Ⅲ Position shift and widening of roads and watercourses (including production of land for public use, such as widening of expressways and rivers) Land use coordination through replotting upland field housing site upland field (approval for replotting to a different type of land) upland field road upland field upland field road upland field (offer of special reduction of site area) Previous land water channel (offer of non-replotting) paddy field (offer of non-replotting) paddy water field (offer of special channel reduction of site area) (offer of special reduction of site area) (offer of special reduction of site area) paddy field paddy field 10 housing site Upland field (non-agricultural land zone) (prospective housing site) road crop field rural park plant upland field Replotting drainage canal road irrigation canal irrigation canal For agricultural land drainage canal Non-agricultural land zone

12 9. Land Improvement District Image of a specified area of a Land Improvement District The Land Improvement District is a public entity established under the Land Improvement Act with the aim of implementing a land improvement project in a specified area. Overview of the land improvement district system Establishment procedure A Land Improvement District is established with the approval of the prefectural governor based on the project plan, the articles of association, etc. after 15 or more eligible project participants obtaining two-thirds or more approval from whole eligible potential beneficiaries on the general outline of the target land improvement project and Land Improvement District. Head works Drainage canal Irrigation canal Drainage pumping station Dam A specified area of a land improvement district District Corresponding to a specified area concerning the execution of a land improvement project (territories of agricultural lands to be a beneficiary area of the land improvement project) Members Farmers within the district (as a rule, usufructuaries of agricultural lands) (Note) They become members regardless whether they agreed or not at the time of the establishment of the land improvement district. Projects Land improvement projects (establishment, change, management of irrigation and drainage facilities, land readjustment, etc.) Projects accompanying land improvement projects Management and operation 1 The articles of association, agreement 2 Officers 5 or more directors, 2 or more auditors 3 General meeting and general meeting of representatives (allowed to establish if the number of members exceeds 200) The present state of the Land Improvement Districts Number, area, etc. of Land Improvement Districts (as of the end of FY 2008) Number of districts Land improvement districts Area (thousand ha) Number of members (thousand) 5,150 2,710 3,840 Note: there is overlap between the area and the number of members. Condition of land improvement districts by area dimension (as of the end of FY 2007) Area 5,000ha or more 5,000-1,000 1, Less than 100 ha Total Number of districts (Ratio) 73 (1.4) 551 (10.7) 523 (10.2) 468 (9.1) 1,202 (23.3) 2,333 (45.3) 5,150(100.0) Source: Survey by the Ministry of Agriculture, Forestry and Fisheries 11

13 10. Flow Chart for the Organizational Structure of the Land Improvement District (1) General meeting (or general meeting of representatives) The general meeting (or general meeting of representatives) is the essential, top legislative organ that makes decisions as a Land Improvement District. The executive organ consisting of directors, auditors, etc. shall perform their duties complying with the decisions made by the general meeting (or general meeting of representatives). Article 22 of the Act stipulates that the general meeting of the Land Improvement District shall be organized by all members. This means that it clearly defines the existence of the general meeting as that of stakeholders and the status of all members who participate in it as stakeholders with voting rights. Actually a general meeting (or general meeting of representatives) may be held if legal requirements are fulfilled. General meeting (or general meeting of representatives) Members (2) Officers of the land improvement district The land improvement district has five or more directors and two or more auditors as externally directed representatives and staffs who conduct administrative affairs and audits (Clause 1 and 2, Article 18 of the Act). Directors and auditors shall comply with the articles of association, agreements, and resolutions of a general meeting (or general meeting of representatives), as an essential, permanent organ of the land improvement district, and play important roles in the operation of the land improvement district both internally and externally. Therefore, the Act stipulates their numbers, terms, election method, duties, etc. in detail. (3) Committees For an appropriate operation of the Land Improvement District, committees may be set up as subsidiary organs of the board of directors, in line with the actual situation of the operation of the Land Improvement District. In such a case, a director is appointed for the member of each committee. Assessment, replotting, construction, irrigation and drainage coordination committees, etc. (4) Staff Directors may place staff in order to process business operations of the Land Improvement District smoothly. Directors shall assign staffs their duties and supervise them to make sure their work is processed appropriately. Auditors Board of auditors Officers Secretary General Directors Board of directors In charge of accounting In charge of construction In charge of replotting In charge of irrigation and drainage coordination Secretariat Committees Steering committee Construction committee Replotting committee Irrigation and drainage coordination committee General affairs and accounting unit Administration unit Construction and replotting unit 12

14 11. Financial Conditions of Land Improvement Districts The financial conditions of the Land Improvement Districts surveyed (4,590 districts) are compiled, their totals are divided by the actual district number of the applicable Land Improvement Districts by revenue/expense item, and the amount per Land Improvement District, by revenue/expense item, per 10ha, are calculated. The table below shows this. Amount per district and amount per 10a by revenue/expense item Revenues Expenses Per district Per 10a Percentage Per district Per 10a Percentage Item Item Amount Amount Amount (yen) % Amount (yen) % (thousand yen) (thousand yen) Dues 33,218 5, Permanent expenses 24,252 4, Ordinary dues 16,344 2, Operating expenses 12,924 2, Special dues 16,874 2, Administration expenses 3, Subsidies/grants-in-aid 21,448 3, Officers remuneration 1, National/prefectural subsidies 9,460 1, Personnel expenses for staff 8,001 1, Subsidies for construction 7,403 1, Maintenance expenses 11,328 1, Subsidies for permanent expenses 2, Improvement and repair 4, expenses Municipal and other grants-in-aid 11,988 2, Electric power and oil cost 1, Subsidies for construction 9,220 1, Personnel expenses 2, Subsidies for permanent 2, Subsidies etc expenses Borrowed money 11,415 1, Contribution to optimization Agriculture, Forestry and 4, Others 1, Fisheries Finance Corporation Others 6,518 1, Construction expenses 8,979 1, Other revenues 23,169 4, State- and prefectural cost 9,832 1, bearing/contributions Multipurpose usage charge 1, Redemption of borrowed money 31,076 5, such as public corporation funds District exclusion settlement 1, Reserve funds 11,211 1, Contract fee 2, Other expenses 8,901 1, Prior-period revenue Balance carried forward 31,342 5, Others 16,999 2, Balance carried forward 36,343 6, Total 125,593 21, Total 125,593 21, (Notes) 1 The amount per district column shows the amount divided by the applicable actual district number 2 The per 10a column shows the amount per district of 1 divided by the actual area 3 In the percentage column listed are the percentages by item that account for the amount of gross revenues and the amount of gross expenses of the LIDs surveyed. 4 The total column shows the amount of gross revenues and the amount of gross expenses of the LIDs surveyed divided by the total number of the districts. 13

15 12. Management of Land Improvement Facilities (1) Management system The management of land improvement facilities, if they have been improved under an organization-operated land improvement project, shall be conducted by relevant organizations (LID, etc.). For most of the facilities improved under a state- or prefecture-operated land improvement project, their management is commissioned or they are transferred (conditional) to the prefectural government or municipalities, or LID, and each entity that has received a management commission or taken over manages the facilities. Of the facilities developed by the state, extremely large-scale and highly-public facilities are under the direct control of the central government (the Ministry of Agriculture, Forestry and Fisheries) exceptionally. Management system of land improvement facilities [Construction body] State (Ministry of Agriculture, Forestry and Fisheries) Prefectures Municipalities Land improvement districts Direct control Management commission Management commission/transfer Management commission/transfer Management by construction body [Management body] State (Ministry of Agriculture, Forestry and Fisheries) Prefectures Municipalities Land improvement districts (2) Management by land improvement districts Approximately 60% of the key agricultural water-use facilities developed under state-operated land improvement projects are managed by LIDs. 14 List of Key water-use facilities (developed by the state) by management body Management body Agricultural irrigation and Key facilities drainage canals Number of Number of Percentage Percentage facilities facilities State % 94km 0.3% Prefectures % 928km 2.8% Municipalities % 16,547km 50.3% Land improvement 1, % 15,237km 46.2% districts Others % 117km 0.4% Total 1, % 32,923km 100% Source: Survey by the Ministry of Agriculture, Forestry and Fisheries (as of the end of March 2009) Note: Breakdown of the key facilities: dams (231 locations), head works (334 locations), irrigation and drainage pumping stations (1,001 locations), sluice gates (176 locations)

16 13. Federations of Land Improvement Associations The Federations of Land Improvement Associations have been established with the aim of promoting the members common interests by ensuring appropriate implementation of land improvement projects and efficient operation of land improvement districts, as a cooperative organization of the people who conduct land improvement projects. These Federations of Land Improvement Associations have been established at the levels of prefectural and central governments with the approval of the Minister of Agriculture, Forestry and Fisheries. LIDs in a prefecture consist of the members of a FLIA at prefectural level and FLIAs at prefectural level consist of that at national level. Therefore 47 FLIA at prefectural level and one FLIA at national level have been legally established under the Land Improvement Act. Business operations of the Federations of Land Improvement Associations 1 Technical guidance on land improvement projects conducted by members and other assistance 2 Provision of education and information on land improvement projects 3 Survey and research on land improvement projects 4 Cooperation for land improvement projects conducted by the state or prefectures 5 Guidance for projects by local federations, who are members, provided by the national federation. 6 Other necessary projects The system of the Federations of Land Improvement Associations National Federation of Land Improvement Associations Members: Prefectural Federations of Land Improvement Associations and extremely large-scale LIDs with 10,000ha or more land. Prefectural Federations of Land Improvement Associations (47 federations) Members: LIDs, Land Improvement Associations, municipalities, agricultural cooperatives, etc. Extremely large-scale LIDs (4 districts) LIDs, etc. (4,612) Note1: ( ) = the number of members Note2: as of April 2009 Municipalities (1,658) Agricultural cooperatives, etc. (187) 15

17 14. Reference Enactment of the Land Improvement Act 1 Enacted in 1949 The Cultivated Land Consolidation Act, Water Utilization Association Act, Hokkaido Irrigation Association Act and Agricultural Land Development Act are consolidated into the LIA. 2 Reasons for the enactment Shift to a cultivator-oriented system Unification of the system Systematization of state- and prefecture-operated projects Systematization of farmland collectivization History of the main amendments to the Land Improvement Act Amendment Background of the amendment Improving the procedures for changing the scope and plan of state- and prefectural-operated projects Seeking rapid promotion of small-scale land improvement projects 1 Establishment of a non-application system for state- and prefecture-operated projects 2 Establishment of a municipal-operated project system Amendment Background of the amendment Integrating two-stage procedures of approval of project suitability and final review Setting up a special account in the national budget system for the efficient implementation and early completion of state-operated projects Developing rules concerning management (operation and maintenance) and disposal on state-operated land development facilities 1 Simplification of procedures for starting land improvement projects 2 Establishment of a special account for specified land improvement construction 3 Development of land improvement property-related rules Amendment Background of the amendment Clearly stating the achievement of the policy objectives as a purpose of the Act, in consistency with the enactment of the Agricultural Basic Act being placed above agricultural laws. Allowing the Act (LIA) to also contribute to the development of the livestock industry, which is a growing sector Establishing a system to contribute to the planned implementation of land improvement projects Developing the rules of procedure to appropriately manage land improvement facilities Developing the rules of procedure to control the establishment of small and weak LIDs 1 Revision of the purposes in response to the enactment of the Agricultural Basic Act 2 Expansion of land improvement projects (development and improvement of grassland) 3 Systematization of long-range land improvement projects 4 Improvement and streamlining of facility management (systematization of management rules, etc.) 5 Improvement of the establishment system for land improvement districts by project Amendment Background of the amendment Establishing application procedures for local public entities, etc, for the promotion of dairy farming 1 Systematization of state- and prefecture-operated grassland development projects applied for by local public entities Amendment Background of the amendment Responding to increasing competition between agricultural and other land use in rural areas Allowing the implementation of multiple construction works with one procedure under a unified plan, and bringing it in line with the agricultural promotion plan. Establishing a project system to achieve the agricultural promotion area development plan. Developing rules concerning the management of agricultural water-use facilities, etc. accompanying urbanization 1 Improvement of the handling of non-agricultural lands under the replotting system 2 Establishment of the integrated land improvement projects (Combined projects with single projects used to be implemented independently, hearing of mayors opinions) 3 Improvement of project implementation methods based on the agricultural promotion plan (municipal application projects and municipal special application projects) 4 Coordination related to the use of agricultural irrigation and drainage facilities, etc (municipal and other consultation systems, etc.) 16

18 Amendment Background of the amendment Expanding target project items for the special account in the national budget system in order to contribute to the promotion of state-operated projects. 1 Adding agricultural land development projects and land readjustment that is conducted with them to target projects for the specified land improvement construction special account Amendment Background of the amendment Responding to increasingly serious problems such as pollution of agricultural water due to contamination from local towns and villages with increasing non-agricultural activities, etc. Establishing implementation procedures for community sewerage projects in order to restore the quality of irrigation water in line with standard for water quality. Improving the establishment of non-agricultural land in replotting in response to requests for regional development. Improving project procedures to maintain functions of land improvement facilities. 1 Introduction of a governor decision-making system to the municipal and other consultation system 2 Legalization of implementation procedures for agricultural community sewerage facility development projects 3 Improvement of the methods for systematically creating non-agricultural lands from agricultural lands under the replotting system (acquisition of a specified proportion of agricultural lands all together at once in a certain area for creating new lands for non-agricultural use) 4 Improvement of project implementation procedures (simplification of the approval collection procedure concerning facility renewal projects, etc.) Amendment Background of the amendment Taking measures to accelerate state-operated projects of which progress falls behind other entities-operated projects under them 1 Accounting in a special account for all state-operated land improvement projects (reorganization to a state-operated land improvement project special account) Amendment Background of the amendment In response to expanding benefits brought to local non-agricultural residents through the implementation of projects amid the progress of mixed living in rural areas, municipalities concerned need to bear the cost equivalent to the benefits because it is difficult to identify beneficiaries among non-agricultural residents. Needs for establishing procedures contributing to public intermediation program on promoting trade and lease of agricultural lands etc. Improving the application system for facility renewal projects operated by LIDs. 1 Clarification of project cost bearing by municipalities in state- and prefectural-operated land improvement projects 2 Improvement of the replotting system for the promotion of agricultural land trade and lease, etc. (new agricultural land replotting, introduction of allocation of replotted land prior to the completion of construction) 3 Improvement of application procedures for renewal projects of land improvement facilities managed by the state or prefectures Amendment Background of the amendment Allowing more smooth project implementation procedures by communal agricultural production corporations and individuals that conduct large-scale farm management 1 Introduction of a project implementation system by eligible parties under Article Amendment Background of the amendment Responding to the request to implement land improvement projects with consideration in harmony with the environment Building a system to promoting understand of the entire region with non-agricultural sectors Improving the procedures to appropriately maintain and renew land improvement facilities Building a system to abolish projects in light of the efficient implementation of projects 1 Put the clarification of consideration in harmony with the environment into the procedures as a principle of project implementation 2 Introduction of procedures for better reflection of regional opinions (consultation with mayors, establishment of a system to submit opinions of local residents, etc. and a system to hear opinions of specified beneficiaries) 3 Improvement of application procedures for renewal projects 4 Introduction of procedures to abolish state- and prefecture-operated projects and improvement of the system for cost bearing 17