RIETI-TIER-KIET Workshop

Regional Revitalization in the Global Economy (Summary)

Information

    • Time and Date: 9:45 - 17:20, Tuesday, October 27, 2015
    • Venue: Beppuwan Royal Hotel, Oita

Summary

Opening Speech

On the Evolution of the "One Village One Product" Movement and Michi no Eki from Oita to the World

FUJITA Masahisa (President and CRO, RIETI / Professor, Konan University / Adjunct Professor, Institute of Economic Research, Kyoto University)

Roots of the One Village One Product movement

Oita prefecture is the birthplace of the One Village One Product (OVOP) movement. It began as a grassroots movement to address economic concerns stemming from its fairly remote location surrounded by mountains. The epicenter of this movement was the town of Oyama in the early 1960s which established the slogan "Let's go to Hawaii by planting plum trees and chestnut trees!" Oyama aimed to differentiate itself from the common agricultural practices of growing rice and wheat. In the 1990s, this movement evolved by combining with michi no eki roadside stations in the 1990s as a platform to sell and market its agricultural products.

This model led to a new perspective on development strategy presented at the 2007 World Bank Conference (Annual World Bank Conference on Development Economics Global 2007). This perspective focused on "Brand Agriculture" as a catalyst for economic development. Traditional concepts of economic development begin with agriculture, and then move on to manufacturing before reaching the service industries. However, such traditional model is not ideal in every situation, especially in peripheral or land-locked regions where traditional agricultural products may be difficult to grow and maintain and the local population is poor. Creative nature-based industries are the key in these areas, driven by innovation and smart branding.

Traditionally, the agricultural sector has focused on the following points: producing generic products or staple agricultural products (wheat, rice and soybeans); aiming for constant returns (annual harvests); and leveraging labor and capital. However, the Brand Agriculture approach emphasizes aspects such as differentiating products, establishing economies of scale and scope, and encouraging innovation in branding and marketing. It is through this approach that greater growth and regional economic autonomy can be achieved.

Evolution of the OVOP movement in Japan

The OVOP movement started spontaneously in the 1960s, as grassroots movements occurred in relation to changing government regulations regarding rice production. A pivotal legitimizing event occurred in 1979, when Morihiko Hiramatsu, then governor of Oita prefecture, named the movement "One Village One Product."

Governor Hiramatsu identified three principles for the movement. The first was creating products with appeal stemming from their local roots, thereby differentiating them from non-branded products. The second was emphasizing self-reliance and creativity, through which independence could be realized. Not relying on the government for handouts or aid was a key point. The third principle was developing human capability and fostering people with an independent, creative spirit and a drive for hard work.

OVOP initiatives in Oita prefecture have seen enormous growth over the years. In 1980, there were about 143 products under designated OVOP initiatives, with sales of just under 40 billion yen. By 2001, there were 336 designated OVOP initiatives focused on local specialties, including agricultural, fishery and forestry products, and handicrafts. Sales in the same year were about 140 billion yen, a significant figure which had a major benefit on the local economies and communities.

One representative example of an OVOP project--the Irodori Project--can be found in the remote mountainous town of Kamikatsu in Tokushima prefecture. Kamikatsu had relied on mandarin orange production for its economy. However, there was inclement weather one year with heavy snowstorms that caused the orange trees to perish. In response, a special project was developed, focused on making tsumamono , or garnishes used for traditional haute cuisine Japanese dishes. The market for this project may not be large, but it is very specialized, meaning that the operators of the Irodori Project have the market cornered. Through the success of this project, the local economy has grown strong, with median annual income from the project at about two million yen per member. In addition to the economic benefits, there are also social benefits. For example, while most project members are elderly, at an average age of 67 years, they are active and healthy, with per capita medical expenditures at 260,000 yen, significantly lower than the average.

Emergence of michi no eki

Michi no eki , or roadside stations, is an initiative started by the Ministry of Land, Infrastructure and Technology (MLIT) in 1993. In the first year of their implementation, there were 103 such facilities opened. In 2015, there are now more than 1,050 all over Japan, focused mainly in the rural areas. Outside of Japan, both concepts of OVOP and michi no eki have been adopted by countries all over the world, including Thailand, China, Turkey, Kenya, Malawi, Yemen, and Mexico. International adoption is being guided by the MLIT, the Japan Bank for International Cooperation (JBIC), and the World Bank.

According to a World Bank report, michi no eki is "an excellent tool for the third generation of infrastructure interventions which seek to optimize regional development and integration and enhance the multi-sectoral and multipurpose dimensions of infrastructure investment" (T. Yokota, World Bank report 35683, 2006). They create a variety of locally-founded benefits which lead to speedy and sustainable regional development.

The concept of michi no eki is unique to Japan for three reasons. The first, and most significant, is that the products that are on sale have been designed, developed, and manufactured by local communities, thereby ensuring that the economic benefits directly affect the local community. The second is that, through this system, business opportunities are provided for local residents. The third is the existence of a venue for the provision of public services, including health care, education and training programs, and cultural activities, in addition to commercial services for locals and visitors alike. They are designed with three overlapping support pillars in mind: creating a refreshing venue, using local charm and good design to spread the appeal of the region to visitors; serving as information and cultural centers for marketing, promotion, and commercial activities; and community development, empowering women, the elderly, the poor and other groups whose economic potential is often not reached.

Conclusion

Brand Agriculture, also referred to as creative nature-based industry, has massive potential for regional revitalization. As a grassroots movement, it encourages the active involvement of local residents, thereby leading to the economic and social benefits of this approach to directly affect them. Michi no eki plays an essential role in the movement. They provide a venue and outlet for locally-branded agricultural products to be marketed and sold, thereby spreading the appeal of the region to visitors. In addition, they provide a center for information and cultural exchange, health care, and community development.

However, there is no "one-size-fits-all" approach to implementing these projects. It is therefore essential that local communities identify potential markets and products, leveraging their unique resources for maximum economic and social benefit.