Download Account for Agriculture, Forestry, Fisheries and Food Business

Japan Finance Corporation (Account for Agriculture, Forestry, Fisheries and Food Business Operations)
http://www.jfc.go.jp
1. Summary of operations implemented using FILP funds
For sustainable and sound development of agriculture, forestry and fisheries or businesses contributing to the security of stable food supply, JFC
uses FILP funds for supplying long-term loans with low interest rates intended to complement financial services of general financial
institutions to persons engaged in agriculture, forestry and fisheries management or in the business of manufacturing foodstuffs.
Note: Operations not eligible for FILP include financing related to interest free loans for forest management specially designed to maintain biodiversity etc. JFC extends interest free loans using other funds than FILP. Securitization support operations are exempt from the analysis.
2. Amount of lending under FY2016 FILP
(Unit: billion yen)
Estimated outstanding amount of FILP lending at the end of FY2015
2,151.2
FY2016 FILP
249.0
3. Estimated policy (subsidy) cost analysis of the project
(1) Policy (subsidy) cost
Category
(Unit: billion yen)
FY2016 Fluctuation
FY2015
1. Subsidies, etc. from the Government
37.8
33.7
-4.1
2. Money transferred to the Government
-201.2
-222.7
-21.5
-163.4
-189.0
-25.6
230.8
252.0
+21.2
67.4
63.0
-4.3
-
-
-
67.4
63.0
-4.3
60
60
-
Subtotal (1+2)
3. Opportunity cost of capital
investments, etc. from the Government
Subtotal (1+2+3)
4. Fluctuation in retained losses
Total (1+2+3+4=policy cost(A))
Analysis period (years)
(2) Breakdown of policy cost by the time of the provision of funds
Category
FY2015
(A) Policy cost (previously cited)
(Unit: billion yen)
FY2016 Fluctuation
(3) Year-to-Year comparison analysis
Category
FY2015
(A) Policy cost (previously cited)
67.4
63.0
-4.3
(A') Policy cost obtained by re-calculating (A)
using the same assumed interest rate as in the
FY2015 analysis
67.4
61.7
-5.7
(B) Policy cost of (A') generated in
FY2016 or later
49.8
61.7
+11.9
Policy cost in FY2016 is 63.0 billion yen. The analysis shows an increase of 11.9
billion yen in real policy cost over FY2015 when the effect of change in the assumed
interest rate for FY2015 and FY2016 is eliminated and the policy cost that accrues in
FY2016 and thereafter are compared.
This increase in real policy cost is considered to be attributable to the following factors:
• Decrease in cost due to new loans in FY2016 (-5.7 billion yen)
• Increase in cost due to disuse of FY2014 (+0.4 billion yen)
• Decrease in charge-off (-1.8 billion yen)
• Increase in cost due to increase in advanced redemption (+0.9 billion yen)
• Other factors (increase in clerical cost, etc. due to new loans for FY2016) (+18.1
billion yen)
(4) Breakdown of policy cost by causative factor
(Unit: billion yen)
(A) Policy cost in FY2016 (previously cited)
63.0
1) Prepayments
14.2
-25.9
67.4
63.0
-4.3
1) Opportunity cost of capital investments, etc.
provided before the beginning of the analysis
period
226.1
247.6
+21.5
2) Loan losses
2) Policy cost expected to be newly
accrued during the analysis period
-158.8
-184.6
-25.8
3) Others (including profit spread)
37.8
33.7
-4.1
-201.2
-222.7
-21.5
1.6
1.7
+0.1
3.0
2.6
-0.4
Subsidies, etc. from the
Government
Money transferred to the
Government
Policy cost accrued with a
change in surplus funds
Opportunity cost of
capital investments, etc.
(Unit: billion yen)
FY2016 Fluctuation
74.7
(5) Sensitivity analysis (cases where assumptions change) (Unit: billion yen)
Changed assumption and extent of change
Policy Cost (Fluctuation)
Interest rates on money loaned and
funds raised +1%
179.4 (+116.3)
+58.8
Fluctuation in opportunity cost
10% rise in charge-off
<Reference> Budgeted amounts of subsidies and capital investment in FY2016
Subsidies:
17.5 billion yen
Capital investment:
4.1 billion yen
63.1 (+0.1)
-
Fluctuation in opportunity cost
4. Outline of estimation and project prospect employed in the analysis
1)
2)
The estimation is made in respect of all lending operations financed by Fiscal Loan Fund.
The estimation is made on the assumption that financing is implemented based on the FY2016 operation plan (¥418.3 billion) in addition to the existing loan
balance of ¥2,545.3 billion (estimated as of the end of FY2015).
3)
4)
The analysis period is supposed to be 60 years until the complete repayment of loans made based on the FY2016 operation plan as well as existing loans.
In accordance with the above assumptions the estimate was made in relation to some data including subsidies to be required for the implementation of the
operation plan,and the payment to the national treasury is expected in FY2020 and onwards.
5)
6)
The JFC loan interest rate is supposed to be 1.678% (as a fixed rate for new loans in FY2016).
For the prepayment ratio, the average figure for the preceding 3 years from FY2012 to FY2014 (3.12%) is applied. The loan loss provision ratio is the average
figure for the preceding 5 years from FY2010 to FY2014 (0.01%).
(Unit: %)
FY
Prepayment ratio
2010
2.91
0.00
Result
2011
2012
2.66
3.04
0.01
0.01
2013
3.83
0.01
Estimated
2014
2015
2.50
2.19
0.01
0.00
Planned
2016
2.38
0.00
Assumptions for calculation
2017~2075
3.12
0.01
Provision on loans
7)
In the policy cost analysis, accumulated bad debt write-off is computed based on the average loan loss provision ratio in the preceding 5 years. It is estimated
to be ¥1.0 billion.
The loan loss provisions are calculated on the assumption that the end-of-term loan loss provisions are calculated according to the loan provision ratio (1.28%
under the FY2016 budget) based on the asset assessment after the charge-off.
* Components in each column may not add up to the total because of rounding.
5. Reasons for granting of subsidies, mechanism and underlying laws
Agriculture, forestry and fisheries are subject to nature. Most managing bodies engaged in these sectors are small, often unstable and barely profitable.
Therefore it takes a long time to recover invested capital.
The objective of JFC (Agriculture, Forestry, Fisheries and Food Business Operations) is to provide long-term loans with low interest intended to complement
financial services of general financial institutions to persons engaged in agriculture, forestry and fisheries management. JFC receives financial assistance from
the general account of the national treasury as compensation for expenses (policy costs) which are not covered by spread.
(Underlying laws and regulations)
・Grants have no legal base (they are budgetary measures).
・Capital fund and payment to the national treasury are stipulated in the Japan Finance Corporation Act.
(Japan Finance Corporation Act)
Article 4: 1） The Government may, when it finds it to be necessary, make contributions to JFC within the amount appropriated in the budget.
Article 47: 1） In the event that the amount of the surplus recorded in the settlement of accounts for each business year exceeds zero in each account
related to the operations listed in each Item of Article 41 hereof, JFC shall accumulate, as a reserve, the amount calculated in accordance
with the standards prescribed by a Cabinet Order, among such surplus, until it reaches the amount prescribed by the Cabinet Order, and if
there is still a surplus, JFC shall pay the amount of such surplus into the National Treasury within three (3) months after the end of such
business year.
6. Special remarks
(Policy financial reform-related matters)
Agriculture Forestry and Fisheries Finance Corporation was dissolved on October 1, 2008, by the provisions of Paragraph 16 Article 1 of Supplementary
Provisions of “Japan Finance Corporation Act” (Act No. 57, 25 May 2007) and Japan Finance Corporation [Account for Agriculture, Forestry, Fisheries and
Food Business Operations]. The new corporation was established on the same day and succeeded to all the rights and obligations of AFFFC except assets to
be handed to the Government, etc.
(Reference) Outcome and social and economic benefits of operations
1)
Aggregate amount of loan commitment from FY1953 to FY2014
3.85 mil. cases 19.8536 trillion yen
Loan commitment in FY2014
12,000 cases
367.0 billion yen
Outstanding loan at the end of FY2014
175,000 cases
2.6429 trillion yen
Loan Commitment planned for FY2016
420.0 billion yen
2) Assistance for agricultural sector
JFC extends loans to support various highly-motivated farmers’ efforts to improve their farm management in accordance with the policy of the “Basic Act
and Plan on Food, Agriculture and Rural Areas.”
a. 21% (48 thousand) of certified farmers (farmers whose plans for improving agricultural management approved by municipal governments) use Super L
Loan (Long-term Investment Loan for certified farmers) to realize efficient and stable farm management. The figure increases to 40% for corporate
certified farmers alone.
b. JFC extended 188.2 billion yen of Super L Loans to 6,028 parties to foster and support certified farmers in FY2014. The borrowers would enjoy the
increase of 1.0393 trillion yen of gross production and 155.3 billion yen of agricultural income.
c. JFC provided loans to land improvement projects in order to enhance productivity of farmland, etc. Its loan commitment was 12.0 billion yen in
FY2014. It is estimated by the existing cases that benefits of entire projects such as crop production effects and saving effects in farming costs will be
128.6 billion yen.
d. JFC provided necessary loans for stability and preservation of management to farmers whose businesses temporarily suffer a downturn because of
disasters such as earthquakes/typhoons and changes in social and economic environments such as drops in prices of agricultural products. It is
estimated that the Corporation contributed to the maintenance of employment opportunities for 7,668 people in FY2014.
3) Assistance for forestry sector
JFC is assisting improvement of forests and stability and preservation of forestry management to contribute to the maintenance of forests' multiple
functions through financing in accordance with the policy development of the “Basic Act on Forests and Forestry” and “Basic Plan for Forests and
Forestry.”
a. JFC provided forestation related loans to 189 forestry management organizations and supported the forestation of 30 thousand hectares in FY2014.
b. The size of planted forests managed by 1,835 forestry management organizations that have the balance of forestry funds is estimated to be 1.36 million
hectares, and, according to the past research, public benefit functions are calculated at about 3.8 trillion yen, that include surface erosion prevention
function (1.5338 trillion yen) and water purification function (794.4 billion yen).
4) Assistance for fishery sector
JFC is proactively assisting fishermen's efforts for stable supply of fisheries products and sustainable use of fishery resources through financing in
accordance with the policy development of the “Basic Act on Fisheries Policy.”
a. It is estimated that the fishermen financed by JFC loans produce 190.2 billion yen or 987 thousand tons (26% of domestic production) in FY2014 in
marine fishery, the main fishery production in Japan. This contributes to the stable supply of fishery products and creation and maintenance of about 8
thousand job opportunities in fishery areas.
b. JFC provided necessary loans for stability and preservation of management to fishermen whose businesses temporarily suffer a downturn because of
disasters such as typhoons, and changes in social and economic environments such as drops in the prices of fishery products, in addition to fishermen
affected by the Great East Japan Earthquake. It is estimated that the Corporation contributed to the maintenance of employment opportunities for 1,822
people in FY2014.
5) Support for food industry
JFC positively supports efforts for cooperation between agriculture, forestry and fisheries and food industries and highly-developed health management
for secure and safe stable supply of food through financing to food processors.
a. The financing was offered to 266 cases (59.5 billion yen) in FY2014. This contributed to the creation of 1,537 job opportunities with such projects.
b. It is estimated that transaction volume of domestic agricultural, forestry and marine production in such borrowers will increase to about 99,000 tons
within 3 to 5 years, and transaction value of domestic agricultural, forestry and marine production by stable transaction contracts with people who
engage in agriculture, forestry, and fishery will increase to about 36,000 tons. This contributes to the advancement of domestic agriculture, forestry and
fisheries.
(Reference) Changes in Policy Costs by Component
<Japan Finance Corporation (Account for Agriculture, Forestry, Fisheries and
Food Business Operations)>
(Unit: billion yen)
Policy costs (total amount)
Of which, subsidies, etc. from the government
Of which, money transferred to the government
Of which, opportunity cost of capital investments, etc. from the government
450.0
350.0
155.9
126.9
109.4
250.0
150.0
55.2
65.7
76.2
42.4
67.2
258.1
248.3
246.5
248.7
231.7
-154.6
-150.5
-143.2
-155.2
-166.6
37.8
303.1
283.6
262.1
33.7
230.8
252.0
50.0
-50.0
-210.8
-150.0
-242.6
-218.7
-201.2
-222.7
FY2013
FY2014
FY2015
FY2016
-250.0
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
Notes 1. Policy costs for each fiscal year differ in assumptions including interest rates applied to estimates.
2. Figures until FY2008 indicate the policy cost of AFFFC.
(Points)
・Policy costs as a whole are on a downward trend due to the effects of improvement of the balance of interest rates in accordance with a decline in
interest rates.
・From FY2012 onward, money transferred to the government and the opportunity cost of capital investments, etc. from the government have increased
partly due to the extension of the analysis period in accordance with the extension of the loan period as a response to the Great East Japan Earthquake.
(Reference) Financial Statements
Balance Sheet (Account for Agriculture, Forestry, Fisheries and Food Business Operations)
Item
(Assets)
Cash and Deposits
Cash
Deposits
Pecuniary claims payable Securities
Securities
Stocks
Other securities
Loans
Loan on deeds
Other assets
Prepaid expenses
Accrued revenue
Agency account receivable
Other assets
Tangible fixed assets
Building
Land
Lease assets
Other tangible fixed assets
Intangible fixed assets
Software
Lease assets
Other intangible fixed assetss
Guaranty endorsement
Allowances for bad debts
Total assets
End of FY2014 End of FY2015 End of FY2016
(Result)
(Estimated)
(Planned)
53,041
1
53,039
－
2,062
2,030
32
48,142
1
48,140
319
7,727
2,030
5,697
16,398
1
16,397
647
7,727
2,030
5,697
2,562,758 2,643,720 2,710,720
12,946
12,249
12,327
265
149
0
11,272
10,640
10,840
529
529
529
879
929
956
33,378
33,471
33,439
8,051
8,013
8,067
24,987
24,987
24,987
197
326
239
141
144
145
2,254
2,473
2,374
2,103
2,076
2,224
50
34
19
100
362
130
2,426
3,358
4,198
-23,484
-27,858
-32,969
2,645,382 2,723,605 2,754,864
Item
(Liabilities and equity)
Borrowed money
Loans payable
Bonds payable
Trust money
Other liabilities
Accrued expenses
Revenue received in advance
Lease obligations
Other liabilities
Reserve for bonuses
Reserve for directors’ bonuses
Reserve for retirement pensions
Reserve for directors’ retirement benefits
Acceptances and guarantees
(Total liabilities)
Capital
Retained earnings
Earned reserve
Total shareholders’ equity
(Total equity)
Notes 1. The balance sheet includes costs for projects other than those subject to the policy cost analysis.
2. Amounts of less than one million yen are rounded down.
Income Statement (Account for Agriculture, Forestry, Fisheries and Food Business Operations)
(Unit: million yen)
FY2014
FY2015
FY2016
Item
(Result)
(Estimated)
(Planned)
Ordinary income
Revenue from fund management
Interest on loans
Interest from repurchase agreements
Interest on deposits
Other interest received
Revenue from service transactions, etc.
Other service revenue
Revenue from government grants
Receipts from the general account
Receipts from the special account
Other ordinary income
Recoveries of write-offs
Other ordinary income
Ordinary expenses
Financing cost
Interest on call money
Interest on borrowed money
Interest on bonds
Expenses for service transactions, etc.
Other service expenses
Other operating expenses
Amortization of bond issue expenses
Business expenses
Other ordinary expenses
Provision of allowance for bad debts
Loan amortization
Other ordinary expenses
Ordinary profit
Extraordinary profits
Revenue due to resignation from acting for the Employees' Pension Fund
Extraordinary loss
Loss on retirement of fixed assets
Impairment loss
Net profit
47,313
39,329
39,312
2
14
0
27
27
6,326
6,300
26
1,629
1,239
390
57,064
31,910
3
28,475
3,432
3,430
3,430
44
44
15,079
6,598
6,272
117
208
-9,750
9,763
9,763
13
12
0
－
55,976
36,877
36,857
2
14
3
40
40
17,274
17,240
33
1,784
1,310
474
55,973
30,248
2
26,977
3,268
4,059
4,059
61
61
17,193
4,410
4,373
37
－
3
－
－
3
3
－
－
(Unit: million yen)
56,583
37,397
37,379
2
11
3
54
54
17,456
17,420
36
1,674
1,200
474
56,548
30,779
－
27,580
3,198
3,507
3,507
60
60
17,089
5,111
5,111
－
－
35
－
－
35
35
－
－
Notes 1. The income statement includes costs for projects other than those subject to the policy cost analysis.
2. Amounts of less than one million yen are rounded down.
Total liabilities and equity
End of FY2014 End of FY2015 End of FY2016
(Result)
(Estimated)
(Planned)
2,015,005 2,066,976 2,099,878
190,964
210,969
204,972
30,562
31,514
32,056
10,613
7,637
6,827
6,476
5,930
5,304
6
11
14
263
389
280
3,865
1,307
1,227
562
598
598
7
7
7
10,971
10,619
10,349
25
28
－
2,426
3,358
4,198
2,261,138 2,331,709 2,358,887
381,588
389,239
393,320
2,655
384,243
384,243
2,655
391,895
391,895
2,655
395,976
395,976
2,645,382 2,723,605 2,754,864