Publication of "Third-Party Business Succession Guidelines for Agricultural Corporations" and "Collection of Third-Party Business Succession Cases in Agriculture"

Daiwa Food & Agri Co., Ltd. (President and CEO: Kazunori Hisaeda, hereinafter "the Company"), a wholly-owned subsidiary of Daiwa Securities Group Inc. (Representative Executive Officer and President: Akihiko Ogino), was commissioned by the Ministry of Agriculture, Forestry and Fisheries for the "FY2025 Business Development and New Farmer Promotion Commissioned Project, specifically the Third-Party Business Succession Guidelines Formulation and Research Project." As the secretariat for this project, the Company was involved in the creation of the "Third-Party Business Succession Guidelines for Agricultural Corporations (hereinafter 'the Guidelines')" and the "Collection of Third-Party Business Succession Cases in Agriculture (hereinafter 'the Case Studies')," which have now been published.

1. Background

The average age of core agricultural workers in 2025 is projected to be 67.6 years, indicating an advanced aging trend. Many farmers are expected to retire within the next few to 10 years. In this context, as business entities and farmlands without successors are anticipated to become apparent in various regions, securing local agricultural leaders through third-party business succession, including attracting private companies from outside the region, is becoming increasingly important.

On the other hand, in the agricultural sector, there is a shortage of stakeholders with expertise in third-party business succession, and the support system is not yet fully established.

Therefore, the Guidelines and Case Studies were formulated with the aim of fostering and securing support organizations and experts who provide third-party business succession support, and establishing a system to promote smooth third-party business succession.

The Company conducted case studies on third-party business succession through the commissioned project and created drafts of the Guidelines and Case Studies based on these findings.

2. Overview of the Guidelines

The Guidelines provide practical guidance for appropriately and smoothly promoting third-party business succession, which involves transferring the management of an agricultural corporation to a third party other than relatives or employees. In addition to systematically organizing the overall process of third-party business succession, it offers practical explanations that take into account the unique circumstances of agriculture, such as due diligence specific to the agricultural sector.

Figure: Due diligence items specific to the agricultural sector

Source: Excerpt from the "Third-Party Business Succession Guidelines for Agricultural Corporations" published on the Ministry of Agriculture, Forestry and Fisheries website.

3. Overview of the Case Studies

Case studies of third-party business succession between corporations were compiled for various farming types, including land-use agriculture, facility horticulture, fruit trees, and livestock farming. They are organized from the perspectives of specific succession processes, key points for promoting succession, outcomes, and future prospects.

Figure: Contents of the Case Studies

Source: Left: Excerpt from the "Collection of Third-Party Business Succession Cases in Agriculture" published on the Ministry of Agriculture, Forestry and Fisheries website; Right: Partial excerpt from the "Collection of Third-Party Business Succession Cases in Agriculture" published on the Ministry of Agriculture, Forestry and Fisheries website.

4. Company Overview

Trade Name: Daiwa Securities Group Inc.

Head Office Location: 1-9-1 Marunouchi, Chiyoda-ku, Tokyo

Representative: Akihiko Ogino, Representative Executive Officer and President

Established: April 26, 1999

Business Activities: Control and management of group companies' business activities

URL: https://www.daiwa-grp.jp/

Trade Name: Daiwa Food & Agri Co., Ltd.

Head Office Location: 1-9-1 Marunouchi, Chiyoda-ku, Tokyo

Representative: Kazunori Hisaeda, President and CEO

Established: November 1, 2018

Business Activities:

Management and administration of farm subsidiaries

Marketing of agricultural products

Investments related to agriculture

Agricultural consulting

URL: https://www.daiwa-grp.jp/dfa/

5. Inquiries

Within the Daiwa Food & Agri Co., Ltd. website:

https://www.daiwa-grp.jp/dfa/contact/input

Under its management vision "2030Vision," Daiwa Securities Group will continue to strive for the creation of a prosperous future through financial and capital markets and the enhancement of corporate value, together with all stakeholders.

End

(Reference) Daiwa Securities Group's initiatives for sustainability:

https://www.daiwa-grp.jp/sustainability/?cid=ad_eir_sdgspress