Agricultural Reform (1)

Before I talk about TPP (Trans Pacific Partnership), let me explain Japanese policy briefly in terms of Japanese agriculture.

Target and plan

The Liberal Democratic Party (LDP) traditionally relied on the support of industries such as construction, agriculture, and postal services. These industries were also among the most heavily regulated and protected in the economy. Prime Minister Koizumi as outsider owed no debts to these industries. Thus, by pursuing reforms that opened these industries to competition to advance his economic goal of “reform without sanctuary”, Koizumi also weakened the base of rival politicians in the traditional wing of the LDP.

The agricultural reform was tied to another important initiative of the Koizumi government: promotion of Free Trade Agreements (FTAs) with various trading partners. The most serious hurdle for negotiating FTAs was domestic opposition from the agricultural sector that believed (rightly) that the high production cost makes the domestic products uncompetitive against the cheap foreign products. To prepare the Japanese agriculture for global competition, Koizumi tried to promote large-scale farming.

Promotion of large scale farming

Table A4-1 summarizes the major agricultural policies of the Japanese government from 2001 to 2010, including both the Koizumi government reforms discussed in this section and those of the subsequent governments that are described later.

Historically, Japan’s average farm size was remarkably low. The LDP protected the small farmers’ interests in exchange for their political support. While convenient for the farmers and the LDP, the result was an inefficient production system that led to higher food prices, especially for rice which was the most common crop.

The Koizumi government implemented several measures to promote large scale farmers. The government hoped that by removing the historical bias against large scale farming, productivity could increase and food prices could be reduced. In some cases, such as high quality rice and luxury fruits, there was hope that Japanese agriculture could become internationally competitive.

Government		Primary goal	Target of support	Implementation date	Policy (Political event)
LDP	Koizumi (Apr.2001-Sep.2006)	Respond to globalization	Large scale farmers	Apr. 2004	Major reform of rice production adjustment system
				Mar. 2005	Basic Plan for food, agriculture, and farm village
				Apr. 2005	Basic Strategy of agriculture and forestry marine products export promotion
				Jun. 2006	New subsidies to large scale farmers announced
				Apr. 2007	New subsidies to large scale farmers introduced
	Abe (Sep.2006-Sep2007)			Jul. 2007	(DPJ wins big in the House of Councilors Election)
	Fukuda (Sep.2007-Sep.2008)	Increase the food self sufficiency ratio	All farmers	Fall 2007	Purchase of rice to support rice price Expanded subsidies for furlough
	Aso (Sep.2008-Sep.2009)			Apr. 2009	Subsidies to production of rice for rice flour or feeding
DPJ	Hatoyama (Sep.2009-Jun.2010)			Apr. 2010	Direct payment income support system

Note: LDP stands for the Liberal Democratic Party of Japan.  DPJ stands for the Democratic Party of Japan. 




Sources 

Goudo, Yoshihisa., (2010), Sayonara Nipppon Nougyou, 128 -159.

ISBN978-4-14-088321-1

Ministry of Foreing Affairs of Japan

http://www.mofa.go.jp/mofaj/gaiko/fta/

Ministryh of Agriculture, Forestry, and Fishies

http://www.maff.go.jp/j/export/pdf/taisaku.pdf

Sekizawa, Yoichi.,

http://project.iss.u-tokyo.ac.jp/crep/pdf/rj/r13.pdf