Japanese Agricultural Reform :Overview and assessmentYoshiaki IiguniGraduate Schoolof Kuroshio Science Kochi University

Purpose of this reportoutline the Japanese agriculture and the problemsoverview upcoming agricultural reformssummarize the discussion on the reform

Japanese agricultural situation

The working population in agriculture (million) (A)Agricultural area (million ha) (B)(B)/(A)Percentage of Agri. Budget*Percentage of GDP of primary industry Income per capital (US$)*Japan2.044.7622.33 2.41.528,733(3.0%)(12.4%)Germany0.8116.96720.95 4.60.928,863(2.0%)(33.6%)UK0.4916.97534.64 1.60.833,432(1.6%)(70.7%)CH0.15*1.52510.17 -0.8-(4.1%)(37%)Korea1.832.951.61 7.53.014,055(7.2%)(18.7%)TW**0.640.841.31 -1.815,690(6.6%)(23.4%)

MAFF (2007) Pocket edition statistics on agriculture, forestry and fishery. The statistics are in 2005.*)FAOstat et al, http://www.maff.go.jp/kaigai/gaikyo/ The statistics are in 2002.**) Lin, K.C. and Y.H. Chen (2006), The future challenge of agriculture policy in Taiwan. The statistics are in 2004.Agricultural area includes area of arable land, permanent crops and permanent pasture so on.

Problem 1: The low level of food self-sufficiency ratio

Problem 2: The size of farming (ha)

RiceWheatBeanPotatoCerealVegetableFruitsFlowerWheatMilkCattlePigFig. Production share of product by farmhousehold type

Business farm household Semi-business farm household Side-business farm household

Problem 3: Aging of key agricultural workers Job is main activity

Estimation of the number of key agricultural workers(10,000)20002010

Problem 4: Expansion of abandoned land

Graph1

1312.7

1232.5

1352.9

2174.7

2445.6

3438.1

3869.7

abandoned land (ha)

the ratio of abndoned land (%)

1000ha

%

Sheet1

agricultural landabandoned land

1960607

1965600

1970580

1975557

1980546

1985538

199052422

199550424500

200048334470

Sheet2

yearabandoned land (ha)the ratio of abndoned land (%)

19751312.7

19801232.5

19851352.9

19902174.7

19952445.6

20003438.1

20053869.7

13.1

12.3

13.5

21.7

24.4

34.3

38.6

Sheet2

00

00

00

00

00

00

00

&A

Page &P

abandoned land (ha)

the ratio of abndoned land (%)

ha

%

Sheet3

Problem 5: Boarder Policy of Rice tariff-rate quota (TRQ) systemQuantityImport priceImport with Tariff M.A with zero tariffMark upTariff(341yen/kg)Upper limit of mark up

Introduction of direct payment in Japan (2007)Measures for Farm Management Stabilization (MFMS) Measures related to Rice Policy Reform (MRPR) Measures to Conserve and Improve Rural resources (MCIR)

Purpose of measures

Measures for Farm Management Stabilization (MFMS)Direct Payment for Land-extensive farming (DPL) Measures for Mitigation of Revenue Fluctuation (MMRF)

Measures for Farm Management Stabilization (MFMS)Direct Payment for Land-extensive farmingMeasures for Mitigation of Revenue Fluctuation

Eligible farmers Certified farmers as core-farmer > 4ha (> 10ha in Hokkaido) Village farming collective > 20ha

Measures related to Rice Policy Reform (MRPR)Measures to Create Producing Areas (MCPA) Grant to create production area Grant for securing basis of rice farming income Grant for fixing a new system of adjusting the supply and demand

Measures to Conserve and Improve Rural resources (MCIR)

Direct payments to Common activitiesDirect payments to environmentalfarmingLocal communityFarmers group

Features of direct payment in Japan

Eligible farmers Certified farmers as core-farmer > 4ha (> 10ha in Hokkaido) Village farming collective > 20haMeasures for Farm Management Stabilization (MFMS)

Features of direct payment in Japan

Measures to Conserve and Improve Rural resources (MCIR)

Direct payments to Common activitiesDirect payments to environmentalfarmingLocal communityFarmers group

Features of direct payment in Japan

Direct Payment for Land-extensive farming.

The number of application and the area of Direct Payment for Land extensive farming(F.Y. 2007)

The number of application of Direct Payment in MCIR(F.Y. 2007)

Discussion on the reformRange of targeted farmersrestrictiveNon-restrictiveSelf sufficiency ratio as a political objectaffirmativenegativeThe current reformCritical groupBig BangSource: Y. Tashiro

A critique by Professor Kajii

Concluding remarksIt should be appreciated that Japanese government introduced original direct payments based on its agricultural structure in the reform. The direct payments are not just duplicated measures of European countries.But, the measures are government-led, though the government emphases on the importance of market-led measures.The government led measures might not be able to achieve efficient resource allocation (see. Kajii).We should improve the measures, and design more market-oriented programs.