Japan Institute for National Fundamentals

Speaking out

Taro Yayama

【#183】 Japan’s Farm Lobbies Sticking to Vested Interests

Taro Yayama / 2013.03.06 (Wed)

March 4, 2013

       Prime Minister Shinzo Abe seems to have decided Japan's participation in the Trans-Pacific Partnership free trade negotiations. Since before last December's House of Representatives election, the Liberal Democratic Party, which gained power in the election, has vowed to refrain from taking part in the TPP talks as far as the elimination of tariffs without exceptions is the premise of the talks. As a matter of course, any agreement without exceptions never exists. It was natural for Prime Minister Abe and U.S. President Barack Obama at their talks last month to confirm that there would be exceptions. In an agreement with Australia, the United States has already declined to liberalize sugar and dairy products imports. Akira Banzai, chairman of the Central Union of Agricultural Cooperatives known as JA-Zenchu, has vowed his "absolute opposition to the participation in the TPP negotiations" because the participation is expected to force JA-Zenchu and the National Federation of Agricultural Cooperative Associations, or JA-Zenno, to implement their far-reaching reform.

Integrate small farmlands
       Given its agricultural knowhow, and soil and water quality, Japan is one of the most suitable countries for farming in the world. Some people cite small farmland sizes as the reason for the Japanese agriculture's lack of international competitiveness. But this represents their reasoning for opposition to agricultural liberalization. Japanese farming families cannot make money by producing rice on only 1-to-2 hectare farmlands. There are many farming families that achieve 20 million to 30 million yen in annual sales by producing vegetables, fruits or flowers instead of rice on such small-sized farmlands.
       Producing rice on 1-to-2 hectares of lands are only part-time and elderly farmers. What the central government should do now is to lead local governments or other public organizations to hire these small-size farmlands just before being deserted and allow each farming family to use 20-to-30 hectares of farmlands for rice production.
       The number of farming households totaling 2.6 million in Japan now is expected to decline by 700,000 in the coming five years according to the trend of the statistics. As urban resident sons and daughters of elderly farmers would not produce rice on inherited rice paddies, the total deserted arable land area is likely to increase rapidly from 400,000 hectares at present.

Agriculture cooperatives seeking to defend themselves
       It may be too late to improve the situation. The reason the situation has been left untouched is that agricultural cooperatives have existed. The government should have gone so far as to integrate some 10 farming families' small-size farmlands into a large-size one for each younger family. But such reform could have reduced tractor sales by agricultural cooperatives. A cooperative that had sold 10 tractors worth 3 million yen each might have to see sales falling to only one if farmlands are integrated.
       Rice production costs total 15,000 to 16,000 yen per 60 kilograms for families with small-sized farmlands. But the costs slip below 5,000 yen for those with farmlands measuring 20 hectares or more. Agricultural cooperatives can receive high commission by maintaining rice prices at high levels and are reluctant to see rice price drops. This is the reason 60% of rice paddies are subjected to rice production halts.
        The biggest problem with Japan's agriculture is the government policy failing to lead farming families with small-sized lands to give up rice production. If the policy is corrected, agricultural cooperatives may lose their raison d'etre. If Japan joins the TPP agreement, the JA mutual-aid insurance system may no longer be able to handle life, property and casualty insurances at once. For the sake of its own survival, JA-Zenchu is opposed to Japan’s participation in the TPP talks.
Taro Yayama is Director, Japan Institute for National Fundamentals, and a political analyst.