banking on rice kay shimizu july 31, 2015 at ritsumeikan university
TRANSCRIPT
Banking on RiceKay ShimizuJuly 31, 2015 at Ritsumeikan University
Japan’s opposition to TPP portrayed as farmers’ opposition
Government promised to protect 5 sacred products, the most important being rice
In fact, many farmers don’t care1. The price difference between Japanese rice and foreign rice has disappeared
disappeared Japanese rice
California rice
Chinese rice
Rice prices / 60 kg
In fact, many farmers don’t care
2. Most (rice) farmers are part-time farmers farming 30 days per year (per 1000 sqm)
In fact, many farmers don’t care
3. Farmers don’t depend on the price of rice
Income of farm households
Income from agriculture
Total income of farm householdsIncome of farm
households vs non-farm households
Protection of rice has not been effective
Japanese production of rice has gone from 12 million tons in 1994 to 8 million tons in 2012
High tariffs ineffective against the aging of farmers and declining population
In fact, Japan is overproducing rice In order to export rice and other agricultural
produce, TPP is ideal for opening the gates to foreign markets
Who actually opposes TPP?
Unlike the Uruguay Round, according to a Kyodo survey, 45% of primary sector workers opposed TPP, while 17 % supported TPP
Full-time farmers support the TPP Direct payments to farmers should adequately
compensate the losers BUT, no talk of such alternative policies Farmers are not opposed to TPP, but Japan Agricultural
Cooperative (JA) opposes TPP, because JA survives on the administrative fees for selling rice and other farm products
JA Bank, one of Japan’s largest banks
JA = Japan Agricultural Cooperative Part of the JA Group, the only coop or legal
entity in Japan allowed to operate both a bank and an insurance company have two-tiered membership giving part-time
farmers membership
Number 2 in deposits (50 trillion yen in 2014), roughly the size of mega-bank Mizuho Bank
83 billion yen (in 2014) in total assets
The price of rice supported by Japanese people = 1 trillion yen
Gentan – decreases rice acreage 400 billion yen as subsidies
Tariffs – prevents the entry of “cheaper” foreign rice
High prices – consumers pay artificially high prices despite decreasing demand 600 billion yen in additional costs
Where does all this money go???
Japanese agriculture left behind
High rice prices allow part time farmers to stay put Full time farmers cannot expand their land to become
more efficient and profitable Planting alternative crops (gentan) keeps rice paddy
production low Decreases food self sufficiency by
Decreasing the acreage of rice by 30% Decreasing the production of rice by 5 million tons Increasing the import of wheat by 7 million tons
# of farmers declining, but JA membership increasing
Farm households
JA full members
JA part-time members
High rice price allows part time farmers to remain farmers = JA members
Breakdown of farm household incomes
Pensions, subsidies
Non-agricultural income
Agricultural income
The mission of The Norinchukin Bank is to fully support Japan’s agricultural, fisheries and forestry industries as the national-level organization of JA Bank Group, JF Marine Bank Group and JForest Group. Through this support, the Bank contributes to the development of food production and consumption and a better quality of life for the people living in local communities.
Does the financial economy support the productive economy?
JA Bank propped up by high rice prices High rice prices propped up by
Trade barriers preventing the entry of “cheaper” foreign rice
Taxpayers subsidizing farmers NOT to plant rice
Consumers paying high prices for rice
JA Bank rich in deposits from part time farmers JA Bank increasingly earning profits beyond Japanese
borders JA Bank’s Japanese government bonds holdings decreasing
Who profits? JA Group… uses funds to lobby for trade barriers…
END
JA Group, and JA Bank, built by Japanese taxpayers and consumers
JA Bank system
Why does JA Bank flourish as Japan’s agriculture weakens?
The number of farmers are decreasing rapidly
Average age of farmers 69
Increasing abandoned farmland
How can JA Bank, the main bank of farmers, continue to flourish?