Seminar Lecture in Taiwan (February 2008)

　 Japanese Agricultural Policy Reform Coping with

Globalization　　　　　　　　　 　 Masayoshi Honma

New development in Japanese agricultural policy

• Introduction of direct payment: Targeting large farms• Rice production control: Increases in the role of JA• Changes in Minster of MAFF: Scandal issues• Ruling LDP lost in Upper House election in July 2007:

Revival of farm protection policy• Rapid decline in rice price: Need of structural reform• Demand for bio-fuel: high price of feed grain• Contaminated dumplings from China: led to food self-

sufficiency issues

Problems to be solved in Japanese agriculture

• Establishing agricultural policy coping with the globalization through WTO and FTA

　 → to prepare for declines in tariffs and to promote product differentiation

• Reconsideration of the direct payment policy coping with structural reform in agriculture

　 → to give large farms incentives to enlarge their operation scale and to grow their management skill

Agricultural import of Japan

0

100

200

300

400

(輸

入数

量指

数)

1970 1980 1990 199519961997199819992000 ( 年 )

350(2000年

)

Import Quantity Index(1970年＝ 100）

Doha RoundDoha Round(2001(2001 ～～ ))

Tokyo Tokyo RoundRound

(1973(1973 ～～ 79)79)

Uruguay RoudUruguay Roud(1986(1986 ～～ 94)94)

Kennedy Kennedy RoundRound

(1963(1963 ～～ 67)67)

出典：農林水産省配布資料

出典：農林水産省配布資料

Current WTO negotiation on agriculture

• Exporters VS ． Importers → Developing countries VS ． US+EU

• G4 (EU, US, Brazil and India) is the mail player • S&D treatment for developing countries is important• Influence of Japan and other importers declined• Emergence of African counties’ power: cotton initiatives • Modality for market access: the larger the current tariff

is, the larger the reduction rate will be

Proposal by the Chair• Average 54% or more reduction in the layer-wise

reduction formula: hard to accept for Japan • Sensitive product box is 4-6% of tariff lines: Japan

insists more than 10 %

　 note: # of tariff lines in Japan: rice (17), wheat (20), dairy products (20), sugar (56)

• Abolishing Special Safe Guard: Japan insisted increase in number of SSG

• Leaving the issue of capping tariff for the negotiation: 　 most important issue for Japan

Importance of FTA for Japan

• Enlarged EU on the west, Greater America for FTAA, and how about in Asia?

• Demerit increased to be out of the FTA network in the world

• Rapid development of Korea for FTA with US and EU

• Toward Asian Community in the future and the leadership of Japan

Rapid changes in world food economy

• Rapid increases in demand in BRICS for high quality foods:

Japan tends to lose in buying competition• Rapid increases in demand for bio-fuel: Soaring grain prices damaging dairy and livestock

farmers• Global warming and climate changes: Unstable production with changes in production

patterns and frequent floods and draughts

Food self-sufficiency ratio in Japan　　　　　

In calorie base 79%(1960 ） -->53% （ 1980)

-->40% （ 2000 ） -->39% （ 2006 ）

　 Self-sufficiency ratios for selected Japanese dishes:

Pork cutlet don (50%), Curry rice (49%), Beef don (46%), Yakitori chicken (27%), Tempura (23%),

Hamburg (12%), Ramen (3%)

Food security issue in Japan-Can we survive in stopping food imports?-

(1)Yes, with 4.67 million hectares of current farm land to supply 2020 kcal per person per day

(2) But how to operate production and distribution effectively?(3) It is not a food or agricultural issue but the national security issue(4) The most important is to secure the energy supply in advance of f

ood supply 　　 -The menu of daily food with 100% self-supply (2020 kcal)-

Breakfast: a cap of rice, a sweet potato, some picklesLunch: two pieces of potatoes, boiled potatoes, a piece of appleSuper: a cap of rice, baked potatoes, a piece of fish 　　　　　　　　　　　　　　　 + udon (every 2days), miso soup (every two days), natto (2 in 3days)milk (every 6days), eggs (every 7days), meat (every 9days)

Agricultural policy reform coping with globalization

• Reduce the price gap between domestic and import food with product differentiation

• Look for the comparative advantage of Japanese agriculture

• Liberalize the agricultural labor migration• Secure the food supply through FTA arrangement• Technical assistance in developing countries, in

particular for the SPS issues• Establish a forum for Common Agricultural Policy in

Asia