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October 25, 2013

Strategic Possibilities for Japanʹs Agriculture
By SHIMADA Haruo
Japan has now been in a position to participate in full-fledged negotiation on TPP
since its talks in Malaysia in July. With regard to TPP, supporters argue that TPP
enables Japan to participate in a multilateral free-trade zone on an unprecedented scale,where it can accelerate its export of industrial products as its competitive edge, andwarn against non-participation for fear of vast disadvantage Japan might incur,
whereas opponents argue that Japan might be exposed to offensives from abroad andsuffer severely in such areas as agriculture, medical service and insurance. Especiallywhen it comes to agriculture, there is deep-rooted criticism that trade liberalization
would bring high-priced agricultural products symbolized by rice into steep competition
with foreign competitors, which would reduce production and employment considerably.
Pro-TPP Abe administration is now studying various support measures to enhance
Japan's agricultural competitiveness.
This article aims to throw into relief structural strain of current Japan'sagriculture, to indicate measures to enhance dramatically Japan's agriculturalcompetitiveness through drastic reform and to urge those concerned with agricultural
policy to reconsider.
With regard to Japan's agriculture, the Japanese government has long warned
about the low self-sufficiency rate of 40% which might endanger Japan's food security
and about the successor issue of the farmers and a small number of new entrants into
the business, which would bring about aging and erosion of the farming population.
However, there are significant deviations between these two propositions and the actual
fundamental facts. The self-sufficiency rate of 40% is calculated merely on a calorie
basis and is focused only on grains, excluding vegetables, fruits and animal products.
Rice accounts for 40% of the self-sufficiency rate in grains and the rest of it is mainly
occupied by imported grain for feed for livestock. Of the total price of agricultural
products of ten trillion yen, that of rice accounts for only two trillion yen. And taking
into account the 100% self-sufficiency rate of vegetables, 90% of fruits and 70% ofanimal products, we must admit that Japan's food security has already been fully
secured. Incidentally, Ministry of Agriculture, Forestry and Fisheries of Japan defines

livestock fed on imported feed as non-domestic, but this is nothing but delusive
sophistry.
While erosion of farming population has been seen as a problem, Japan's farming
population accounts for 1.6% of the total population, to be contrasted by 0.8% of UK,
whose food sufficiency ration is twice of Japan, and 0.9% of the United States, thebiggest export-oriented agrarian country. That is to say, Japan's farming population isstill excessive. Of Japan's total farming population, the number of commercial farming
households is 1.65 million, of which 1.35 million are tiny aging farming households withless than 1 million yen of annual income from rice crops. The majority of tiny aging
farming households are members of Japan Agricultural Cooperatives, historically apowerful voting bloc for LDP, who have been tragically obliged to maintain thestatus-quo with no prospect for higher productivity. The average age of these farmers
now approximates 70 and it is a pity that they have to continue to work hard under thesame old condition. In order to improve this situation drastically, I would like to propose
the following.
The current rice acreage reduction policy must be abolished and cropping andproduction should be liberalized. This would increase production by large-scale as wellas corporate farmers, which should lead to higher productivity and reduced price in rice
crops, thereby enhancing international competitiveness. On the other hand, tiny aging
farming households burdened by the successor issue, should be duly encouraged tomove to other socially welcomed activities of their choice, and the government will
provide them with some assistance to make their choices more significant.
Those activities include, for example, agriculture for health, agriculture foreducation, agriculture for environment and agriculture for tourism. Agriculture forhealth means cultivation as a hobby in a minimum farmland in the vicinity of theowners' residence in order to maintain their health according to their physical condition.
It is conceivable that those who choose to engage in this type of agriculture be paid someextra amount of money over their current farm pension.
Agriculture for education is described as follows. In most financially struggling
dual-income households, breakfast is not properly prepared for the children, causing
nutritional imbalance, declining physical strength and nutritional disorder. Thesechildren may as well be left in the care of farming or fishing families in exchange for amonthly fee of twenty or thirty thousand yen. The caretaking farmers could create someincome by taking care of several children, receiving gratitude. Those farmers whoengage in land conservation in remote mountainous areas should be provided with someamount of subsidy as benefits for participation in agriculture for environment. Besides,
agro-tourism as a participation-type of agriculture for tourism should be promoted.
These types of agriculture should be distinguished from commercial farming and beexcluded from agricultural statistics.
In doing so, Japan's agriculture, already renowned for its high quality, could also
be improved in productivity, leading to reduced price and enhanced international
competitiveness. Also, tiny aging farming households are detached from statisticalelement and macro productivity should be significantly enhanced. Those concerned withJapan's agricultural policy should promptly study policies as above described.

(This is the English translation of an article written by SHIMADA Haruo, President,
Chiba University of Commerce, which originally appeared on the e‐Forum ʺGiron ‐Hyakushutsuʺ of GFJ on July 30, 2013.)