CEAC Commentary introduces outstanding news
analyses and noteworthy opinions in Japan, but it
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January 12, 2007

Agriculture can be positive factor
By SHINDO Eiichi
In forming an East Asian Community, agriculture’s positive role should be given greaterattention. Rather than being an obstacle to regional integration, farming can complement efforts
toward unity. Based on this contrarian view, we need to craft a common agriculture policy forEast Asia, a region with mature markets yet with many unresolved tasks in the way ofdevelopment. Dismantling tariff barriers should be an important part of a common regional farmpolicy.
Agriculture is the biggest roadblock to an East Asian Community. Pessimists cite gaping pricegaps in farm products among countries in the region, with nations like Japan and South Korea
enjoying high national income on one hand, and China and other developing nations on the other.
Naysayers contend that Japan, South Korea and other high-cost countries would inevitably haveto slap high tariffs on farm imports, and that would obstruct the formation of an East AsianCommunity.
However, it must be noted that the international structure surrounding various farming issues isundergoing fundamental change along with the progress of the global information revolution;
agriculture may be a stumbling block for East Asia’s integration but it has the potential tocomplement the move toward union.
My first argument for agriculture’s positive role is that amid the ongoing information revolution,
agriculture and other primary industries, just like secondary industries, are expected to turnincreasingly knowledge-intensive and take on the character of tertiary industries; this process
will accelerate as they reap the benefits of the information-processing and high-techenvironment.
An era has arrived in which every package of cucumbers or potatoes carries a label identifying
the grower and farm, as farmers compete to impress the consumers with the safety and quality of
their produce. Such competition promises to change plain produce into knowledge-intensive,distinctive products. Some produce is already finding growing markets not only in Japan but
overseas as well, including for apples grown in Aomori Prefecture.

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In fast-developing East Asia, consumers, centering around a growing middle class, are taking a
fancy to quality foods produced by what looks more and more like a tertiary industry. This, andthe fact that people in the region share a similar food culture, brings us closer to a common
agricultural market in Asia.
Multinationals
The second reason farm policy can be a catalyst for regional integration is that the information
revolution is promoting cross-border production by multinational corporations. The emergenceof agribusiness is leading to develop-and-import arrangements involving countries in Southeast
Asia and China. Under this formula importers do not simply purchase ready-made farm products
but get involved in production in some way, contributing to a closer link between grower andconsumer.
Except for grains, which are imported in bulk, most foreign food products reach the Japanese
consumer under what are called develop-and-import schemes in which Japanese companies setup production bases in Asia and elsewhere from which they export farm products to Japan. Of
Japan’s total foreign direct investment, Asian operations that count Japan as an important export
market stood at 21% in the early 1980s but soared to over 70% in 2001. In particular, Japan’sfisheries and food-production companies have a significant presence in Asia; the region
accounts for 40-50% of their foreign investment.
Along with its foreign investment, Japan’s food imports have surged since the late 1980s. They
now top $70 billion annually, up from a mere $10 billion in 1975. And Asia has become a major
source of these imports, accounting for 37.2% of the total in 2005. For Asia as a whole, Japan
has become the destination for more than 30% of food exports, compared with 14.5% in 1970.
These figures show that Japanese cannot talk about food without considering Asian foodproducers. This interrelationship has been strengthened even more by rising productivity andself-sufficiency of Asia’s agriculture thanks to the introduction of advanced farm technology
from abroad as well as to freer movements of capital.
As a third reason, I would emphasize that agriculture’s other functions, such as protecting theenvironment, making up the natural landscape and preserving traditional cultures, are beginningto win recognition.
Environment friendly
The trigger for such a positive evaluation of agriculture is heightened environmental awarenessbecause agriculture can also contribute to global warming and other environmental degradation.
For example, raising livestock to meet growing demand for meat requires increased productionof animal feed, which in turn means greater consumption of fossil fuels. Under thesecircumstances, Asian agriculture should attract interest because it is thought to be easier on theenvironment.

2Agriculture in Europe and Asia is small in scale compared to the U.S. and Australia. The average
size of a U.S. farm is 191 hectares (472 acres). The comparable figure is 15 hectares for
European Union countries, 1.59 hectares for Japan, 1.49 hectares for South Korea and 0.17
hectare for China.
Those subscribing to the economies of scale principle argue that European and Asian farmers
should pursue efficiency by increasing the scale of their operations. Addressing inefficiency iscertainly important, but more important in the 21st century is building a sustainable society. In
this sense, Japan and other Asian countries would do well to put the preservation andstrengthening of these multifaceted features of agriculture at the center of their farm policy.
They would be encouraged to tighten cooperation with EU countries, which are their role modelin terms of environmental conservation. East Asia should strive to formulate a common
agriculture policy compatible with development of a sustainable and less environmentally
onerous society.
In this connection, mention should be made of growing interest in biomass – plant materials andanimal waste used as fuel – as a means to combat global warming. One promising application of
biomass is cars that run on ethanol produced from corn, sugarcane and other crops. Vigorous
efforts are also under way to develop other biomass-based alternative energy sources.
Biomass fuelJapan already has in place the Biomass Nippon Comprehensive Strategy, an initiative launchedin 2005 by the Ministry of Agriculture, Forestry and Fisheries for reducing the nation’s carbon
dioxide emissions. The initiative envisions biomass-derived fuels replacing one-third of thecurrent gasoline usage and reducing annual carbon dioxide emissions by 7.5 million metric tons.
A strategy to harness energy sources friendly to both humans and the environment, including
biomass and wind power, would spread from Japan to South Korea as well as to other parts ofEast Asia, crystallizing in due course as a common agriculture-energy policy.
The low productivity of Asia’s farms and lingering fears of food shortages are spurring the drive
toward regional integration. In the mid-1990s, massive forest fires hit Indonesia under abnormal
climactic conditions, triggering a food crisis in that country. The disaster led Indonesia and othermembers of the Association of Southeast Asian Nations (ASEAN) to begin exploring thepossibility of creating a regional food security arrangement.
Food security
At their summit in 1997, ASEAN leaders adopted “ASEAN Vision 2020” to commit the regional
body to food security and to strengthening the international competitiveness of their agriculture,forestry and fisheries industries. The basic principles were reaffirmed in 1999 at the summit ofASEAN+3 (Japan, China and South Korea).

3Concrete progress has been made since then. The first meeting of ASEAN+3 farm ministers
produced the East Asia Rice Reserve System and the ASEAN Food Security Information System.
Under the EARRS initiative, the emergency rice stockpile has been expanded and anarrangement has been put in place so rice can be supplied to the region’s people in need.
Thailand has become host to the newly created AFSIS Center, whose purpose is to help
ASEAN+3 members to foster human resources and exchange information on food security.
When discussing food security, China inevitably grabs our attention, as it did withenvironmental activist Lester Brown, head of the Earth Policy Institute, who wrote a book titled,“Who Feeds China?” An estimate by the Organization for Economic Cooperation andDevelopment says that China, hard-pressed by food shortages, will be forced to import 40-50
million tons of grain in 2020, straining food supplies not only in Asia but on a global scale.
The impact of China, the world’s largest grain producer, emerging as the world’s largest foodimporter will deal a heavy blow to Japan, now the world’s top food importer. The upshot: BothJapan and South Korea will suffer food shortages, with especially short supplies of animal feed
and livestock products.
Meanwhile, the globalization of agriculture poses greater risks of meat contamination, caused bydiseases like bovine spongiform encephalopathy, known as mad cow disease, andfood-and-mouth disease. Risks of acute infectious diseases, including avian flu and severe acuterespiratory syndrome (SARS), may also increase. These diseases present us with nontraditional
security issues, and I would propose that Japan take the initiative on the following fronts tominimize the effects of the anticipated risks on East Asia.
Modernization
First, build an East Asia food industry community on the basis of Japan’s cutting-edge
agricultural technology and its abundant financial resources. The community would offer
technical assistance to those countries of the region with lower agricultural productivity,including China, Vietnam and Thailand. The primary aim in doing so is to modernize East Asia’s
farm industry and raise the region’s self-sufficiency in food.
Second, as soon as possible bring the entire region under the framework of free trade andeconomic partnership agreements. Such agreements would encourage countries in the region toopen their borders wider to the flows of not only merchandise and money but manpower andtechnology as well. These developments in turn would inspire countries to hasten structuralreform of their own domestic economies.
Third, offer cooperation to the poorest, least-developed agricultural areas of the region, which
are often victimized by the recurrence of acute infectious diseases. Japan’s helping hand canimprove their environmental, hygiene and healthcare conditions and also raise the level of4

less-developed countries’ fragile governance. Japan thus can show an example that if wellcoordinated among the countries of East Asia, the region’s common agriculture, environment
and energy policies can also effectively cope with nontraditional security risks, which also
include international terrorism and piracy.
It goes without saying that Japan, if it is to lead the move toward forming an East AsianCommunity, must also take the lead in knocking down its protectionist barriers to agriculturaltrade.
(This is the text of an article by Prof. SHINDO Eiichi, Professor Emeritus of the Universityof Tsukuba and Member of the Council on East Asian Community, which originallyappeared in the “Opinion” column of the “Nikkei Weekly” on November 27, 2006)5