AJISS-Commentary
The Association of Japanese Institutes of Strategic Studies
IIPSRIPSInstitute for International

The Japan Institute ofResearch Institute for

Policy Studies

International Affairs

Peace and Security

Editorial Advisory Board:

No. 186

Akio Watanabe (Chair)
Masashi Nishihara
Yoshiji Nogami
Taizo Yakushiji

18 October 2013

Editorial Committee:
Taizo Yakushiji
Hisayoshi Ina
Tsutomu Kikuchi
Shujiro Urata andToshiro Iijima
Editor & Online Publisher:

THE TPP AND THE
INTERNATIONALIZATION OF JAPANESEAGRICULTURE

Masayoshi Honma

Yoshji Nogami
President, JIIA

Japan participated in the Trans-Pacific Partnership(TPP) Agreement negotiations in July 2013 andthis has in part intensified discussions on reforming
domestic agriculture. TPP seeks liberalization not
only in trade in goods and services but also ininvestment. Tariffs are not a major problem in
sectors other than agriculture, and TPP
negotiations have in fact focused on topics
transcending trade, i.e., establishing investment
conditions and standardizing systems.

The views expressed in this piece are the author’s own and should
not be attributed to The Association of Japanese Institutes ofStrategic Studies.

AJISS-Commentary
The Association of Japanese Institutes of Strategic Studies

With many high-tariff commodities remaining in the agricultural sector,
however, tariffs are bearing the brunt of attention. Japan is looking to beexcluded from lifting tariffs on five agricultural commodities. In view of the trend
toward increasing globalization, though, even if Japan were to make it throughthe TPP negotiations with exemptions, it could not halt future demands for
substantial reductions in tariffs on agricultural products. Given that, it would bebetter to begin promptly on structurally reforming domestic agriculture within theTPP framework.
Agricultural reform was also a demand made in the GATT (GeneralAgreement on Tariffs and Trade) Uruguay Round Agreement on Agriculture
approved in 1993. This Agreement on Agriculture called for all non-tariff barriers
on agricultural goods to be tariffed; merely reducing the tariff levels themselves
was deemed inadequate. Substantive market opening was left to subsequentWorld Trade Organization (WTO) agricultural negotiations. Countries around theworld were asked in the meantime to proceed with domestic agricultural reform
so that the sector would be able to withstand negotiations on substantial tariff
cuts.
Japan’s agricultural production has fallen off by 3 trillion yen over the past
20 years and remains in a steady downtrend, but the country has achieved
sufficient international competitiveness in fruits and vegetables, an area thatearly on saw tariffs lowered or eliminated. Protected by high tariffs as well as arice paddy reduction program that hinders free-market remedies, however, rice
is a symbol of the decline of Japanese agriculture.
Rice cultivation is now done in piecemeal fashion on scattered ricepaddies, making effective land use a near impossibility. The movement ofmachinery and laborers among fields alone causes expenses to mount.
However, consolidating farmland and introducing varieties with high yield perunit area would substantially reduce the production cost of rice. Indeed, thegovernment has announced a target of cutting production costs by 40%. If thiswere to be achieved, full-scale export of rice might become possible in future.
At the same time, modern agriculture that leverages Japan’s agricultural
technology capabilities should also be fostered for vegetables, fruit trees andhttp://www.jiia.or.jp/en/commentary2

AJISS-Commentary
The Association of Japanese Institutes of Strategic Studies

other horticultural crops. Forming food and farming clusters would be a good
way of boosting international competitiveness. This would entail laying thefoundations for concentrating food product companies and university and otherrelevant research institutions in specified areas, and creating new added value
and innovation through mutual collaboration and competition.
The Netherlands is an advanced country internationally in terms of foodand farming clusters, and the municipality of Wageningen is even known as“Food Valley.” Japan should not only develop its own Food Valley for horticultural
crops but also a Milk Valley of dairy farmland and a Beef Valley of beef producing
areas in line with local conditions. If we can form cross-company andcross-industry growth centers by making use of the materials and humanresources in particular communities and collaborating with research institutions
and companies rooted in these communities, we can unquestionably set thestage for local invigoration and development.
Structural reform of Japanese agriculture is an urgent issue, regardless ofTPP. It would be advisable to undertake domestic reform in the direction ofreducing/lifting tariffs, including those on rice, for the sake of the long-term
development of Japanese agriculture. It is also essential for Japan to receive asufficient grace period before the lifting of tariffs in the TPP negotiations, and forthe government to present a progress schedule of measures needed until theabolition of tariffs and to provide support to farmers as they prepare to take on
the challenge of international markets.
As agricultural groups such as JA (Japan Agricultural Cooperatives) arestrongly opposed to TPP, it is not easy for the government to implement drasticpolicies for agricultural reform despite a series of policies recently introduced toinduce young people to take up farming and to enlarge the scale of farmoperation. But it would be the last chance to make Japanese agricultureinternationally competitive. It depends on strong intention and leadership for thereform of Prime Minister Abe whether the reform succeeds or not.

Masayoshi Honma is Professor at The University of Tokyo.

http://www.jiia.or.jp/en/commentary3