Food Security and Policy
balancing farmer and consumer interests

Research Directorthe Canon Institute for Global Studies

Kazuhito YAMASHITA

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Price matters
 Price changes always equalize supply anddemand.
 Food is sufficient for the world population.
Obesity and waste in developed countries
but, in contrast, hunger and loss indeveloping countries.
 The poor in developing countries cannot
afford to buy food at world prices. The
prices are too high for them. “Food security”
is used in this sense in the FAO..
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What does food security consist of?
 Food security consists of food affordability andaccessibility.
 Some nations lack both.
(1) Some people in developing countries cannot afford tobuy food. A food crisis occurs when food prices soar
as in 2008..
(2) Some people in developing countries have no accessto food due to the lack of transportation or distribution
infrastructure, even when food is delivered at ports.
 Economic growth and/or building infrastructureis essential for overcoming a food crisis.
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Accessibility matters for importing countries
 There is, however, the case when Japan cannot gain

access to food even with plentiful monetary resources.
 This situation can be caused by physical disruption ofimports such as strikes at the ports of exporting
countries or by closure of sea-lanes by military
offensives. This can happen not only to Japan but toany other importing country.
 We would have no other way to expand our foodproduction in food crisis. This, however, needs
agricultural resources for production. By what means?

4Two scenarios of high food prices
 In the long run, food supply may beinsufficient for the growing world
population. On average, prices might be
too high for the poor.
→ Investment and innovative technologies
 In the short run, the issue is volatility.
Occasionally, food prices soar as in2008, while they are low on average.
→ Stockpile5

Trade policies make food prices more volatile
 In the period of food surplus, a country tries to stop

inexpensive imports and isolate its domestic market
from the international market by tariffs in order toprotect agriculture. This diminishes the demand in
the international market with the result that world
prices may further fall.
 In the period of a food shortage, on the other hand,a country tries not to export either by export tax orexport restriction. This decreases supply in theinternational market with the result that world prices
may further rise.
6Comparison of agricultural policies
CountryJapan

USEU

Decoupled direct payments

No

Yes/NoYes

Environmental direct
payments

PartialYes

Yes

Direct payments for lessfavorable regions

Yes

No

Yes

Production restriction
program for pricemaintenance

Yes

NoNo

Tariffs* over 1000%

1 (tubers of konnyaku)

None

None

Tariffs of 500-1000%

2 (rice, peanuts)

None

NoneTariffs 300-500%

2 (butter, pork)

None

None

Tariffs of 200-300%

6 (wheat, barley, skim milk powder,starch, beans and raw milk)

None

None

* Specific tariffs are applied to tariffed products in Japan. Here, these specific tariffs are estimated as
their equivalents of ad valorem tariff rates, taking into account international prices.
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Change from Price Support to Direct Payment
eliminates Consumer Burden.
Price

Domestic
agricultural
price

Pricesupport↓
Directpayment

Tariff↓Tariffelimination

Importprice

Quantity

Domestic production

Imports

Price Support backed by Tariffs
vs. Direct Payments
 Price support higher than an international pricedecreases demand for its own agriculturalindustry. Japan’s farmland indispensable forfood security declined from 6.1 million hectares
to 4.5 million hectares from 1960 to 2005.
 Direct payments to farmers do not distort themarket. They will directly address and target thereal needs, such as the farmer’s income andfood security. The reduction of price and cost
would make agriculture more competitive in theworld market.
9Free Trade is a basis for Food Security
 In normal times, we import wheat and beef and export

rice by reducing its cost under free trade. In case of afood crisis where Japan can no longer import due tothe disrupted transportation, Japan will stop

exporting rice and rather start consuming it inorder to survive.
 Free trade does not help an importing country during

such a crisis, but exporting some products innormal times under free trade maintains
agricultural resources in case of need.
 Free trade is indeed a basis of food security.
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