Reviewing Rice Policy

It must be the one of the consequences of current movement for international free trade frameworks. The Government of Japan is reviewing its agricultural policy that existed for a half century, the reform which reduces subsidy for rice farmers beginning next year and abolishes it within five years. The strongest political voice for farmers, Liberal Democratic Party, gave in consistent initiative for open market upheld by the executive branch led by Prime Minister, Shinzo Abe. However, absence of strategy for maintaining staple food of Japan makes farmers worried.

In 1970, the government introduced the policy of reducing acreage to maintain rice price that had been suffering from decline caused by overproduction. To a farmer who accepted quota of reducing rice pads, the government introduced a system to provide with cash. The subsidy currently amounting to ¥15,000 per acre will eventually be reduced starting next year and eliminated by 2018. To others who changes products from rice to something else, the government has been paying ¥80,000 per ten acres, which amount will be increased from next year.

Instead, the government will create new subsidy for maintenance of agricultural fields. Eligible activity includes maintaining ridge, cleaning ditches up and mowing farm roads. In small valleys where farm maintenance is not easy, the subsidy will be added. Concept of policy for farmers is shifting from care for income to supporting agricultural sustainability.

Legislators representing interest of agriculture had been firmly opposed new policy. However, Abe administration insisted on agricultural reform as a symbol of deregulation, which consisted “third arrow” of Abe’s economic policy, following monetary ease and aggressive spending. With retirement of powerful congressmen closely connected with farmers, LDP had become too powerless to reject it.

Rice for the Japanese can be paralleled with beef for the Americans. How is this crucial crop going to be? The benefit for farmers to produce rice will be reduced by new policy and rice farming should inevitably be competitive. A lot of farmers abandoning it are highly expected. Although quality of taste has been improved these years, Japanese rice is going to be exposed to international contest, with possibility of erosion of tariff in the framework of Trans-Pacific Partnership.

If the government fails in this agricultural reform, food security in Japan will significantly be damaged. Economic gap between urban cities and rural area will be wider than ever. It is fair to say that negotiation over open market will determine the future of Japan.