Subjects for Japanese agriculture and agricultural policy

This paper considers seven topics concerning the major problems of Japanese agriculture and agricultural policy. Section 1 summarizes the subjects by which Japanese agriculture and agricultural policy are analyzed and set. Section 2 analyzes the development process of Japanese agriculture after the war. The first is the "within-problem stage" of agriculture, that is, stagnation of productivity based on exploitation of tenant farmers by landlords before land reform took place in 1946. The second process is the "between-problem stage," that is, a period of relatively low productivity and income of farm workers compared with workers in other industries during the 1960s, 70s and 80s. The third is "internationa-problem stage" given that name due to liberalization of trade since 1990. The economic position of agriculture in the national economy has generally been declining since 1960. It has been in absolute decline since 1995 so that now (1998) the share of agricultural gross income has fallen to 1.3%, and the ratio of farm worker to total labor force is 4.8%. The self-sufficiency ratio of food has greatly decreased since 1960 partly due to the westernization of eating habits as a result of high economic growth in the national economy. On the other hand, the nation's recent desire to maintain an appropriate level of food security and multiple functions of agriculture has led to a policy under the new Fundamental Law to raise the self-sufficiency ratio from 40% at present to 45% in 2010. The necessary conditions for raising the self-sufficiency ratio are analyzed about agricultural production aspects as well as food demand and agricultural policy. Section 3 examines the possibility of a world-wide food crisis occurrence. The world-wide surplus production of food compared with effective demand will continue for about two decades. Therefore, the nation's welfare will decrease if the ratio of domestic food were to be raised too fast in an effort to raise the national food self-sufficiency to substitute national production for cheaper food imports. This is especially serious considering the necessity of preparing national food security for the world food crisis anticipated to occur in 2030s. Section 4 analyzes the multiple functions of agriculture and rural villages. Section 5 explains writer's anxiety over why a large majority of the 135 nations allied with the World Trade Organization will likely disapprove proposals to apply protectionist policies to maintain multiple functions of agriculture proposed by Japanese Government. Section 6 considers directions for improvement of farmers' structure from the viewpoint of fostering more efficient and stable farmers, who could share as much as 80% of national farm production. The Ministry proposes that the concept of efficient and stable farmers includes not only individuals and cooperative fanners who are fully occupied and earn the same level of farm income as average workers in other industries, but also cooperative groups of village farmers and other cooperative organizations which sell various kinds of farm services. However, even small size, old-age farmers and part-time farmer as well as urban volunteers who support farmers through their interest in natural environments must be protected to maintain the multiple functions of Japanese agriculture. Word-wide surplus production of farm products will continue for about two more decades. The government must make its best effort to win approval in the WTO to apply an appropriate level of import control policies and domestic price support policies to avoid a break-down of domestic agriculture and to maintain the multiple functions of agriculture during this period.