Japan’s Agricultural Policy: Escaping the Ancien Régime

Abstract

In Japan, high rice prices, supported by Japan’s agricultural cooperatives (JAs) and realized by acreage reduction programs that subsidize farmers to cultivate products other than rice for human consumption, have enabled small-scale, inefficient part-time farmers to survive. Income earned by part-time farmers in non-agricultural jobs is deposited with the JA Bank, making it Japan’s second-largest bank. The Abe administration initiated reforms of JA but has made no significant gains. Instead, the administration has increased acreage reduction subsidies for fodder rice. This will substantially reduce imports of US corn. If the USA were to bring a dispute to the WTO, it would be allowed to apply retaliatory tariffs to cars imported from Japan. This could lead to the abolition of the acreage reduction policy.