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Seminar Lecture in Taiwan (February 2008). Japanese Agricultural Policy Reform Coping with Globalization Masayoshi Honma. New development in Japanese agricultural policy. Introduction of direct payment: Targeting large farms Rice production control: Increases in the role of JA
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Seminar Lecture in Taiwan (February 2008) Japanese Agricultural Policy Reform Coping with Globalization Masayoshi Honma
New development in Japanese agricultural policy • Introduction of direct payment: Targeting large farms • Rice production control: Increases in the role of JA • Changes in Minster of MAFF: Scandal issues • Ruling LDP lost in Upper House election in July 2007: Revival of farm protection policy • Rapid decline in rice price: Need of structural reform • Demand for bio-fuel: high price of feed grain • Contaminated dumplings from China: led to food self-sufficiency issues
Problems to be solved in Japanese agriculture • Establishing agricultural policy coping with the globalization through WTO and FTA →to prepare for declines in tariffs and to promote product differentiation • Reconsideration of the direct payment policy coping with structural reform in agriculture →to give large farms incentives to enlarge their operation scale and to grow their management skill
Agricultural import of Japan 400 350 (2000年) 300 200 (輸入数量指数) 100 Import Quantity Index (1970年=100) 0 1970 1980 1990 1995 1996 1997 1998 1999 2000 (年) Doha Round (2001~) Uruguay Roud (1986~94) Tokyo Round (1973~79) Kennedy Round (1963~67) 出典:農林水産省配布資料
Current WTO negotiation on agriculture • Exporters VS.Importers → Developing countries VS.US+EU • G4 (EU, US, Brazil and India) is the mail player • S&D treatment for developing countries is important • Influence of Japan and other importers declined • Emergence of African counties’ power: cotton initiatives • Modality for market access: the larger the current tariff is, the larger the reduction rate will be
Proposal by the Chair • Average 54% or more reduction in the layer-wise reduction formula: hard to accept for Japan • Sensitive product box is 4-6% of tariff lines: Japan insists more than 10 % note: # of tariff lines in Japan: rice (17), wheat (20), dairy products (20), sugar (56) • Abolishing Special Safe Guard: Japan insisted increase in number of SSG • Leaving the issue of capping tariff for the negotiation:most important issue for Japan
Importance of FTA for Japan • Enlarged EU on the west, Greater America for FTAA, and how about in Asia? • Demerit increased to be out of the FTA network in the world • Rapid development of Korea for FTA with US and EU • Toward Asian Community in the future and the leadership of Japan
Rapid changes in world food economy • Rapid increases in demand in BRICS for high quality foods: Japan tends to lose in buying competition • Rapid increases in demand for bio-fuel: Soaring grain prices damaging dairy and livestock farmers • Global warming and climate changes: Unstable production with changes in production patterns and frequent floods and draughts
Food self-sufficiency ratio in Japan In calorie base 79%(1960)-->53%(1980) -->40%(2000)-->39%(2006) Self-sufficiency ratios for selected Japanese dishes: Pork cutlet don (50%), Curry rice (49%), Beef don (46%), Yakitori chicken (27%), Tempura (23%), Hamburg (12%), Ramen (3%)
Food security issue in Japan -Can we survive in stopping food imports?- • Yes, with 4.67 million hectares of current farm land to supply 2020 kcal per person per day (2) But how to operate production and distribution effectively? (3) It is not a food or agricultural issue but the national security issue (4) The most important is to secure the energy supply in advance of food supply -The menu of daily food with 100% self-supply (2020 kcal)- Breakfast: a cap of rice, a sweet potato, some pickles Lunch: two pieces of potatoes, boiled potatoes, a piece of apple Super: a cap of rice, baked potatoes, a piece of fish + udon (every 2days), miso soup (every two days), natto (2 in 3days) milk (every 6days), eggs (every 7days), meat (every 9days)
Agricultural policy reform coping with globalization • Reduce the price gap between domestic and import food with product differentiation • Look for the comparative advantage of Japanese agriculture • Liberalize the agricultural labor migration • Secure the food supply through FTA arrangement • Technical assistance in developing countries, in particular for the SPS issues • Establish a forum for Common Agricultural Policy in Asia