Income is the price multiplied by the amount of production, minus the cost. The characteristic of Japan’s agricultural policy is that in order to improve farm income, the price was raised as a quick measure, not as a cost reduction by expanding the scale or increasing the yield. A typical example is a rice.
In order to keep the total agricultural land area constant and expand the scale per household, the number of farm households must be reduced and need a towing service to transport their needs. The overwhelming majority of union members are rice farmers, and agricultural cooperatives who want to maintain the number of farmers opposed the structural reform of rice agriculture. This is because maintaining a large number of part-time farmers rather than a small number of main farmers will lead to the stability of agricultural cooperative management and the maintenance of political power by depositing non-farm income and profits from the conversion of farmland to agricultural cooperative accounts. The high rice price itself contributed to increasing the rice sales commission income of the agricultural cooperative and the commission income of the sales of agricultural materials such as fertilizers, pesticides, and agricultural machinery. In the era of the food control system, agricultural cooperatives launched a major political movement to raise the price of rice produced by producers.
Even now that the food control system has been abolished, rice prices are maintained by a supply-restricted cartel called a reduction in rice prices, and the government has paid about 200 billion yen annually and a total of 7 trillion yen in subsidies to involve farmers. .. The reduced area is now 1 million hectares, which is more than 40% of the total paddy field. While reducing the production of rice by 5 million tons, the policy opposite to improving the food self-sufficiency rate of importing more than 7 million tons of wheat continues to be adopted. It was the Ministry of the Army, which advocated food self-sufficiency, that opposed the prewar Ministry of Agriculture and Forestry’s anti-reduction policy. True food self-sufficiency is incompatible with reduction.
Agricultural policy upset
However, as trade liberalization negotiations progress, such high price and high tariff policies cannot be maintained forever. Although the Uruguay Round negotiations converted the import quota system of each country into tariffs, they admitted “dirty tariffs” to replace the large domestic and foreign price differences between 1986 and 1988 with tariffs, so the high domestic prices of each country did not require a reduction.
However, the Doha Round shook and confused the LDP’s agricultural policy. In August 2003, the US and EU agreed to set a 100% cap on agricultural tariffs. For this reason, at the end of the same month, a discourse was issued by the Minister of Agriculture, Forestry, and Fisheries to revise the basic plan of agricultural policy “with a view to direct payments from other countries”. If the tariff rate of 778% of rice is lowered to that level, Japanese agriculture will be destroyed unless direct payment is introduced as in the EU.
However, this recedes twice. First, the WTO Ministerial Conference chairman’s proposal in September raised expectations that rice could be exempted from the maximum tariff rate, so the Ministry of Agriculture, Forestry and Fisheries announced that it would be excluded from direct payments. Next, the August 2004 WTO negotiation framework agreement raised hopeful thinking that it might be possible to make exceptions to tariff reductions for certain items. If you don’t have to lower tariffs, you don’t have to lower domestic prices. For this reason, the content of direct payment for the price reduction, including not only rice but also other agricultural products such as wheat and milk, has been further retreated. In the end, the WTO, which compensates for the difference between the farmer’s guaranteed price and the market price, only shifts to direct payment, which does not require the WTO to reduce 70% of the subsidies such as wheat and soybeans that are subject to reduction. Became.
Nevertheless, it was commendable that the target farmers were limited to 4 hectares or more in opposition to the Democratic Party’s proposal for income compensation for Baramaki. However, since the part-time farmer also accepted the exception that if the farmland area of 20 hectares or more was collected and farmed in the village, the scale was expanded by “leaving” the farmland from the main farmer whose scale was expanded by the part-time farmer. There was also a situation that went against. In addition, the Liberal Democratic Party, which lost the 2007 Upper House election, has admitted a special case for the mayor of the municipality for the target farmers and has further receded from the “targeting target” policy.