(Yomiuri: October 21, 2015 – p. 9)
Japan will ultimately eliminate tariffs on 1,885 of a total of 2,328 agricultural products (81.0%) under the TPP. While the ratio of tariffs retained is much higher than other TPP nations, it is still inevitable that the TPP will have an impact on domestic agriculture. Japan has entered a critical stage that will determine whether Japan’s agriculture can go on the “offensive” by expanding exports, for instance, in light of the TPP agreement.
The tariff retention ratios for agricultural products of some other TPP participants are: Canada, 5.9%; Peru, 4.0%; and the U.S., 1.2%. Japan’s 19.0% is exceptionally high. This is the result of Japan’s protection of the five sensitive agricultural sectors, including rice and wheat.
In addition to the five sensitivities, tariffs will also be maintained for 27 other items, such as miscellaneous beans, konnyaku, shiitake mushrooms, and seaweed, to protect local farmers. It can be said that compared to other countries, Japan was more successful in safeguarding its domestic agriculture.
However, a higher ratio of tariff retention does not change the fact that Japanese agriculture is in crisis. The average age of farmers is over 66 and not much progress has been made in land aggregation.
The government will work on expanding exports first. Its goal is to increase exports of agricultural, forestry, and fisheries products, including processed items, from the present 610 billion yen to 1 trillion yen by 2020.
The Ministry of Agriculture, Forestry and Fisheries has begun considering a “checkoff” system similar to the one used in the U.S.
The government will also work on the longstanding issue of promoting larger scale farms.
On the other hand, policies to protect rice farmers will also be implemented. Japan is committed to creating a special TPP tariff-free import quota for the U.S. and Australia of approximately 80,000 tons. Although this represents just 1% of domestic production, the government is considering increasing its purchase of rice reserves for fear that more imports may cause domestic rice prices to fall.
If the government buys an amount of rice in the domestic market equivalent to the increased imports, there will be no change in the volume of rice available in the market, and this will prevent any price dive.
This is a time-honored method for maintaining rice prices. However, not only will this mean an increased financial burden on the government, consumers will also lose the opportunity to buy cheaper rice. If policies contradicting the concept of “offensive agriculture” are also adopted, this may cancel out the benefits of greater trade liberalization under the TPP.
Japan must avoid repeating the mistake it made during the Uruguay Round. It spent up to 6 trillion yen on farmers but failed to strengthen the competitiveness of domestic agriculture. (Slightly abridged)