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ECONOMY > Agriculture

Keeping reform plans on track key for Japan’s farm sector

  • November 26, 2016
  • , Nikkei Asian Review , 6:50 am
  • English Press

Japan’s latest agricultural reform plan marks an ambitious start toward making the farm sector more competitive. Now, the ball is in the government’s court to keep changes on track even as momentum threatens to fade.

 

To be sure, the plan approved Friday by a Liberal Democratic Party committee on agriculture addresses a number of key — if often overlooked — issues for the industry. The Ministry of Agriculture, Forestry and Fisheries, for example, is to begin publishing periodic updates on prices of farm equipment and materials such as fertilizer in Japan and abroad. While many farmers have a sense that these products are relatively expensive in Japan, comparing domestic and foreign prices — or even prices between Japanese regions — has historically been a challenge. Now, producers paying high prices will be better able to call on their local cooperatives for cuts.

 

The plan also boosts the power of regional organizations brokering farmland leases, making it easier for them to consolidate small borrowed fields into larger plots. This could help bring efficiency in Japan’s agricultural sector up to levels seen overseas.

 

In other cases, hashing out policy specifics is left to the agriculture ministry. For example, independent farmers are to be given access to subsidies for the production of raw milk — the base for dairy products such as milk and butter — currently available only to producers distributing their goods through cooperative networks designated by the government. But in-depth rules such as those to prevent disruptions in the dairy market have yet to be defined.

 

Proposed structural changes to the National Federation of Agricultural Cooperative Associations, or Zen-Noh, are largely left up to the group’s constituent cooperatives. While the government will check up periodically to see how adjustments to key commercial operations are going, there is a limit to how actively the state can intervene in private enterprise. Eventually, ways to cut down on the number of farmers receiving public subsidies and turn agricultural cooperatives into groups geared more toward true industry professionals will need to be discussed. But such matters were put aside this time around.

 

Care also needs to be taken to keep up momentum for reform even as the Trans-Pacific Partnership trade pact’s chances of enactment dwindle in the face of a Donald Trump presidency in the U.S. Easing anticipated negative impacts of the agreement on domestic agriculture provided much of the impetus for ruling-party reform efforts in the first place.

 

Demographics, meanwhile, will take a toll on the industry regardless of how the TPP ends up: Many of Japan’s farmers are leaving the fields as they reach retirement age. Whatever changes are in the works will need to happen quickly if they are to have any real impact.

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