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No.7 ,Economy  Aug 02, 2011


The Great East Japan Earthquake on March 11, 2011 severely damaged Japan’s food supply center, which accounts for 21% of nationwide agricultural production and 25% of rice production. According to the Ministry of Agriculture, Forestry and Fisheries (MAFF), damage related to agriculture, forestry and fisheries attributable to the earthquake amounted to near 1.5 trillion yen, of which damage from loss of farmland and farming facilities was 700 billion yen. Extensive farmland was immersed, flooded, or suffered liquefaction due to the quake and tsunami, and many producers were forced to postpone or give up on planting for this year due to restoration work.

Before the quake, the Kan Administration was pursuing whether or not to begin negotiations on joining the Trans-Pacific Strategic Economic Partnership Agreement (TPP), a high-level, free trade agreement that nine countries including the United States were negotiating. But with the quake, all such moves were halted.

MAFF and agricultural organizations had strongly objected to Japan joining the TPP on the grounds that it would “destroy agriculture.” Objections strengthened after the quake, and the possibility of starting negotiations at an early stage disappeared.

But even before the quake, Japan’s agriculture had not been responding to the demands of the time as its status grew increasingly critical, and it was in need of fundamental reform. The quake did not change that. So rather than responding to the quake by merely “restoring” conventional agriculture, some especially proactive agricultural reform theories believe that the nation should set up special agricultural zones in disaster-hit areas, create agricultural business that competes as an industry and at the global level, and make this into a national model.

The essential problem of agriculture is that although the government had strictly protected it, it lost its competitiveness, wound up dependent on protective policies and lost its future prospects as an industry. Figures illustrate this trend. Total agricultural production peaked in 1985 at 11.6 trillion yen, after which it continued to drop to some 8 trillion yen by 2008. The population of agricultural workers declined rapidly from 6.24 million in 1985 to 2.61 in 2010. During this time, agricultural workers 65 or older increased from 28.7% to 61.6%. Their average age rose from 59.1 in 1995 to 65.8 in 2010.

There are 4.7 million members in the agricultural cooperative union (JA) – which is also the stronghold of opposition to liberalizing agriculture – and, combined with its 4.8 million associate members, they total 9.5 million. Yet the agricultural population is 2.61 million, with only 400,000 households capable of living on agriculture from full-time farming. Most of the 9.5 million union members are merely living in farming communities. Part-time farmers work as businessmen for manufacturing companies and are usually out of the community, resulting in this areas simultaneously aging and depopulating.

Four laws have shaped the roots of Japan’s agricultural policy after the World War II: the Agricultural Land Act, Agricultural Cooperatives Act, Agricultural Basic Law and Staple Food Control Act. The policy’s objective was to overcome food shortages after the war and “democratize” agriculture by eliminating the pre-war absentee landowners and landowner giants, and to protect small but independent farmers.

But as people’s incomes increased, food situations changed, and the days of shortage when people sought food for caloric intake were over. Nutritional intake per person gradually increased from 1,903 kcal in 1946, peaking at 2,287 kcal in 1971 and from then declining to 1,904 kcal in 2004. The nation left the post-war era of shortages from around 1971. But laws from the age of shortage and inertia from operating them remained.

Today still, our agricultural policy is basically protective, serving much like a social policy rather than something that will strengthen agriculture’s very nature as an industry. Consequently, as Ohizumi Kazunuki’s thesis indicates, agriculture lost “management brains” for willingly pursuing creative solutions. Farmland is hardly becoming a management resource for agriculture, and abandoned farmland now amounts to 400,000 hectares as the industry is lacks successors and is aging.

People voice the need to expand the scale of farming, but farmland has yet to achieve integration. The “farmer principle” of the Agricultural Land Act that says “the farmer must own his farmland” hinders this process. The law was revised in 2009, allowing general companies to own farmland under certain conditions, yet farmland integration is slow to progress. As Honma Masayoshi points out, there are 1,220 owners that operate 100 hectares or more, yet most such land is scattered in several dozen locations, so these farmers are practically operating 100 one-hectare farms, unable to use machines to greatly improve productivity.

“Whether or not we join the TPP, Japanese agriculture is already incapable of escaping the negative spiral,” says Takagi Yuki, former Vice-Minister of Agriculture, Forestry and Fisheries. “If we merely continue our method of protection that simply throws tax money around, Japanese agriculture could very well lose its supplying capacity.” Takagi stresses that the country should face up to this fact.

Ten days prior to the earthquake, the government enacted a law that aims to develop agriculture, forestry, and fisheries as a “sixth industry,” defining it as a comprehensive industry that will heighten added value by fusing and linking agriculture, forestry, and fisheries (primary industry) with manufacturing (secondary industry), and sales and exports (tertiary industry). We hope to see agricultural experiments with new concepts that go beyond “restoration” from the earthquake.