Politics, No.7  Aug. 3, 2011


The political situation remains confused, but there must not be any delay to the rebuilding after the Great East Japan Earthquake. With the problems at the nuclear power plant not yet contained and many victims continuing to live in emergency shelters, we should act quickly to secure their livelihoods for now and implement compensation to the victims in order to contain harmful rumors.

At the same time, it is important to draw up plans for the future, which will likely require a fundamental review of the concept of the regional economic society. As long as arable land remains dispersed, there will be no progress in terms of efficiency.

With regard to agriculture, the government has already made it clear that it is looking at building a food supply base in Tohoku by consolidating farmland in the disaster areas and developing large-scale agriculture. Also, to advance a new kind of urban planning, it is the policy of the Reconstruction Design Council to request that the government use a system of special zones; it is likely that designation of larger business zones will take place upon consolidate of farmland, although basic urban planning should be done by regional reconstruction commissions.

It is estimated that the earthquake and tsunami flooded and submerged about 23,600 hectares of farmland (21,510 hectares were rice paddies) and that damage to farmland and agricultural facilities will rise to 729.2 billion yen. For now, clearing rubble from farmland, desalination, repairs to drainage channels and drainage pumps, and other recovery work is underway wherever possible, but we must also think about future models for the agricultural belt in eastern Japan.

If we look at the three prefectures in Tohoku, the acreage of arable land damaged by flooding or submersion is 1.2% for Iwate Prefecture, 11.0% for Miyagi Prefecture and 4.0% for Fukushima Prefecture. I will use a table to confirm the state of agriculture in the three prefectures in 2010. Agricultural management entities (commercial farms and agricultural entities other than farm households) number about 180,000, or 11% of the whole country. Also, the amount of agricultural output (2009) is approximately 670 billion yen, which corresponds to 8% of the national agricultural output.

If we look at the scale of arable land under operation, more than 90% of the farms in the three prefectures fall under the category of less than 5 hectares. On the other hand, there are also some large farms, with the number of farms with 10 hectares or more exceeding 3,500 in the three prefectures. Among them, approximately 1,300 entities have 20 hectares or more under cultivation. This is not shown in the table, but there are also 68 farms in the three prefectures with acreages of 100 hectares or more. In terms of numbers, this is still small, but the number of farms of 100 hectares or more has risen to 1,220 for the whole country, and there is a steady increase in large-scale agricultural management entities.

Toward Universally Accepted Agriculture (Part I) Consolidate Farmland, Integrate with Residential Land.JPG

The problem is that even though in statistical terms it looks as if the scale is expanding, the expansion of acreage under operation is not necessarily linked to increasing efficiency of agriculture. For example, even if 100 hectares of arable land is under cultivation, the farmland is not necessarily all in one place. There is arable land where total acreage is, say, 100 hectares but it is dispersed over several locations, even dozens of locations, sometimes even more. In that sense, it would be more accurate to say that an operator with 100 hectares in 100 locations is 100 operations each working one hectare.

When arable land is dispersed, it takes time to move tractors and other agricultural machinery from one plot of land to another, and there is no way to avoid wasting time in the optimum periods for seeding, planting and harvesting. Consequently, even if the operational scale is expanded, it is impossible to enjoy economies of scale. In fact, reflecting this situation, in statistical terms, there is hardly any decrease in production costs per hectare for rice even when a farm exceeds 10 hectares.

This phenomenon is apparent in every district in the country and so it is a pressing issue for agriculture in Japan to consolidate dispersed farmland. To date, however, no one has drawn up any decisive policies for consolidating farmland. No owner wants gives up farmland because there is preferential treatment under the taxation system for farmland, and expectations for conversion to other than agricultural use. Also, leasing land is not progressing as hoped because of problems such as compensation for disengaging from production, which may arise if the land has been leased when an opportunity for conversion presents itself. On the other hand, with the shortage of successors and the aging agricultural workers, abandoned arable farmland has risen to 400,000 hectares, or an equal of the area of Saitama Prefecture.

In Japan where the land area is small, farmland must be effectively utilized. Land consolidation and land replotting are effective means of consolidating dispersed farmland.

Land consolidation refers to an exchange of titles to farmland with the aim of consolidating dispersed farmland. It is also done among individuals but, generally, it is undertaken as a regional initiative. If certain conditions are met, the land becomes an enterprise under the Land Improvement Act. It is possible to receive state and prefectural subsidies and there is also preferential treatment under the taxation system. Land consolidation refers to an exchange of title to farmland with no changes to boundaries, the shape of the land or lot numbers.

In contrast, land replotting goes hand in hand with work to improve the land, such as making adjustments to farmland that is an irregular shape, or enlarging a single unit of cultivated land. In case of land replotting, the titles to dispersed farmland prior to the work are allocated to the new farmland after completion of the work. The farmland is assessed before and after the work, and if there are imbalances in terms of acreage (registered acreage), water quality, incline or other natural conditions, or usage conditions, the difference is calculated in monetary terms.

When land improvement work on a large scale is necessary because of damage to farmland or agricultural facilities as a result of an earthquake or tsunami, it is desirable to use the land replotting technique to plan scale expansion and effective land utilization. That is to say, the small-scale dispersed fields of cultivated land, which generally are divided into 30-are blocks would be reordered into so-called super-fields of cultivated land, which are divided into blocks of 2 hectares, and the land would be consolidated by means of land replotting and turned into fields of cultivated land where it is possible to make effective use of agricultural machinery.

In this case, it would likely be necessary to investigate land utilization for the area as a whole, and not only for the farmland that was struck by disaster. In order to protect local residents from tsunami damage, there is an ongoing debate about consolidating residential zones to higher ground and commuting to fields and fishing harbors. There is a need for comprehensive planning and to integrate agricultural and urban land utilization. It is also conceivable to secure farmland through exchange with residential land. We must not only designate farmland, but also business zones, and urgently prepare surveys to measure the intention of farm households and local residents.

Conventional farmland consolidation is handled as a public works project and, on the whole, the state defrays half the cost, prefectural governments one quarter, and local municipalities one eighth with the individual being liable for the remaining one eighth. However, we cannot ask individuals to defray the cost for reconstruction after this disaster.

In actual fact, land improvement work for disaster relief is a special exception where state contributions are inflated with the state defraying 90% of the cost of desalinating farmland.

Part of the cost of reconstruction should be released by rearranging the budget. In particular, income compensation for individual households, which is pork-barrel politics that likely will hinder structural reforms, should be ended, and the allocated budget should be diverted. It has been calculated that income compensation paid to individual farm households will exceed 800 billion yen in fiscal 2011. Even though it may be difficult to put a stop to it across the board since the announcement has already been made and participation solicited for this fiscal year, as of 2012 it is essential to undertake a drastic review of the budget, including a major reversal of agricultural policies.

Both the government and the private sector have drawn up various plans for consolidating farmland and setting up food supply schemes, but none have gone beyond aspirations for a fait accompli. The problem lies in how to get there. Who will execute the plan, how will the wishes of the farmers and local residents be reflected? What is to be done about adjustments in the event of a conflict of interests? Even if temporary nationalization or government control is possible, in the long term, we have to implement policies that attract private-sector initiatives.

One idea is to entrust basic urban planning in large areas exceeding the administrative districts to regional reconstruction commissions made up of a small number of experts. The commissions would draw up plans that go beyond the prefectures and municipalities, and present the plans to local farmers and residents for adjustments. Farmers, builders, and other people with vested interests would not have a hand in the commissions. Any adjustment of interests would be done through hearings. The commission would be granted the authority not only to draw up the concepts, but also the plans for execution, and the members of the commission would be working full-time.

With respect to formulating regional plans, it is possible that a number of regulations may prove obstructive. The Agricultural Land Act places restrictions on consolidating farmland and large-scale development. To turn the plans for a food supply base into reality, it is imperative that non-agricultural corporations and other new initiatives come on board, and not only the farmers.

However, under the Agricultural Land Act, corporations other than farming corporations are not allowed to acquire farmland. It would be desirable to encourage investment by allowing corporations with financial muscle and expertise in dealing with risk to acquire farmland, and to facilitate developments aimed not only at production, but also processing, distribution and services. If there are concerns that the corporations will let farmland lie unused, guarantees could be made that farmland will be utilized as farmland by not allowing conversion of the land for a fixed period of, say, 30 years, and heavy penalties could be imposed for abandoning arable land or for failing to cultivate it.

To recover from the Great East Japan Earthquake, we need to find some sort of foundation for the future. There must be some level of hope in the recovery plans, which is to say that this would also be a policy for restoring vitality to the whole of Japan.

Translated from “sekai ni tsuyosuru nogyo e (part 1),” Nihon Keizai Shimbun, June 8 2011, p. 25. (Courtesy of Nihon Keizai Shimbunsha)