RIETI Policy Symposium

Agricultural Policy Reform in the 21st Century- An Agricultural Strategy for Surviving WTO and FTA Negotiations


The greatest impediment to successful and constructive negotiations under either WTO, or FTA-related trade liberalization is extremely high tariffs on Japanese agricultural products (490% for rice, for example). Such high tariffs prevent cheaper foreign agricultural goods from penetrating into the Japanese domestic market and thus protect Japanese farm households by allowing them to sell their products at high prices at home.

If tariffs are reduced under WTO or FTA trade negotiations, such protection will disappear and farm households' income will fall. In order to cope with this problem, the government can introduce direct income payments for compensating the loss of farm households' income. Price-supporting policies place a burden directly on domestic consumers because of very high prices of domestic agricultural goods, whereas the aforementioned direct income payment imposes a tax burden directly on tax payers.

Of course, this policy shift from price-supporting policy to direct income payment mitigates the adverse impact of tariff reduction on farm households' income. However, a large problem remains. That is, direct income payment alone will not lead to improving the efficiency of the agricultural sector, unless it is accompanied by structural reform which targets relatively large farm households as eligible for direct income payments.

Under the price support policy over the past forty years, the Japanese agricultural sector has been in a constantly declining trend: the ratio of secondary part-time farm households whose income from agricultural activities is less than half of total income has increased from 30% to 70%; the ratio of farmer over the age of 65 has increased from 10% to almost 60%; the food self-sufficiency ratio decreased from 80% to 40%. Japanese consumers face a dire situation in terms of food supply safety. In the European Union, policies, structural reform has been implemented so as to increase the scale of agricultural land per farmer with resultant improvement in efficiency. In contrast, in Japan, the price support policy without adequate structural reforms simply protected small-scale farming households. Hence, Japanese agriculture remains quite inefficient.

Japan needs a direct income payment system not just to cope with tariff reductions, but the inefficiency problem by accompanying structural reform. Together with such structural reforms as strict zoning which does not allow farmland to be utilized for other non-farming purposes, it is essential that the direct income payments be targeted at rice-producing farm households with a minimum scale of farmland (eg 3 hectares). Policy shift toward direct income payments, if not accompanied by increased productivity, will simply lead to imposing a huge burden on public finance, that is, on tax-payers, and will not make Japanese agriculture competitive in the international market, nor stop the constantly declining trend of food self-sufficiency.

At this symposium, discussions will take place on the agricultural policy reform, especially a concrete design of direct income payment scheme to be introduced into Japanese agriculture. New agricultural policy will realize a stronger and more efficient agricultural sector in Japan that can meet the challenge of global competition. The discussions will draw upon experiences of the United States and the European Union as incorporated into OECD policy proposals, and also on agricultural reforms taking place worldwide.


  • Date and Time: July 28, 2004, 1:00pm-6:30pm
  • Venue: TEPIA (TEPIA Hall), Kita-Aoyama, Minato-ku
  • Language: Japanese / English (with simultaneous interpretation)
  • Contact: RIETI Mrs. Katagiri / Ms. Matsukura
    Tel: 03-3501-8398

* Streaming video footage of and handouts pertaining to the symposium will be available for downloading from the RIETI website after the event.


13:00-13:10 Opening Remarks
13:10-14:00 Keynote Speech: "New Direction of Agricultural Policy Reform"
Ken ASH (Deputy Director, Directorate for Food, Agriculture and Fisheries, OECD)
14:00-14:05 Comments in Light of the Current Agricultural Situation in Japan
14:05-14:15 Coffee Break
14:15-15:45 Session 1: The Necessity for Agricultural Policy Reform and its Direction
Panel Discussion
KONNO Hidehiro (Visiting Professor, Graduate School of Asia-Pacific Studies, Waseda University)
Ken ASH (Deputy Director, Directorate for Food, Agriculture and Fisheries, OECD)
KIMURA Fukunari (Professor, Keio University)
KITAGAWA Masayasu (Professor, The Okuma School of Public Management, Waseda University)
TAKAGI Yuki (Governor, Agriculture, Forestry and Fishers Finance Corporation)
YAGI Hironori (Professor, The University of Tokyo / Chairman, Council of Food, Agriculture and Rural Area Policies)
YAMASHITA Kazuhito (Senior Fellow, RIETI)
Q & A Session
15:45-16:00 Coffee Break
16:00-18:15 Session 2: Concrete Schemes for and Issues of Agricultural Policy Reform
16:00-16:30 Lead-off Speaker
YAMASHITA Kazuhito (Senior Fellow, RIETI)
16:30-18:15 Panel Discussion
KAMIYA Mitsugi (President, Food and Agriculture Policy Research Center)
KANEKO Hiromichi (Professor, Tottori University of Environmental Studies)
OIZUMI Kazunuki (Professor and Dean, Department of Project Planning, Miyagi University)
TACHIBANA Hiroshi (Managing Director, Japan Business Federation)
YAMADA Toshio (Senior Executive Director, JA Zenchu [Central Union of Agricultural Cooperatives])
YAMASHITA Kazuhito (Senior Fellow, RIETI)
Q & A Session
18:15-18:30 Closing Remarks
18:30-20:00 Reception
* The agenda is subject to change.