1. Seminar Lecture in Taiwan (February 2008) Japanese Agricultural Policy Reform Coping with Globalization Masayoshi Honma

2. New development in Japanese agricultural policy Introduction of direct payment: Targeting large farms Rice production control: Increases in the role of JA Changes in Minster of MAFF: Scandal issues Ruling LDP lost in Upper House election in July 2007: Revival of farm protection policy Rapid decline in rice price: Need of structural reform Demand for bio-fuel: high price of feed grain Contaminated dumplings from China: led to food self- sufficiency issues

3. Problems to be solved in Japanese agriculture Establishing agricultural policy coping with the globalization through WTO and FTA →to prepare for declines in tariffs and to promote product differentiation Reconsideration of the direct payment policy coping with structural reform in agriculture →to give large farms incentives to enlarge their operation scale and to grow their management skill

4. Agricultural import of Japan 0 100 200 300 400 ( 輸入数量指数 ) 197019801990199519961997199819992000 (年)(年) 350 (2000 年 ) Import Quantity Index (1970 年＝ 100 ） Doha Round (2001 ～ ) Tokyo Round (1973 ～ 79) Uruguay Roud (1986 ～ 94) Kennedy Round (1963 ～ 67) 出典：農林水産省配布資 料

6. Current WTO negotiation on agriculture Exporters VS ． Importers → Developing countries VS ． US+EU G4 (EU, US, Brazil and India) is the mail player S&D treatment for developing countries is important Influence of Japan and other importers declined Emergence of African counties’ power: cotton initiatives Modality for market access: the larger the current tariff is, the larger the reduction rate will be

7. Proposal by the Chair Average 54% or more reduction in the layer-wise reduction formula: hard to accept for Japan Sensitive product box is 4-6% of tariff lines: Japan insists more than 10 % note: # of tariff lines in Japan: rice (17), wheat (20), dairy products (20), sugar (56) Abolishing Special Safe Guard: Japan insisted increase in number of SSG Leaving the issue of capping tariff for the negotiation: most important issue for Japan

8. Importance of FTA for Japan Enlarged EU on the west, Greater America for FTAA, and how about in Asia? Demerit increased to be out of the FTA network in the world Rapid development of Korea for FTA with US and EU Toward Asian Community in the future and the leadership of Japan

9. Rapid changes in world food economy Rapid increases in demand in BRICS for high quality foods: Japan tends to lose in buying competition Rapid increases in demand for bio-fuel: Soaring grain prices damaging dairy and livestock farmers Global warming and climate changes: Unstable production with changes in production patterns and frequent floods and draughts

13. Food self-sufficiency ratio in Japan In calorie base 79%(1960 ） -->53% （ 1980) -->40% （ 2000 ） -->39% （ 2006 ） Self-sufficiency ratios for selected Japanese dishes: Pork cutlet don (50%), Curry rice (49%), Beef don (46%), Yakitori chicken (27%), Tempura (23%), Hamburg (12%), Ramen (3%)

16. Food security issue in Japan -Can we survive in stopping food imports?- (1)Yes, with 4.67 million hectares of current farm land to supply 2020 kcal per person per day (2) But how to operate production and distribution effectively? (3) It is not a food or agricultural issue but the national security issue (4) The most important is to secure the energy supply in advance of food supply -The menu of daily food with 100% self-supply (2020 kcal)- Breakfast: a cap of rice, a sweet potato, some pickles Lunch: two pieces of potatoes, boiled potatoes, a piece of apple Super: a cap of rice, baked potatoes, a piece of fish + udon (every 2days), miso soup (every two days), natto (2 in 3days) milk (every 6days), eggs (every 7days), meat (every 9days)

17. Agricultural policy reform coping with globalization Reduce the price gap between domestic and import food with product differentiation Look for the comparative advantage of Japanese agriculture Liberalize the agricultural labor migration Secure the food supply through FTA arrangement Technical assistance in developing countries, in particular for the SPS issues Establish a forum for Common Agricultural Policy in Asia