The puzzle of the ‘agriculture boom’ in Japan Meiji Gakuin University Yoshihisa Godo November 30 ｔｈ, 2012 Singapore Management University

Topics 1. Poor performance of Japanese agriculture 2. Why so poor? 3. In contrast, ‘agricultural boom’ since around Why such a boom?

Topics 1. Poor performance of Japanese agriculture 2. Why so poor? 3. In contrast, ‘agricultural boom’ since around Why such a boom?

Poor performance of Japanese agriculture(1/3) Agriculture makes ‘negative’ contribution to national income Agricultural Protection, 4 trillion yen (measured by PSE) > Agricultural Income, 3 trillion yen (measured by net value added)

Poor performance of Japanese agriculture(2/3) Stagnation in farming technology

7 Developed countries other than Japan continue to improve their agricultural productivity

Poor performance of Japanese agriculture(3/3) Deterioration in nutrition value Vitamin C in Spinach 100g 1982: 65mg 2010: 35mg

Topics 1. Poor performance of Japanese agriculture 2. Why so poor? 3. In contrast, ‘agricultural boom’ since around Why such a boom?

Why so poor? ＝ Loss of farming skill decreasing ‘skill-intensive farming’ increasing ‘by-the-book-style farming Characteristics of Japan's farming skill –Scientific knowledge + Learning by doing –‘Skill intensive’ means ‘knowledge intensive’ and ‘labor intensive’ –Skill intensive farming is good for the protection of natural environment and improve the taste of the farm products and the capacity to resist abnormal weather –Self-supply of intermediaries (such as manure)

Three problems which prevent farmers from improving farming skill –Upstream problem: disorder in farmland use –Downstream problem: consumers’ inadequate ability to judge the quality of farm products –Radiation problem

Farmland use problem in Japan Limited Flat Area High Population Density Short Rivers Necessity of Close Communication among all the Farmers in the Community (e.g., for water use) Environmental Externality Urban Land Use vs. Agricultural Land Use (Good for Non-agri. Use = Good for Farming ) Both Competition & Order are necessary

Capital gain from farmland conversion (the author’s estimates)

Allocation of agricultural budget

Japan’s farmland use regulations ☆ Officially, strict regulations on farmland use. ☆ Actually, those regulations are ineffective. ☆ Popular misunderstanding among Japanese citizens (farmers as well as urban dwellers): a landowner can use his farmland as he likes ☆ MAFF is unwilling to enforce farmland use regulations while MAFF pretends to apply the laws rigidly

Traditional Political Dynamics in Agriculture

Downstream problem Bad eating habits Consumers' excess reliance on the Authorities Racism?

Topics 1. Poor performance of Japanese agriculture 2. Why so poor? 3. In contrast, ‘agricultural boom’ since around Why such a boom?

Agricultural Boom Since around 2008 (1/4) High Expectations from Commercial-Industrial Sector: ☆ New Entry of Stock Firms ☆ Large-size Farming ☆ High-tech Farming ☆ Nou Shoukou Renkei (agri-commercial- manufacturing collaboration) ☆ 6 th Industry

Agricultural Boom Since around 2008 (2/4) Consumers’ Ideological Image ☆ Nougyaru (City girls playing pretended farmers) ☆ Shibuya-mai (Rice sold by fashionable Shibuya girls) ☆ Datsu Sara Nogyo (Good-bye to salaryman’s life, start farming) ☆ Shinki Shunou (Become a farmer after graduation from universities) ☆ Chokubaisho (Farmers’ market)

Agricultural Boom Since around 2008 (3/4) A wave of books and other publications Full of dreams in agriculture ☆ Yell for farmers! ☆ Peaceful and humble life of farmers! ☆ Miracles in agriculture! ☆ Let’s start farming! ☆ Japan’s great farm products! ☆ Punish JA and/or MAFF!

Agricultural Boom Since around 2008 (4/4) Aso, Hatoyama, Kan, Noda ： Agriculture as a growing industry Winning favor among urban dwellers (and business leaders) by declaring “I support agriculture” JA’s loss of political power Commercial-industrial sector as a major stumbling block against trade liberalization New Political Dynamics

Topics 1. Poor performance of Japanese agriculture 2. Why so poor? 3. In contrast, ‘agricultural boom’ since around Why such a boom?

Once It was Manchuria, Now It Is Agriculture Victories in Wars against Russia and WWI→Pride of a ‘First Class Power’ 1920Great Reactionary Depression 1928 Election System Reform (single-sheet election system) 1929Jun’s Reform 1930Climax of Jun’s Reform: Lifting the Gold Embargo 1931Manchuria Boom Miraculous Growth →Pride of ‘Japan as Number One’ 1990Burst of the Bubble 1996 Election System Reform (single-sheet election system) 2001Jun’s Reform 2007Climax of Jun’s Reform: Dissolution of the Diet calling for Revitalization of the Postal Services 2009Agriculture Boom Escapism of Japanese Society Jun=Jun-nosuke Inoue Jun=Jun-ichiro Koizumi

Behind misunderstandings Characteristics of Japanese society Homogeneous Geographically Isolated Characteristics of Japanese society Trap of Pundits Trap of Nostalgia Trap of Economics

27 Japanese society before WWII

28 Japanese society after WWII

29 Real democracy (private right assertion +participatory democracy