1. 9/14/2006 at Korea Rural Economic Institute
New Direction of Japan’s Agricultural Policy: Concealed Reality of “Deregulation” and “Decentralization”
Yoshihisa Godo
Professor of Economics
Meiji Gakuin University

2. Background 神門善久『日本의食꽈農---危機的本質--- 』NTT出版、2006年6月（日文） 目的
Reveal 日本社会의集団的自己催眠
Propose 재処方箋

3. Importance of Japan’s Agricultural Policy for Korea
Trade Negotiations
Similarity between Japan and Korea
Misinformation (by Japanese Researchers and Mass Media)
Agri. Problem Represents Japanese Society’s Most Serious Problem (= Citizens’ Negligence of their Duty of Participatory Democracy)

4. Today’s Remark (1) Centerpiece of Agri. Problem
Citizens’ (both farm and non-farm households) negligence of their duty of participatory democracy (in particular for land use planning).
Citizens’ selfish requests on land use
Lack of strict land use plan
Unclearness in implementation of land use regulation
Inefficient use of farmland
Malfunction of price mechanism in farmland market
Negative legacy for future generations
Poor performance of agri. sector
Myopic land development

5. Today’s Remark (2) Farmers’ biggest concern:
How to obtain windfall benefits (capital gains from farmland conversion for non-agri. uses) by manipulating farmland use regulations
Not agri. income

6. Today’s Remark (3) MAFF’s biggest concern:
How to bring windfall benefits to farmers under pretext (MAFF’s official objective) of “promotion of agriculture”
Not agri. industry

7. Today’s Remark (4) Turning point in the mid-1990s:
How to have windfall benefits?
Before the mid-1990s:
Public construction work
After the mid-1990s:
Laissez faire on farmland use

8. Today’s Remark (5) Japanese citizens’ choice
=Self-destruction of agri.
☆Enjoy myopic benefits by sacrificing high potential of Japan’s agri. industry.
☆ Future generations are the biggest victims of today’s self-destruction policy.
☆ Even researchers and mass media are promoting this self-destruction by making irrelevant (apparently relevant) remarks

9. Plan 1.Poor Performance of Japanese Agri. Sector.
2. Agri. Political Dynamics
3. Turning Point in the mid-1990s.
4. Japan’s New (and Harmful) Direction of Agri. Policy

10. 1. Poor Performance of Japan’s Agri. Sector
1. High Protection for Agricultural Products
& Decreasing Food Self-sufficiency Rate
2. Government Supports > Agricultural GDP
Inefficient Small-size Farming
Optimal size = hectare
Actual size = less than 3 ha
(75% of total farmland)
Poor Farmland Policy

11. Average cost curve
(‘000 yen/60 kg)

13. Voting Power vs. Efficiency

14. Characteristics of Japanese Agriculture
Limited Flat Area
Urban Land Use vs. Agricultural Land Use
(Good for non-agri. use = good for farming )
Small-size Farming vs. Large-size Farming

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

17. Acreage of and Farmers’ Capital Gain from Farmland Conversion

18. 2. Political Dynamics in Japan’s Agri. Sector

20. Regulation on Farmland Use
EAA Zoning (by local government)
(=Exclusively Agricultural Area)
*Preferential treatment in property taxes and
agri. subsidies
*Prohibition against farmland conversion
Farmers’ Egoistic Requests:
* To include their farmland in EAA for ordinary times
* To exclude their farmland from EAA when a farmland conversion plan occurs

21. ‘Delicious’scenario for farmers (as well as JA, MAFF, politicians)

22. Collusion between farmers and politicians
Farmers support politicians in election
Politicians manipulate farmland use regulations according to farmers’ requestｓ.
This manipulation provides windfall benefits to farmers. Namely,
a. Exemption from farmland tax
b. Agricultural subsidies
c. Capital gain from farmland conversion to non-agri. land use.

23. 3. Mid-1990s = Turning Pｏｉｎｔ ｏｆ Ａｇｒｉ. Ｐｏｌｏｔｉｃａｌ Ｄｙｎａｍｉｃｓ
Election system
Individualism in rural community
Criticism on public construction works
Bashing on bureaucrats
Agricultural trade and market liberalization
Financial liberalization

24. Profit and Loss of major activities (the author’s estimates)

25. Decline of traditional agricultural protectionism
Unanimous resolution against rice market opening
1990s:
UR agreement (6.1 trillion yen)
Jusen problem (685 billion yen)
2000s:
Ignorance of agri. issues in the LDP Presidency race in 2003
Big defeats of agri. lawmakers in the upper house election in 2004
Turning point in the mid-1990s

26. 4. Japan’s New (and Harmful) Direction of Agri. Policy
More freedom (laissez faire) of farmland conversion.
Under the pretext of “deregulation” and “decentralization.”

27. Fake Stories
Farmland Use is strictly regulated by the Agricultural Land Law.
Deregulation and decentralization of farmland regulations are critically important to revive agriculture
MAFF and farmers strongly oppose business leaders’ requests of deregulation and decentralization of farmland policy.

28. Tragic Scenario
Currently, MAFF, JA and Agricultural Committee pretend to oppose free acquirement of farmland by non-agricultural stock companies so as to gain time for relaxing farmland use regulations.
After fully relaxing farmland use regulations, they welcome (apparently against their will) non-agricultural sector’s requests on free acquirement of farmland.

29. Populism of Researchers and Mass Media
Researchers and mass media play up citizens by attributing all the evils to bureaucrats.
This “bureaucrat bashing” benefits bureaucrats, small-size farmers, researchers and mass media.