ISSN 2330-717X

Narrow Policies For Japanese Agriculture Won’t Bear Much Fruit – Analysis

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By Shuji Hisano*

Japanese Prime Minister Yoshihide Suga’s speech at the 204th session of the Diet in January 2021 reaffirmed his pledge to boost exports in the agricultural, forestry and fisheries sectors, transforming them into growth industries.

Yet his statement failed to reference the Basic Plan for Food, Agriculture and Rural Areas, a five-year policy plan based on the 1999 Basic Law on Food, Agriculture and Rural Areas, updated in March 2020, that sets out the government’s policy direction across a range of areas. Suga neglected to focus on major related goals contained within the plan such as improved food self-sufficiency, sustainable agricultural development and the promotion of rural areas.

Against the backdrop of a declining population and dwindling domestic market, the promotion of agricultural exports could be a potent policy measure to support an economically viable agricultural production base and rural economies. But narrowly targeting export-oriented agricultural and food business entities for special support will not be enough to achieve this.

The government should instead focus on rural economies as a bioregional and socioeconomic whole, making full use of the multifunctionality of agriculture and revitalising the rural communities that consist of diverse actors including smallholders and family farmers. These rural locals do not necessarily depend on mainstream or international markets, but still contribute to rural economies and community development through their multifunctional activities which should also be prioritised in the policy.

The government also plans to ease regulations on agricultural support funds, expanding the range of operations they can invest in. In addition to agricultural corporations, the wider range will cover agri-food businesses specialising in smart-tech development, distribution, food processing, and export and overseas sales, as well as firms in the fisheries and forestry industries. These funds will be initiated by the private sector, reflecting hard lessons learned from the failed management of A-FIVE, a loss-making public-private fund.

But it is unclear whether newly launched investment funds will lead to the sustainable development of local agriculture and of rural economies as a whole. The government support will be concentrated on 27 key agricultural, forestry and fisheries products in regions focusing on production for export, with lower priority given to the majority of others needing policy support in other ways.

Besides, much of the value of Japanese agricultural exports comes from processed foods using imported ingredients such as wheat, vegetable oils and sugar. Wagyu beef, one of Japan’s biggest agricultural export products — worth 29.7 billion Japanese yen (US$237 million) in 2019 and expected to increase to 160 billion yen (US$1.47 billion) by 2025 — depends on imported feed ingredients such as maize and soy meal.

In 2019, the total value of the 16 agricultural products out of the 27 targeted products (excluding highly processed foods, alcoholic drinks, forestry and fisheries products) was less than 100 billion yen (US$900 million), representing just 1 per cent of Japan’s 9 trillion yen (US$83 billion) worth of agricultural production. Even a severalfold increase in production in these targeted agricultural products by 2025–2030 would not make much difference to the average farmer’s income and rural economies overall.

This focus on exports may be an attempt to divert attention away from the rapid growth in agricultural imports in recent years, accelerated by regional free trade agreements such as the Trans-Pacific Partnership, the Japan–EU Economic Partnership Agreement and the Japan–US Trade Agreement.

The question for Japanese agricultural policy is not whether to be ‘open’ or ‘protectionist’ — the question is what to prioritise and how. The benefits of increasing exports would largely be enjoyed by a small number of producers in advantageous positions located in preferential regions.

Meanwhile, an export-oriented ‘selection and concentration’ policy is at odds with a sustainable, resilient and inclusive transformation of agriculture and food systems that is desperately needed in the face of complex social, economic and ecological challenges. This sort of sustainable transformation is attracting attention from the international community and is being gradually implemented in many regions, notably in light of the COVID-19 pandemic and other shocks causing food insecurity.

As a country dependent on food imports, Japan cannot escape these shocks. What the country needs is a holistic approach that recognises the multidimensional nature of food, agriculture and rural spaces, which cannot be sustained through focusing exclusively on an export-oriented and corporate-centric agricultural system.

Agricultural and food policies should be based on the Basic Law on Food, Agriculture and Rural Areas. Article 3 clearly identifies ‘the multiple roles that agriculture plays through stable production in rural areas, from the conservation of national land, water resources, and the natural environment to the formation of a good landscape and maintenance of cultural tradition, in addition to its conventional role as a primary food supplier’. These multifunctional roles of agriculture can be sufficiently fulfilled for the future only through supporting diverse actors and economies across regional foodscapes in a sustainable way.

What should be added here is the multiple roles that food plays as a policy lens through which health and wellbeing, environment, community development, social and cultural inclusiveness, urban-rural linkages, as well as food security, can be addressed. These multidimensional aspects of agriculture and food policies cannot be fulfilled by merely focusing on promoting exports and improving industrial competitiveness.

*About the author: Shuji Hisano is Professor of International Political Economy of Agriculture at the Graduate School of Economics, Kyoto University.

Source: This article was published by East Asia Forum

East Asia Forum

East Asia Forum

East Asia Forum is a platform for analysis and research on politics, economics, business, law, security, international relations and society relevant to public policy, centred on the Asia Pacific region. It consists of an online publication and a quarterly magazine, East Asia Forum Quarterly, which aim to provide clear and original analysis from the leading minds in the region and beyond.

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