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Coddling rice growers hurts Japanese farming
Who should be growing rice for Japanese consumers 10 years from now?

This is one of the central questions that the reform of government farm policy, announced last year, aims to address.

In essence, the new policy will focus on supporting large-scale farmers as the backbone of Japanese agriculture. It contains a variety of measures to achieve this, including tax-financed income compensation to keep financially struggling farmers in business.

The best element of the policy is the plan to scrap the long-standing gentan program, which attempts to curb production via rice acreage reductions while the government effectively allocates acreage quotas to rice growers.

Scrapping the plan means allowing liberalized markets to determine where rice should be produced, and how much of it.

A number of agriculture corporations have embarked on large-scale farming with great enthusiasm, eager to establish profitable agribusinesses in faithful solidarity with the government's farm policy.

Yet most of them are now struggling to survive. This speaks volumes about the government's policy failure.

The situation leaves no doubt that the acreage reduction program, in conjunction with the strict regulation of rice distribution designed to keep competition out of the market, simply does not reward farmers for good management efforts.

Japanese rice farming is heavily burdened by the negative legacy of the farm policy, which for decades has rigorously controlled both the amount of land devoted to rice growing and the system to market and distribute the crop.

The policy has blunted producers' management acumen, and deprived them of rational thinking and entrepreneurship.

It has also apparently caused a massive exodus of young people from farming villages, accelerating the aging of the farming population.

Agriculture in this country has long been described as overprotected and excessively subsidized. The government has spent a huge amount of taxpayer money on price subsidies and stabilization schemes to protect the interests of rice growers and insulate them from the full impact of market forces.

But this has only hindered the necessary rationalization of farm production and distribution, with costly consequences.

The new, market-oriented farm policy will trigger a decentralization of power within the organization of agricultural cooperatives, encouraging inter-regional competition.

Any increase or reduction in rice acreage in one region will inevitably affect that region's industrial structure, but these changes will undoubtedly lead to creative responses to new situations, thereby revitalizing farming villages.

As well as pushing through its radical policy proposals, the government should also move to upgrade agricultural infrastructure, and make its policy information available as soon as possible to limit confusion in farming communities.

One big challenge confronting policy-makers is how to build a system that makes it easier for rice growers to estimate income from market prices. If the inner workings of the market are clarified, farmer support for the new system will grow.

The farm policy should be designed to help Japanese growers wean themselves from government support and become financially independent.

Farm subsidies should be scrapped, and rice prices should be determined by the market, a venue where producers are directly exposed to the choices of consumers.

Only then will rice growers no longer face the criticism of being coddled by the government, and feel free to take pride in their business.

The principal mission of agriculture is to secure a stable supply of food while simultaneously conserving national land.

Should imported rice take over more than 50 percent of the market share, thereby decimating domestic rice fields and causing enormous damage to the natural environment, the government could respond by budgeting for land conservation measures, as distinct from farm-related expenditures.

Such a policy stance will eventually give rise to an acceptable vision for the viable future of Japanese agriculture, and bring rice growers closer to consumers.
MGR Archive 31.1.2006
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Region Type Price  
Russia Rapan $ 700
USA Jupiter Rice $630
USA Calrose #1 $830
USA Calrose #1 Paddy $480
EU Prices Baldo €660
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