Japan's Disappearing Small Farm Community

John de Boer (University of Tokyo)

The Economist cites Japan as one of the most egregious offenders of the Uruguay Round Agreement on Agriculture.*1 Japan's duties on grains average about 63% and its tariff on rice installed last year was closer to 1,000%. Overall support to agriculture in Japan remains well above the OECD average having spent approximately $45 billion in total agricultural subsidies in 1997 with most of these supports considered by the WTO as 'most trade distorting'. According to the Economist, Japan is not alone. Within the OECD annual state payments to the agricultural sector exceed Africa's entire GDP and domestic supports in America, Europe and Japan account for about 80% of the World's total. OECD countries rationalize these payments by claiming that agriculture provides social benefits not valued by the market such as environmental protection, food security and the maintenance of rural communities (the multi-functionality argument). The Economist also points out a psychological dimension, which is particularly true for Japan. Koichi Haraguchi, Japan's ambassador to the WTO, is quoted as saying that "he realizes Japan's agriculture is less than efficient: other countries have natural advantages in production that could, if unrestrained by tariffs and domestic support, put Japan's farmers out of business. But the Japanese want to maintain their farms almost regardless because they cherish their own agriculture, they are prepared to pay for it."

The question that remains unanswered is by paying three times more in food costs than any other major industrialized country*2, whether Japanese are protecting their small, most vulnerable, and valuable traditional farm communities?

As of February 1, 2000 the total number of farm households in Japan was 3,120,000, equivalent to 13,460,000 persons or 10.6% of the entire population. 85.8% of these farms were small cultivating less than 2ha of land.*3 Unfortunately, it is precisely these small isolated farms that are closing down while large farms (more than 10ha) continue to grow in number and in prosperity.

Between 1995 and 2000, the total number of farms cultivating less than 2ha decreased by 35.7% while the number of large farms grew by 42.9%. Changes in the number of farm households by agricultural income have shown a similar pattern of decline. With the number of members in the average Japanese farm household more than double the national average (4.12 member), this continued reduction in income is making life difficult for rural farm households (Chart).

The disproportionate food costs borne by Japanese consumers are not helping to preserve Japan's traditional small farm communities. According to the 2000 World Census of Agriculture and Forestry, traditional farming communities with a population of less than 100 households decreased by 24% in 2000 from 1995. Similarly, the environmental benefits and the rich traditional and cultural heritage that they embody remain unprotected. 94.2% of the traditional rice terraces and paddy fields at valley bottoms are not being preserved. Of the ancient reservoirs, delicate lakes and marshes approximately 60% are unprotected and 83% of those being preserved are as a result of the initiative of the inhabitants in the communities concerned. Only 5.7% of the traditional arts, crafts and festivals and 16.9% of the traditional streets and buildings possessed by these communities are receiving assistance for preservation.

Japanese consumers are paying a high price for food, but their cherished farms are disappearing. Instead of serving to protect them, Japan's domestic agricultural supports are feeding the rich, large industrial farms at the expense of Japanese consumers and their cherished small farms.

*1 The Economist, "Special Report: Agricultural trade," June 9th-15th, 2001, pp. 81-83.
*2 1998 Japan Agricultural White Book, Ministry of Agriculture, Forestry and Fisheries.
*3 Statistics and Information Department, Japan Ministry of Agriculture, Forestry and Fisheries, "Report of 'The 2000 World Census of Agriculture and Forestry' Summary, 30th November, 2000.