Comment on “Political Economy of Agricultural Reform in Japan under Abe's Administration”

• Author: Hal Hill
• Date: 01 January 2018
• DOI: http://doi.org/10.1111/aepr.12209
• Published date: 01 January 2018

Comment on “Political Economy of

Agricultural Reform in Japan under Abe’s

Administration”

Hal HILL†

Australian National University

JEL codes: Q13, Q18, P16

Accepted: 25 July 2017

Masayoshi Honma and Aurelia George Mulgan (Honma & George Mulgan, 2018)

bring deep expertise to bear on the fascinating and complex story of Japanese agricul-

tural protection, particularly as it relates to rice. They argue, plausibly, that agriculture

is a test case for the success or otherwise of Prime Minister Abe’s“third arrow,”

including his strategy “… to destroy the ‘iron triangle’of vested interests linking the

Ministry of Agriculture, Fisheries and Forestries (MAFF), the Liberal Democratic Party

(LDP), and agricultural cooperative organization,”the Nokyo or JA.

Honma and George Mulgan commence with an overview of agricultural policy

under the Abe administration, based on the June 2014 Revitalization Strategy and its

four main objectives. Their overall assessment is that progress is mixed, noting that

“… the Abe administration continues to stray off course in terms of rice policy ….”

The first objective is the revision to the rice production adjustment system, in effect

the cartel that maintains the price of rice based on production restrictions. The govern-

ment has announced that it will stop allocation production volumes in FY 2018, but

such an outcome remains uncertain. Second, and related, is reform of the agricultural

committees and cooperatives that underpin and sustain the regulatory system. Here

the authors observe progress. Other objectives include reforming and diversifying the

distribution channels for dairy products, and building domestic and international agri-

cultural value chains. Agricultural exports in 2016 were valued at $6.9 billion and the

government wishes to increase this figure. In passing, for a quintessentially resource-

poor economy, I am surprised both at the size of this figure and the export goal.

Honma and George Mulgan underscore the bases of the traditional political power

of the Nokyo. They see the Agricultural Cooperative Law, 2015, as a major step for-

ward in freeing up the system, enabling small farmers to exit so as to allow larger

farmers to achieve scale economies. One problem is the existence of part-time farmers

who are not economic producers but who are resistant to change. But Honma and

George Mulgan point out that electoral dynamics are changing, especially the facts that

†Correspondence: Hal Hill, Arndt Corden Department of Economics, College of Asia and the

Pacific, Australian National University, Canberra 2601, Australia. Email: hal.hill@anu.edu.au

© 2018 Japan Center for Economic Research 145

doi: 10.1111/aepr.12209 Asian Economic Policy Review (2018) 13, 145–146