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

• Author: Kazuhito Yamashita
• Date: 01 January 2018
• DOI: http://doi.org/10.1111/aepr.12210
• Published date: 01 January 2018

Comment on “Political Economy of

Agricultural Reform in Japan under Abe’s

Administration”

Kazuhito YAMASHITA†

The Canon Institute for Global Studies

JEL codes: Q13, Q18, P16

Accepted: 26 July 2017

Honma and George Mulgan (2018) evaluate Prime Minister Abe’s reform of Japanese

Agricultural Cooperatives (JAs). Prime Minister Abe has called the JA a symbol of

“regulations as solid as bedrock”and put great effort into reforming it. By analyzing

the process of reaching an agreement among the various stakeholders, such as the

Ministry of Agriculture, Forestry and Fisheries (MAFF), the ruling Liberal Democratic

Party’s (LDP’s) “agricultural tribe”of Diet members, JAs and the Prime Minister’s

office, Honma and George Mulgan conclude that despite of the decline in the political

power of Japan’s farmers owing to the aging and decreasing farming population “Diet

members representing rural and regional constituencies still find it difficult to oppose

JA out of fear of losing farmers’votes”since they seem to play a decisive role in the

election campaign in a lot of single-seat districts of the Diet.

I agree with Honma and George Mulgan’s conclusion. I have long proposed the

abolition of the rice acreage reduction policy which leads to higher prices than other-

wise would be the case, so that small-scale inefficient part-time farmers may part with

their farmland which will then be leased to full-time farmers if direct payments to

those farmers allow them afford to pay the rent for the land. In theory, the cost of pro-

ducing rice would decrease through the expansion of the farm size of full-time farmers

enabling the Japanese rice industry to enhance its international competitiveness. Every

time I explain this proposal, the audience almost always asks me why it could not

come true. I answer that it is politically difficult since politicians are afraid of losing

their political campaigns or their jobs by letting a small but organized block of votes

go to their opponent. A 50% to 50% race turns out to be a 48% to 52% race if the

farmers’votes amount to 2% of the electorate and they all switch sides. Politicians can-

not ignore the JAs which have managed to maintain a large number of part-time

farmers through the high rice price. This made the JAs into the second largest bank in

Japan, as part-time farmers saved their earnings in JA bank accounts.

†Correspondence: Kazuhito Yamashita, The Canon Institute for Global Studies, 11th Floor,

ShinMarunouchi Building, 5-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-6511 Japan.

Email: yamashita.kazuhito@canon-igs.org

© 2018 Japan Center for Economic Research 147

doi: 10.1111/aepr.12210 Asian Economic Policy Review (2018) 13, 147–148