Old and tired, some Japan farmers see trade-pact jolt as only answer
TSURUOKA (Reuters) – Far from dreading the prospect of a Pacific trade deal that would open up Japanese markets to higher grain and meat imports, rice and pig farmer Kazushi Saito embraces it.
The 58-year-old, whose lush paddy fields in the Shonai plain overlook the Sea of Japan, is in the minority among farmers generally opposed to a pact being negotiated in Hawaii this week that could make selling their products harder.
But faced with a declining population in Yamagata prefecture where he lives, falling per capita rice consumption and that the average age of Japanese farmers is 67 and rising, Saito believes something has to give to rescue the struggling sector.
“I support the TPP [Trans-Pacific Partnership] because the government will probably change its policies to prevent agriculture from being destroyed,” he said, referring to a 12-nation pact that would cover 40 percent of the world’s economy.
Japan’s reluctance to open up to more imports, including of rice, has been a major stumbling block to the TPP. Tokyo held bilateral talks with Washington to resolve that and other obstacles, including access to the US auto-parts market.
Saito believes Japan’s farming sector, dominated by smallholders and unable to attract a new generation to take over, needs a wake-up call after decades of excessive protection.
“Unless Japan’s government pushes deregulation more and more, farmers will vanish fast,” he said.
Shigeyoshi Ota, who works on a farm nearby, takes a different view.
“I’m really worried about what will happen when the TPP deal is done,” he told Reuters. “The importance of agriculture to Japan’s overall economy is small, as is the farming population. It will be difficult to sway public opinion, so I kind of feel like giving up.”
Agriculture accounted for just 1.2 percent of Japanese GDP in 2013, government data showed, while the number of farmers was 1.7 million in 2014, down from 2.2 million 10 years earlier.
Plowing new furrows?
With domestic demand stagnant and imports set to rise under the TPP, one potential area for growth is exports. But Saito conceded that saturated Asian markets and Japan’s relatively high production costs for rice meant the going would be tough.
“We have no choice but to export,” he said.
Prime Minister Shinzo Abe aims to boost farm-product exports to 1 trillion yen ($8.1 billion) by 2020 as part of his growth strategy, compared with 612 billion yen last year.
Several former Farm Ministry officials, some of them involved in earlier trade talks that allowed limited rice imports into Japan, are now calling for more radical change.
“Protection alone won’t work,” said Jiro Shiwaku, a former vice minister for international affairs at the Agriculture Ministry who was involved in rice negotiations at the Uruguay Round of talks in the late 1980s and early 1990s.
He and others argue that Japanese farmers have been slow to adapt to market forces and must prepare for the day when tariffs are eliminated altogether.
“Japan has poured in money, but agriculture did not become strong,” said Yuki Takagi, a former vice minister at the Agriculture Ministry.
“Management means taking risks,” he said. “Japan’s agriculture, especially rice farmers, have not built their careers in that way, which is fatal. Farming villages are dying out. That is clear.”
Under the Uruguay Round, the government spent about 6 trillion yen between 1995 and 2002 to cushion farmers from the impact of the trade deal on their livelihoods.
Even that brought negligible benefits to some.
“Was there any help to support our income?” asked Ota. “I can’t recall. I don’t have that sense.”
Nevertheless, lawmakers from Japan’s ruling Liberal Democratic Party, backed by farm groups, are demanding that the government introduce measures to ease the burden on agriculture should the TPP be agreed to, according to local media.
With Japan’s debt already mountainous, consumption dampened by an increase in the sales tax and spending under pressure, measures to support farmers could prove a hard sell.
“It will be difficult to gain public support unless the government is selective about its spending,” Shiwaku said. “Everyone is having a hard time after the sales-tax hikes.”