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TPP off Japan's trade agenda for the time being

Reading Time: 6 mins

In Brief

Japan’s triple earthquake, tsunami and nuclear disaster continue to have widespread ramifications for Japan’s agricultural sector and agricultural trade policy.

No doubt, the Australian Prime Minister’s advisors will be closely monitoring developments, or the lack thereof, as she heads off to Japan on 20 April.


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Five main prefectures have borne the brunt of the disaster. Miyagi, Fukushima, Iwate, Ibaraki and Aomori are also major agricultural producing areas. Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) has produced an assessment that reveals the area of cultivated land either washed away or damaged by flooding in these five prefectures (and also in Chiba). Of almost a million hectares under cultivation in these six prefectures, 23,600, or 2.6 per cent was damaged (85 per cent of it rice paddies and the rest upland fields). In Miyagi 11 per cent of farmland was washed away or damaged by flooding.

Miyagi was the hardest-hit prefecture. It estimates damage to agriculture at ¥414.2 billion (US$ 5 billion), a figure that is expected to increase. This includes ¥357.3 billion (US$ 4.3 billion) in agricultural land and facilities, ¥30.1 billion (US$ 0.36 billion) in greenhouses, storehouses and other infrastructure, ¥2.6 billion (US$ 31 million) in agricultural products, and ¥2.1 billion yen (US$ 25 million) in damage to livestock and related facilities and products. One report has revealed that approximately 80 per cent of cultivated land in the eastern districts of Miyagi prefecture has been damaged by the tsunami. It is assumed that the planting of crops will be impossible this year, and for several years to follow.

On top of this, Chief Cabinet Secretary Yukio Edano and Minister of Agriculture, Forestry and Fisheries Michihiko Kano announced in a press conference on 9 April that rice fields would be subject to planting restrictions if the concentration of radioactive caesium exceeds 5000 becquerel (a radioactivity measurement unit) per square kilometre. In a report presented on 6 April by Fukushima prefecture, there were four districts where the concentration of radioactive caesium exceeded 5000 becquerel. The MAFF has also released a table listing all agricultural products that are subject to shipping or consumption restrictions due to the detection of radioactive substances, which is extensive.

The situation in agriculture affects the government’s trade policy in several ways.

Firstly, the farmers in these areas will be looking to government rescue packages and measures to ease their losses and to allow them to get back to producing and marketing their produce. To impose any kind of a free trade agreement on Japanese farmers at this time would be like adding insult to injury. There are widespread perceptions that free trade agreements with major agricultural producers such as Australia and the United States, and Japan’s participation in the TPP, would come at great cost to Japanese agriculture. This argument would carry a great deal more weight in the present circumstances than previously. Not surprisingly, the Kan administration has taken these trade policy ventures off the policy agenda for the time being, and the prime minister is immersing himself in a revival scenario in order to save his government. It would be too politically risky for his administration, which has not been able to halt the slide in its public popularity, to broach such initiatives at this time. The emphasis will be on public spending as the means to revive industries and regions affected by the disaster and on assistance to these industries, not on reforming them.

Secondly, it is possible that the government’s policy of income subsidies to farmers may be reviewed owing to changed fiscal conditions. The main giveaways incorporated in the DPJ’s 2009 manifesto are childcare allowances, abolition of highway tolls, tuition-free public high schools and farm income subsidies. These may all be adjusted in an attempt to obtain funds necessary for the rebuilding process. Both the main opposition LDP and Komeito parties are encouraging the government to review these policies in order to free up more fiscal resources. As a result, they may be revised or frozen as part of the horse-trading needed to pass the supplementary budgets and budget-related bills vital for financing reconstruction. As direct income subsidies for farmers would compensate agricultural producers for price falls consequent upon market opening, they represent a vital support to the government’s free trade policy. Hence, the likely fiscal squeeze may indirectly undermine any moves to liberalise trade.

Thirdly, one of the big selling points of the government’s interlinking of agricultural reform with free trade agreements was the prospect of increased agricultural exports. A number of countries have either banned or are restricting food imports from Japan, including Australia, and the likelihood is that Japanese agricultural exports will be viewed internationally as carrying greater risk of radioactive contamination. In these circumstances, the argument that agricultural reform could lead to greater food exports no longer applies.

Fourthly, the food security argument as a justification for maintaining high levels of agricultural protection will again arise in the wake of the current disasters. This is not because Japan is suffering a significant production shortfall (there is an ample supply of rice, for example), but because the triple disasters precipitated a distribution crisis, with food disappearing off the shelves of many stores. These events will re-awaken in the minds of the Japanese public a sense of how domestic or international disasters of one kind or another can disrupt vital food supplies. In the event of an emergency, Japan simply cannot feed itself.

The powerful and emotive concept of food security is absolutely pivotal to arguments justifying the maintenance of agricultural import barriers and the jewel in the crown of agricultural protectionist arguments against market opening. It is a persuasive weapon in the hands of vested agricultural interests not the least because it aligns so clearly and unambiguously with national concerns in a way that resonates amongst the Japanese public at large. Anxieties about food security are deeply rooted in Japanese history. They originate in the constraints on total agricultural output arising from the limitations of land area, land use, and periodic famine and food shortages in the past. Concerns about national food supply were evident in the pre-war years and also in the immediate post-war period when rapid increases in rice production were necessary to feed a nation on the verge of starvation. A similar emphasis on simply maximising domestic production will be seen in government agricultural policy.

In crisis lies opportunity, however. One constructive proposal has been advanced by Terashima Jitsuro, President of the Japan Research Institute, who argues that it will take the creation of a new food production and distribution industry to revive the regional economy in Tohoku, where food is a key industry. The revival of the regional food industry (interlinking agricultural production, processing and distribution stages) will need the input of technology and funds from the industrial sector, which may contribute to the industrialisation of agriculture in that area and engender greater cooperation between the agricultural and industrial sectors rather than conflict (as in the case of the debate over the TPP). Industrialising agriculture, which is strongly supported by the Ministry of Economy, Trade and Industry (METI), is a key aspect of not only the farm sector’s revival but also its ability to cope with further market opening.

Aurelia George Mulgan is Professor of Politics at the University of New South Wales, Australian Defence Force Academy.

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