Evaluating the Impacts of Food Safety Policies on Japan’s Rice Imports Based on the Simultaneous Buy and Sell System

Abstract

This study evaluated the impacts of food safety policies on Japan’s Simultaneous Buy and Sell rice imports through measuring tariff equivalents of food safety policies. In order to construct an estimated model, a Japanese consumer’s utility function is introduced and developed with consumer’s preference parameters and elasticity of substitution. In the empirical study part, Japan’s positive list system and rice traceability were analyzed and assessed as critical food safety policies. Results showed that after the implementation of the positive list system, consumers’ preference for foreign rice and the substitution elasticity diminished. This decreasing tendency was quite similar to the results after the enforcement of rice traceability. The tariff equivalents of food safety policies on imported rice fluctuated around ¥50 yen/kg from fiscal year 2000 to 2005 and decreased because of the global grain price hike after 2006. The tariff equivalents soared in 2010, which was induced by the traceability regulation, and then dulled during Japan’s earthquake and tsunami in 2011. Subsequently, after the recovery from natural disasters, the tariff equivalents of food safety policies became higher. Therefore, food safety policies had made imported rice less attractive, weakened the competitive power of rice exporting countries, and had statistically significant impacts on Japan’s rice importation.