Abstract
The principal objective of this study is to analyze welfare effects of Japan’s rice import quota focusing on the simultaneous buy and sell (SBS) of the rice importation minimum access (MA) policy. Based on the utility function specified in this study, the constructed model is adopted to measure consumption patterns through estimating elasticity of substitution between imported rice and Japan’s domestic rice, and consumers’ preference parameters for different kinds of rice. The results showed that Japanese households prefer domestic rice to the imported rice. Besides, three scenarios of adjusting rice quota volumes were carried out to examine the changes in consumer prices of imported rice and Japanese consumers’ welfares. The results revealed that tariff equivalents of the SBS import quota almost doubled the scale of the mark-up, and the intervention by the Ministry of Agriculture of Japan did cause non-tariff barriers to trade (NTBs). Finally, if the SBS rice quota quantity was fixed at or larger than 180 thousand tons every fiscal year, the consumer prices of imported rice in Japan’s market would decrease to be less than the prices of Japan’s domestic rice, and therefore the imported rice would have more price advantages in this scenario.
Highlights
Japan had prohibited rice imports for long periods of time, but through the Uruguay Round of negotiations, Japan conceded a limited opening of its rice market and permitted minimum access (MA)rice imports starting in 1995
The estimated preference parameters are greater than 0.5, and it supports the finding that Japanese households prefer domestically produced rice compared with imported simultaneous buy and sell (SBS) general rice in the study
In order to exempt domestic rice from accepting a strike by foreign rice, MAFF imposes a mark-up on imported SBS rice
Summary
Japan had prohibited rice imports for long periods of time, but through the Uruguay Round of negotiations, Japan conceded a limited opening of its rice market and permitted minimum access (MA)rice imports starting in 1995. Japan had prohibited rice imports for long periods of time, but through the Uruguay Round of negotiations, Japan conceded a limited opening of its rice market and permitted minimum access (MA). The MA scheme entitles a certain quantity of foreign rice to enjoy a zero tariff rate when the rice is imported into Japan’s market. In 1999, Japan permitted imported rice to enter through the customs tariff with a prohibitive tariff rate of about 351 yen/kg, which was later lowered to 341 yen/kg in 2000. With regard to the MA quota policy, foreign rice is subjected to a lower mark-up limitation of 292 yen/kg. The total import quota of MA in brown rice has been adjusted to 767,000 tons since the 2000 fiscal year including a simultaneous buy and sell (SBS) system. The quota level designed in 2000 has been maintained until World Trade Organization (WTO) negotiations
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