Reforming Agriculture and Promoting Japan's Integration in the World Economy

Abstract

The problems of Japanese agriculture – in particular low productivity and the prevalence of part-time farmers and small plots have been evident for the past 50 years. The high level and distortionary nature of agriculture support imposes burdens on consumers and taxpayers, undermines the dynamism of the farming sector and complicates Japan’s participation in comprehensive bilateral and regional trade agreements that would boost its growth potential. The priority is to shift to measures decoupled from production and gradually reduce border measures. Continued failure to implement necessary reforms threatens the future of the agricultural sector. In the absence of fundamental reform, the Japanese agriculture will continue to wither, trapped in a cycle of low productivity, low earnings and dependence on subsidies and import protection. The time for reform is now. A more open and market-oriented sector would also facilitate participation in comprehensive regional and bilateral trade agreements.