Tokyo Report: Talks on Rice Policy Revision Gaining Steam

Tokyo, June 8 (Jiji Press)--The agriculture ministry and ruling
party lawmakers, especially those affiliated with farm organizations, are
stepping up their tug of war over a possible revision to the policy of rice
acreage reduction as a focal issue of Japan's farm policy reform.
Shigeru Ishiba, minister of agriculture, forestry and fisheries,
insists on revising the 40-year-old reduction policy, pointing out that it
has failed to reverse the decline of the nation's agriculture sector.
Noting that the income of farmers in Japan has dropped by half over
the past 15 years and that 60 pct of them are now older than 65, Ishiba says
that continuing the current policy is "impossible."
Despite government expenditures totaling 7 trillion yen, or 200
billion yen annually, on subsidies to farmers who participate in rice
production cutbacks, the dire situation of agriculture makes a policy review
unavoidable.
Although lawmakers in the ruling Liberal Democratic Party who
represent agricultural constituencies are eager to win ministry backing for
strong financial support for farmers ahead of Japan's imminent elections for
the House of Representatives, the lower chamber of parliament, some admit
the need to discuss alternatives to the policy.
The farm ministry maintains that Japan's rice production policy
should take into account the interests not only of farmers and farm
organizations but also of taxpayers and consumers. A key issue, therefore,
is the scale of fiscal spending to maintain rice prices and indemnify
incomes for growers.
In April, the ministry released five alternatives to the rice
acreage reduction policy, including its reinforcement, relaxation and
maintenance, and their possible effects on rice prices.
For example, if the reduction policy is abandoned completely and
farmers grow rice as they wish, market prices of the staple would drop by
half in the first year, the ministry said.
But the ministry did not estimate the fiscal expenditures necessary
to finance the five alternatives. It will work out more detailed policy
options after discussing with the Finance Ministry.
While consumers would benefit from sharp reductions in rice prices
if the reduction policy is completely eliminated, such a step would be a
serious blow for farmers.
Ishiba therefore admits that a complete end to the policy is
"impossible." One alternative may be reviewing subsidies for rice production
cutbacks and letting farmers decide whether to take part in the program.
Some LDP lawmakers are calling for careful deliberations on the
policy after the coming Lower House election. In the 2007 election for the
House of Councillors, the upper chamber, the party suffered a stunning
defeat after the leading opposition Democratic Party of Japan pledged income
indemnities for farmers.
Ishiba believes the ministry and the LDP will be able to iron out
their differences as they agree on the need to revitalize the nation's
agriculture.