chapter  10
25 Pages

Adjustment Policies for Japanese Agriculture in aChanging World— Yujiro Hayami 368Development of Trade in Agricultural Products

Development of Trade in Agricultural Products Whenever there is friction between Japan and its trading partners, mention is invariably made of the closed nature of Japanese agricul­ture. The United States, Europe, and the Oceanic countries have repeatedly demanded that Japan liberalize its imports of agricultural products. Moreover, the high price of food has also occasioned crit­icism in Japan itself of the country’s closed agricultural policies.It is clear from table 10-1 that the food prices charged Japanese consumers are high by international standards. Although these figures collected by agricultural attaches to the U.S. Embassy tend to overstate Japanese prices, other data substantiate the conclusion that Japanese food prices are generally higher than those in the West. 1 It is obvious that such prices result from a protectionist agricultural policy. Of the twenty-seven items subject to import quota restrictions

Y U JI R O H A Y A M I 369 at present, twenty-two are agricultural products. Thus, it is no wonder that agriculture is a lightning rod for trade liberalization pressure.Yet, this is not to imply that Japan’s level of protection is substan­tially higher than that of other countries. Trade in agricultural prod­ucts was rapidly liberalized in the process of Japan’s rapid economic growth. As seen in table 10-2, the number of agricultural and marine products subject to import quota was reduced from seventy-three to twenty-two (see also table 10-3). Although Japan still continues to rank alongside France among the industrialized countries having the larg­est numbers of agricultural products subject to import quotas, these figures do not accurately reflect the extent of agricultural protection. The United States, for example, supplements its quota restrictions with General Agreement on Tariff and Trade (GATT) waivers on thirteen items, such as dairy products, and there are also legal pro­visions for invoking import controls when imports of meat exceed certain levels. The European countries’ trade protection centers around variable import levies that are designed to eliminate the price differ­ence between imports and domestic products; the levies thus collected are used to finance the European Community’s (EC’s) common ag­ricultural policy. By comparison, Japan does not appear that protec­tive of its agriculture relative to other industrialized countries.In fact, Japanese agricultural and marine product imports increased sharply during the period of rapid economic growth, as shown in table 10-4. From 1965 to 1979, imports of agricultural, forestry, and marine products rose approximately fivefold, and imports of agri­cultural products alone 3.5-fold. Because there was only a marginal increase in agricultural, forestry, and marine product exports during this same period, a net foreign currency disbursement for agricultural, forestry, and marine products increased nearly sixfold, and there was likewise a 3.6-fold increase in the agricultural trade deficit. With the extremely rapid increase in the imports of industrial materials, ag­ricultural products did come to account for a smaller percentage of the total import bill; yet Japan’s doors may be said overall to have been very rapidly opened to agricultural imports.The result has been a decline in Japan’s self-sufficiency in foods (see table 10-5). There has been a precipitous drop in self-sufficiency in crops such as wheat, feed grains, and soybeans that are heavily land intensive and with which Japanese production is at a comparative disadvantage. Although complete self-sufficiency or even surplus pro­duction is maintained for rice with price supports, the self-sufficiency for all cereals is less than 40 percent, the lowest of any major indus­trialized country.