Food self-sufficiency a weak argument against TPP participation
TOKYO —
Most people recognize that government and procrastination go hand in hand. The Japanese government is certainly no exception. Plans to initiate fiscal reform have been drafted time and time again, but a pattern of postponing discussion of their implementation have left
such ambitious drafts in the dust. Proposals to move Futenma have been in negotiation since 2005, but no concrete plan of action has been set to this day.
Although many associate urban Japanese with a vibrant, fast-paced way of life, the pace of government action is painfully slow compared to the speed at which its society moves.
The sluggishness of Japan’s political sphere, however, is about to come to an end. Prime Minister Yoshihiko Noda on Friday announced his decision to participate in talks pertaining to the potentially lucrative Trans-Pacific Partnership – a multilateral FTA intended to liberalize trade across the Asia-Pacific region. Tariffs would be eliminated across the board, and Japanese corporations would enjoy the benefits of greater access to international markets.
Initial estimates by Nomura Securities predicts a 0.5% jump in annual GDP and favorable results for the nation’s auto makers & electronics manufacturers if followed through.
The announcement has not come without its fair share of criticism. Farmers across Japan fear that they will be driven out of business by an onslaught of cheaper imports, and have been the most vocal group thus far in voicing their concerns to the general populace. Others are
worried about a plunge in Japan’s food self-sufficiency, which is already at a historic low of 39%. Are their concerns enough to bar Japan from participating in the TPP?
From an economic point of view, the farmers’ argument is difficult to follow through. Agriculture is only responsible for a fraction of Japan’s economic output. Tariffs used to keep domestic produce cost the economy an estimated $60 billion per year to sustain. Productivity of Japan’s agricultural sector has dropped like a rock, and its self-imposed ban on imported rice has led it to pay more than five times what American consumers pay for rice.
Removing all tariffs from Japan’s agriculture sector would benefit consumers and the greater
economy.Some farmers and politicians protest against the liberalization of Japanese agriculture because of a potential decrease in its self-sufficiency. Let the imports in, they say, and it will push Japan’s ability to feed itself to lows unparalleled in the
developed world.
Though the potential of lower food self-sufficiency may increase, it is important to make the distinction between potential scenarios and reality. The demise of the agricultural sector is based on the premise that everyone will jump ship and buy imported foods if given the opportunity. This is simply not the case. Many Japanese pride themselves on the superiority of domestically made products.
It is this very pride that has left Japanese auto manufacturers with a 92% stranglehold on the JDM market despite zero customs duty on import cars to Japan. Would the same not apply to consumers’ preference of Japanese agricultural products if given the choice, while giving an alternative to those unable to afford locally grown produce?
If Japanese produce is as superior as they claim, should it not be easier to market the produce to the upper classes of other countries involved in the TPP? Should the Japanese government force the less fortunate in Japan to eat something they cannot afford, while
obscenely taxing something that would have been within their reach? The demand for locally grown produce will remain regardless of whether Japan chooses to join the TPP or not.
By contrast, grave consequences will be had if Japan chooses not to act upon this opportunity. The manufacturing sector will suffer under the stress of a strong yen and against competition from tariff-free Korean, Chinese and Taiwanese rivals. Jobs that could have otherwise been created in Japan would be made in other countries. Business activity would slow, and Japan’s economic decline would be exacerbated rather than stemmed.
Japan’s participation in the Trans-Pacific Partnership, then, can be seen as a test of its future survival. The TPP represents an opportunity to spring back from 20 years of economic stagnation. It may be the last chance Japan has of keeping itself relevant to the
global economic community.
Author Infomation
- Peter Dyloco
- My name is Peter Dyloco. I hope to bring a fresh perspective to the issues that face Japan. I enjoy learning new languages and study them during my spare time. I’m able to speak English, Japanese, Taiwanese Hokkien, Mandarin, Cantonese, Tagalog and French to various levels of proficiency. I was born and raised in Hong Kong.
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32 Comments
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-3
gaijinfo
Can somebody please explain, in clear, economic, and objective terms, why having a high self sufficiency is a good thing?
All I hear is high self sufficiency good, low self sufficiency bad.
Japan was most backward and most behind the rest of the world when they were the most self sufficient, and suddenly became rich when they opened up to the rest of the world via trade.
-3
pawatan
Mr Dyloco
Well, I don't know - would it? I would argue it wouldn't - it's hard to argue with price. People choose domestic automobiles not only for quality but because they are generally the cheapest available as well.
Again, evidence? It can certainly be your OPINION that people will not jump ship but where is the evidence? Studies? Experts' thoughts?
No, because most people buy food based on price. A small few buy based on quality (or the perception of), but most don't. Food is by and large very much a commodity.
7
GW
pawatan,
back in the early/mid 90s Japan had a crap rice harvest nation wide, the govt then opened the flood gates importing LOTS of foreign rice, which the locals then mostly left on the shelves unbought, that shud answer yr question.
Japan has had 3+decades to improve efficiency wrt agriculture but has basically done NOTHING when it shud have been improving its lot. farmers are pretty much stuck in a system they have no control, cant change other than trying to lease nearby unused fields.
Its long past due that Japan shud be acting on this irregardless of TPP or any FTA, but the neandrathals in JA & govt have done either nothing or fought against any meaningful changes, Japan simply cannot ignore this any longer.
If Japan doesnt jump on the TPP & get other FTA's going there is going to be massive job losses which have already been occuring for some time now. The likes of Canon & Toyota simply wont be able to afford to stay in Japan if this keep on as they are.
-1
GW
Peter,
FYI the Futenma thing has been a work in ""Progress"" long before 2005, started around 1995-6 or thereabouts & no end in sight!
-2
herefornow
Wow, pawatan, pretty much what myself and other posters have consistently said for weeks. And, your admission that people, even Japanese ones, buy food on price is very telling. First off, it gives credance to the assumption that Japan has long denied equal access to its market by other countries because it knew its claims of superiority were all hogwash. But, more importantly, it implies that you are willing to force the ever-growing number of Japanese living on fixed incomes to pay up to 5 times the world price for stables like rice, because you recognize Japan's quality is not sufficiently high enough to convince them to buy Japanese.
-1
2020hindsights
I really think that joining the TPP will actually increase Japan's food self sufficiency. Japanese agriculture has been slowing down as people on farms are aging and the younger generations moving to cities. It is also very inefficient.
A wholesale agricultural reform is needed to stop this decline. Joining the TPP will provide the incentive to do this.
-4
Nicky Washida
What herefornow said - with bells on.
-4
pawatan
GW
Agreed. But strong consideration should be given as to how to do this orderly and try to protect people's livelihood as much as possible.
Regarding the rice crop from the early 90's - it can be said that Japan is much more open to foreign things now than 20 years ago. Who can say what is the impact of a similar move today?
0
pawatan
herefornow
It'd be very hard to convince anybody to pay 5x as much for anything regardless of quality. It better be really, really high quality to make up that difference.
I believe Japan's produce is of a very high standard but I am not paying 5x as much for it unless the other products are truly unhealthy or very poor quality. Except occasionally, much like one might buy wagyu over Aussie beef now and then.
0
timeon
A good comparison would be beef. There is cheap aussie beef and there is expensive Japanese beef in any supermarket. Customers have a choice, I don't think the Japanese producers are on the brinks of bankruptcy. What the farmers basically say is "force all Japan to buy only wagyu"
2
Dotakun
Japan will join the TPP, as exports are its bread and butter. They will, however, drag their feet as long as they can on agriculture, as free trade will bring huge changes to the food industry. For better and for worse, JA has controlled the agriculture industry and does not want to change. But they will lose the political battle with the exporters, cuz at the end of the day, they pay the bills around here.
-1
ubikwit
wet-paddy rice farming is a part of the cultural landscape of japan, and "more efficient" agricultural models will not alter that fact. that being said, it remains to be seen what develops in relations to the various interrelated issues at hand. this is somewhat parallel to the fact that big american cars are unappealing to the vast majority of japanese.
food self-sufficiency is recognized by the UN, so it will certainly have legitimate bearing in negotiations.
obviously japan cannot afford to lose competitiveness to countries like korea due to tariffs. on the other hand, it remains to be seen what degree of tariff fairness can be negotiated in terms of existing international treaties, such as GATT.
the TPP will have to be in conformance with GATT.
-4
hatsoff
Sounds a bit like scaremongering to me. Join or go bust. Really?
> It may be the last chance Japan has of keeping itself relevant to the global economic community.
Sounds like the opinion writer is saying Japan is already having a hard time doing so - which ignores the fact that it is globally the 3rd biggest economy in the world.
It's an interesting opinion piece as far as it goes, but it's just an opinion piece - a long version of what we posters are doing here. I'd like to know more about what the TPP will do regarding domestic subsidies. Zero tariffs alone do not create a level playing field. If a country continues to subsidize an industry, it can undercut the competition.
The US subsidized its cotton industry to the tune of US$3.4 billion, which cut prices by 25% and gave the US 40% of the global export markets, and cost West African cotton farmers $190 million. US maize farmers make no profit from growing corn, it's the subsidies they get from the government that gives them the profit.
So I think we need to know more about how the TPP would deal with the issues of domestic subsidies and so-called 'agricultural dumping'.
-1
It"S ME
Got to agree with ubikwit.
Would love to see actual proposals on how to increase farming in Japan, given the current geology and available farmlands/infrastructure. Farming don't exist in a vacuum but it is supported by surrounding business(that rely on the produce), support it, etc.
And I mean realistic proposal not some wish-thinking. Sure increase the amount of farmers those that years of study/education.
Ditto for many other so called "expert proposals" on where to locate nuclear reactors, etc.
-4
Dotakun
Asian manufacturers have already caught up to Japan in exporting electronics and autos. With Japan being in massive debt, any more unfavorable conditions to Japans exporters may very well mean the country going bust.
-4
smithinjapan
A decent article, and it's refreshing to read one that supports Japan joining the TPP instead of just hearing the moaning and groaning and a few farmers and that idiot Kamei. With China now saying it would consider joining if asked it is INDEED a test of Japan's future survival; they'll be left in the dust if they do not join.
1
ADK99
Gajininfo,
All I hear is high self sufficiency good, low self sufficiency bad.
Japan was most backward and most behind the rest of the world when they were the most self sufficient, and suddenly became rich when they opened up to the rest of the world via trade.
It's not really an economic issue, it's a security issue. At the moment, by calories, Japan produces only 39% of its own food. In the event of some kind of emergency - war, blockade, sudden crop failure outside of Japan - the country could potentially find itself in a very difficult situation particularly if the self-sufficiency rate continues to fall (which it will, regardless of the TPP).
There is an argument to be made that in the long-term the TPP may be good for food self-sufficiency by forcing domestic farmers to become more efficient but it's difficult to see how mom-and-pop farmers in Japan can compete with low-cost producers in Asia in the short or even medium term. I suppose the government needs to carefully weigh up the obvious economic benefits of joining against the security risks.
1
ADK99
Ooops, that should have read:
Gaijininfo,
It's not really an economic issue, it's a security issue. At the moment, by calories, Japan produces only 39% of its own food. In the event of some kind of emergency - war, blockade, sudden crop failure outside of Japan - the country could potentially find itself in a very difficult situation particularly if the self-sufficiency rate continues to fall (which it will, regardless of the TPP).
There is an argument to be made that in the long-term the TPP may be good for food self-sufficiency by forcing domestic farmers to become more efficient but it's difficult to see how mom-and-pop farmers in Japan can compete with low-cost producers in Asia in the short or even medium term. I suppose the government needs to carefully weigh up the obvious economic benefits of joining against the security risks.
0
2020hindsights
ubikwit
GATT doesn't exist anymore, it's now called the WTO.
I would too. But we don't need to wait for this to join the TPP. In fact joining the TPP will force this.
ADK99
No real security risks. Transform from Mom & Pop farming into something viable. It's been too long. That doesn't mean family farms can't be part of the future, but if you are 80 and still farming (my uncle is), probably about time to retire.
0
Dotobock
We can only speculate what will happen but I am not very optimistic regarding Japanese agriculture once Japan becomes a TPP member. While Japan does not import rice it does import a lot of soybeans, wheat, grain etc from mainly north America. Because of it, there are hardly any soybeans farmers in Japan any longer. Soybeans fields were just as common as rice paddies up until not too long ago. Most of the soybeans which we daily use, be it your Kikkoman soya sauce, tofu or natto is made in America. They are not Japanese.
Japan's beauty within agriculture is that there are very few large scale farmers and many small scale farmers unlike in U.S.A where you have only a handful of gigantic companies controlling the food market. Family owned corner shops or super markets tend to be more expensive than big chains. So while we will get access to cheaper food, it will be food from big multinational companies and not your local farmer.
With TPP, I am sure some of these American companies such as Monsato will come into Japan or sell their products which actually is banned in many countries around the world with the exception of U.S.A.
-1
Dotobock
I keep mentioning Norway and Switzerland. Two of the wealthiest countries in the world who chose to stay out of EU. Look at Norway and Switzerland today and then take a look at EU. Staying out of EU was the wisest decision those countries made. Free trade contributes to global inequality and injustice. The weakest members of society will be crushed by large big corporations. Noda should represent the people that elected him not the big corporations that think mostly of short term profits.
0
turg123
japan needs to enter into the tpp agreement in order to survive. for many years i have been saying japan needs to rethink its way of doing bussiness globally or it will be left behind. japan has continued to believe in the ideology of protectionism for 60 plus years. it's time for japan to enter the world of bussiness in the 21st century or it will continue to lose its status in the world. i have lived in japan for 10.5 years and think of japan as my home. i hope noda sticks to his guns and joins in the tpp talks and starts to think globally instead of a continuation of the b.s. attitude of self-sufficentcy. there is no such thing mr. noda. help your country progress and retain its status in the world, or move over to let the next loser try. by the way! how many losers has japan had since 2005?
1
Faceless1
Yes, but they were alive. Your post smacks of the narrow mindedness and over-confidence of an economist who can only see numbers, especially the ones that speak of money. Well, you can't eat money. And sometimes, all the money in the world won't buy you any food.
Crap happens you know. So many never thought there would be a WWI or a WWII, but they happened. Japan is an island nation. That right there is reason for a measure of food self sufficiency. If anything major happens, people will not be able to escape and food might not get shipped in. Japan is already over-reliant on China, and China is not a friendly nation. And the whole west of Japan is pretty much all China, and the east, north, and south is pretty much all ocean. Can you imagine if Japan became even more reliant on China, and China got a burr up its butt over territorial issues or other and cut off the food? Or how about just threatened to to get some leverage in negotiations?
If any of Japan's major suppliers of food had some sort of disaster in the future, increased reliance at that time could mean massive problems. Food does grow on trees, but if all the trees are an ocean away that could be a real problem that you cannot just shug your shoulders to and hope for better next year...unlike with economic downturns.
2
Dotobock
It does not even have to be wars, but simply a drought can have terrible consequences. Last year due to a drought in Russia the Russian government banned all exports of wheat. TPP or no TPP, Japan needs to raise it's self sufficiency but it will be even more difficult when Japanese farmers have to compete against foreign farmers when Japan as a country is more expensive than most other countries and when large scale farmers in U.S use illegal immigrants as cheap labor who got no rights.
-3
ben4short
Thanks for the very fine article, Peter.
1
hatsoff
A precedent was set when China witheld rare earth materials: "Sorry, we are reducing exports to japan because we currently have a stronger need domestically."
2
nigelboy
One of the reasons is exporting countries take precedence for their own. If there is a severe drought, countries tend to halt exports which leads to price escalation which the importing countries cannot absorb. It has basically the same effect as an economic sanction. There have been wars because of this.
0
2020hindsights
That's why Japan must join the TPP. Joining the TPP will reform Japanese Agriculture and make it more self sufficient. If it doesn't, it risks being sufficient on external food sources.
1
cechanju
The cheap Aussie beef has a massive tarrif on it... Even with the tarrif it is often cheaper than beef in Aus.
2
アメリ フセイン
I'm a free trade kind of person. This self-sufficiency can't be further from the truth, Japan already imports a lot of food-products and with huge parts of Fukushima and Ibaraki not suitable for farming anymore, it is about time Japan opened up a bit more to imports. I hope Japan joins the TPP.
0
borscht
pawatan,
Yes, you are. Rice grown and sold in Japan is five times more expensive than rice grown in the US (or maybe even Thailand, the world's largest exporter of rice). And it's not the farmers setting the price; it's the government.
As for self-sufficiency, I believe only five or six countries can be completely self-sufficient in food (Australia, Canada, the US, maybe France, Malaysia. I've read Turkey is self-sufficient and East Timor is aiming at agricultural self-sufficiency). The first three have very large industrial-strength agri-businesses and very few (Maybe East Timor) have 80-year-old farmers laboring over a plot of land the size of my office.
While being agriculturally self-sufficient is a good idea (for reasons mentioned above), Japan needs a massive restructuring. This restructuring is not going to be done out of the kindness of the government's heart - unless forced to.
0
VicMOsaka
gaijinfoNov. 14, 2011 said------- Can somebody please explain, in clear, economic, and objective terms, why having a high self sufficiency is a good thing?
Would you consider that the USA has self sufficiency ? Isn't that a good thing ? Every country should have a reasonable amount of self sufficiency as you never know when exports from other countries could be cut off due to disasters, famines etc.
and again gaijinfo said----- Japan was most backward and most behind the rest of the world when they were the most self sufficient, and suddenly became rich when they opened up to the rest of the world via trade.
I can't see the relationship between self sufficiency and becoming rich when they opened up to the rest of the world. These are two different things. If countries had not been self sufficient a hundred years ago, how would they have survived ?
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