Posts Tagged ‘import tariffs’

How much money do rice farmers need to make from farming?

Friday, March 30th, 2012

Bags of rice for sale in a JA retail outlet

The Trans-Pacific Partnership trade agreement, which Japan endeavors to join, continues to be controversial, though most people in Japan only have knowledge about the broadest arguments. If Japan joins TPP, it’s the end of Japanese agriculture; if it doesn’t, Japan will not have access to one of the biggest markets in the world.

Several recent articles in the Asahi Shimbun at least give some idea of what rice farmers stand to lose or gain from the agreement. Two farmers are profiled, one in Fukui Prefecture, the other in Aomori prefecture. The Fukui farmer works a one-hectare paddy that he inherited from his father about 15 years ago. The paddy yields about 96 hyo (1 hyo = 60 kg) a year and ¥1.47 million in revenues, which breaks down to ¥1.1 in sales and the rest in government subsidies. When the Democratic Party of Japan became the ruling party, it threw out the old Liberal Democratic Party subsidy system, which basically discouraged farmers from growing rice. The DPJ subsidy, called kobetsu shotoku hosho (individual income compensation), pays them to grow by making up for any losses they might incur due to low market prices.

The Fukui farmer’s annual expenses for cultivating his paddy run to about ¥1.77 million, which includes ¥520,000 for outside labor. It’s implied that the paddy owner himself does very little actual farming. On his tax return he also lists in the loss column ¥600,000 in depreciation for his farm equipment. All in all, the farm in 2010 lost ¥300,000. However, he says it doesn’t really bother him. His main job is working for an electrical parts maker, which pays him a salary of ¥5.3 million. His wife also works, earning ¥2.8 million.

Continue reading about the cost of growing rice →

Consumers have last word on fate of rice farming

Tuesday, February 22nd, 2011

Farmers are up in arms about the possibility that the government will participate in the Trans-Pacific Partnership free trade agreement, which would remove import tariffs on products from member countries. In particular, rice farmers say that allowing cheaper foreign rice into Japan would wipe them out, which is probably true for most of them.

The price is rice: 2010 Koshihikari at ¥58 per bowl

Some ambitious high-grade rice producers are determined to meet the challenge not only in Japan, but overseas, as well. The rice collective Beisist Shonan is already selling its expensive brand in Taiwan and Europe. One company in Kobe called Shinmei has a plan to sell 1,200 tons of 2010 rice overseas, which is 870 more tons than they sold of 2009 rice. The company projects that it will export 10,000 tons by 2018. But those companies represent a small portion of rice farmers, the vast majority of whom are part-timers whose methods aren’t very efficient.

At present, the farm sector contributes about ¥10 trillion to Japan’s economy every year, according to the Ministry of Agriculture, Foresty and Fisheries, which estimates that the sector will lose about ¥4.1 trillion if Japan joins TPP. In addition, Japan’s food self-sufficiency rate will drop from 40 percent to 14 percent. About 10 percent of the rice produced in Japan is high-grade (Niigata Koshihikari, organic brands, etc.) and is thus considered invulnerable to foreign imports. Nevertheless, the ministry estimates the price will drop from the current average of ¥280 per kg to ¥177 retail. The remaining 90 percent of Japanese rice, which will compete directly with foreign brands, costs now about ¥247 per kg.

Continue reading about expected effects of the TPP →


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