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TPP or no, aging farm sector needs true reform

JIJI

Structural reform of the rapidly declining farm industry should begin immediately no matter whether Japan joins the Trans-Pacific Partnership free-trade regime, pundits say.

Japan’s farming population stands out even amid its rapidly graying demographics. The average age of its farmers was 65.9 in 2011.

In the JA Group, a collection of agricultural cooperatives that leads campaigns against the TPP, people 70 and older account for 42 percent of its total members.

Last year, the agriculture industry employed 2.51 million people, less than 20 percent of its 1960 peak of 14.54 million.

“Without drastic measures, Japan will become unable to secure necessary amounts of agricultural production,” a farm ministry executive warned.

Japan’s agricultural output fell to ¥8.2 trillion in 2011 after peaking at ¥11.7 trillion in 1984. Rice output slumped to ¥1.8 trillion from ¥3.9 trillion in the same period.

The ministry hopes to promote large-scale farming, especially of such grains as rice and wheat.

Starting in fiscal 2014, the ministry will concentrate the farmland and work it with highly motivated farmers who will be nurtured as large-scale producers.

As of 2010, 400,000 hectares of farmland were left fallow, accounting for nearly 10 percent of Japan’s 4.55 million hectares of farmland.

The ministry aims to stop the increase in abandoned farmland that is expected as more farmers retire. It is considering a system in which prefectural governments will lease unused farmland from retired owners and sublease it to ambitious younger farmers.

To create large farms, Japan needs to promote the conversion of farms into corporations.

On average, Japanese farmers work 2 hectares of land, against the average of slightly over 20 hectares in Hokkaido, a key food production base.

The appropriate size for management by individuals would be only 10 to 20 hectares at most, a different farm bureaucrat said.

Another key issue associated with agricultural reform is how to revamp the income compensation program for farmers that was introduced by the previous government led by the Democratic Party of Japan.

Under the program, the government distributes cash to help rice and wheat growers cover production costs in excess of sales.

The current Liberal Democratic Party-led government is considering providing the allowances to vegetable and fruit producers as well.

Meanwhile, support for farmers who have sources of income other than agriculture will be reconsidered. The government is considering limiting the scope of the compensation program to full-time farmers holding a certain scale of farmland.

The government may be criticized for abandoning small farms if it selects eligible producers based on their land holdings.

As a measure to reinforce the farm industry as well as fisheries, Prime Minister Shinzo Abe aims to double Japan’s annual food exports to ¥1 trillion.

But many countries still have import restrictions on Japanese farm and marine products in place because of the radiation concerns generated by the triple meltdown crisis at Tokyo Electric Power Co.’s Fukushima No. 1 nuclear power station.