Commentary / Japan | SENTAKU MAGAZINE

Stockbreeding industry interests and the Kake Gakuen case

Behind the veterinary school project is a move to overhaul interests involved in the nation's livestock industry

The core of the controversy over the plan by Kake Gakuen to open a new veterinary medical department of its university in Imabari, Ehime Prefecture, goes much deeper than the feud between the Prime Minister’s Office and the education ministry over a series of documents pointing to Prime Minister Shinzo Abe’s “intent” for pushing the project. Behind the project is a move to overhaul interests involved in the nation’s stockbreeding industry, a trend that could eventually affect government’s forestry, fisheries and agriculture policies, including those on rice.

The issue over Kake Gakuen, an Okayama-based school operator led by a longtime friend of Prime Minister Shinzo Abe, first made headlines in mid-March. But the beginning of the story dates back to about a year ago — when a Lower House seat in the Fukuoka No. 6 electoral district was vacated by the death of Kunio Hatoyama of the Liberal Democratic Party. In the by-election that followed, Chief Cabinet Secretary Yoshihide Suga supported Hatoyama’s son Jiro, who in turn was challenged by Ken Kurauchi, son of Isao Kurauchi, head of the LDP’s Fukuoka Prefecture Chapter. Kurauchi’s campaign was backed by LDP bigwigs like Taro Aso, deputy prime minister and finance minister, and Makoto Koga, former LDP secretary general. The party ended up seeing two candidates from its ranks compete for the seat.

An important point in the by-election was that the elder Kurauchi, who served in the Fukuoka prefectural assembly for eight terms, was chairman of the Japan Veterinary Medical Association, while Aso headed an LDP caucus representing the interests of veterinarians. Despite his close ties with the incumbent deputy prime minister, the younger Kurauchi was roundly defeated by Hatoyama in the Oct. 23 by-election — a result that exposed the father’s waning political influence. Subsequently, the government’s process for authorizing Kake Gakuen’s plan to build a new veterinary medical department made rapid progress.

These developments pushed Aso into a delicate position. He wanted to maintain close ties with Abe, but feared that inaction on his part would weaken his own clout within the ruling party. In February, Aso started making moves to reorganize intra-party factions within the LDP, and formed a new group in July whose membership is now the second-largest in the party.

As if to synchronize with Aso’s moves, Kurauchi went on a counteroffensive. In his address to the newyear gathering of the veterinary medical association, he denounced the Abe administration’s moves to allow the opening of a new veterinary medical department — which had not been approved for more than 50 years on grounds that the supply of veterinarians was sufficient to meet demand — as part of its deregulatory measures. Aso concurred when he told a news conference in late May that creating new veterinary medicine departments at universities would lead to a deterioration in the quality of veterinarians.

Abe meanwhile reiterated that he was determined to tear down “bedrock” regulatory barriers, indicating he would not be swayed by vested interests linked to the farm ministry. In a speech in Kobe on June 24, he said the opportunities for opening new veterinary medical departments should not limited to Imabari but should be quickly extended nationwide — as if to say he’s ready to face up to the challenge by Aso and the veterinary medical interests behind him.

The Agriculture, Forestry and Fisheries Ministry has long established a solid triangular relationship with stockbreeders and lawmakers backed by the industry. Stockbreeding industry groups support the lawmakers through political donations, while preparing post-retirement jobs for bureaucrats. The farm ministry bureaucracy uses its power to issue permits and approvals, set import tariffs, implement public works projects and distribute government subsidies. The lawmakers in turn cooperated in enacting legislation that the bureaucracy wants. The triangle has secured massive — though declining — resources of their own such as revenue from tariffs on beef and pork imports, as well as subsidies from the Japan Racing Association. They have rejected interventions by lawmakers linked to other interests or the Finance Ministry.

In the past, the LDP had a powerful group of lawmakers with stakes in the stockbreeding industry. They included Sadanori Yamanaka, who oversaw the tax system in general, Ichiro Nakagawa and his son Shoichi, who exerted a major influence on the government’s agricultural policies, and Takami Eto and Naoto Kitamura, both of whom were licensed veterinarians.

Veterinarians are also important members of that triangle, because the smooth implementation of policies related to stockbreeding cannot be hoped for without their cooperation in such matters as introducing new technologies, preventing and managing livestock epidemics, developing and certifying new drugs for animals, and calculating the economic impact of livestock deaths — in all of which various kinds of government subsidies are involved.

The fact that the number of universities that produce veterinarians has been restricted to 16, with their total enrollment capacity at 930, for the past 50 or so years, is proof of the solid and exclusive relations among all these parties. The plan by Kake Gakuen to create a new veterinary medical department — with an enrollment capacity of 160 — no doubt comes as a shock for the interested parties. It may be likened to a rice farmer who suddenly boosts his output when all others cut their production under a government policy to manage a rice glut.

This “stockbreeding triangle” has been criticized as a breeding ground of corruption. Nevertheless, the three parties involved— the stockbreeding industry, the farm bureaucracy and industry-backed lawmakers — always shared information, respected precedents and made decisions through mutual consultations (even though it was called collusion). The Abe administration, under its regulatory reform drive, claims that it is seeking to destroy this interest-bound structure. But what it is in fact trying to achieve is a reorganization of the vested interests monopolized by the triangle.

And in the fight for stockbreeding-related interests, Aso and his followers seem to be facing an uphill battle. The once solid power base of the stockbreeders-backed lawmakers is rapidly collapsing with a decline in the number of stockbreeders, who no longer function as a powerful vote-gathering machine. The resources once reserved for them are fizzling out as revenue from import tariffs fall with the elimination or sharp cuts to Japan’s tariffs on livestock products.

The decline in the number of farmers through consolidation into large-scale operations progressed most dramatically in the poultry business. According to the farm ministry, the number of people engaged in poultry farming for eggs across the country has fallen from 3.8 million in 1960 to a mere 2,530 in 2016 — or less than 0.1 percent of what it was — while the average number of chickens being raised per farmer shot up from about 20 to 55,151 — a more than 2,500-fold increase. Some mega-breeders raise more than 1 million chickens. The political clout of chicken farmers has fallen in proportion to the decline in their numbers.

Similar trends are also seen among pig farmers, beef farmers and dairy farmers, in that order. The number of pig farmers has fallen from its peak of 1.025 million in 1962 to 4,830 today, while that of beef farmers has plummeted from 2.03 million in 1960 to 51,900. Even dairy farmers, who have been protected by the industry’s exclusionary distribution system, have seen their numbers drop from 410,400 in 1960 to 17,000. If the Abe administration succeeds in scrapping that distribution system, consolidation of dairy farming is certain to accelerate.

The future of the rice-farming industry is touted to be similar. Masaaki Okuhara, administrative vice farm minister, is working closely with Shinjiro Koizumi, head of the LDP agriculture caucus, to promote the consolidation of rice farming in the hands of large-scale farmers. The basic idea behind the laws enacted in the last Diet session to enhance the competitiveness of the farming industry is to press small and less competitive farmers to abandon the business and nurture a smaller number of more efficient, large-scale farmers.

Whether or not the idea is appropriate, one thing is certain — that the number of farmers will significantly decline as a result of this policy, and that eventually the “tribes” of lawmakers backed by not just the stockbreeding sector but also the whole farm industry will crumble. What is highlighted in the Kake Gakuen case is only a prelude to much more drastic changes to come.

This is an abridged translation of an article from the July issue of Sentaku, a monthly magazine covering political, social and economic scenes. More English articles can be read at www.sentaku-en.com

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