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Tuesday, Oct. 6, 2009
Rice — a staple of unstable future, funds?
Rice is an indispensable staple in Japan, but the people who grow it have an average age of 60 and their offspring increasingly are looking to other, more lucrative fields.
They see growing rice as a fast road to the poor house unless heavy government subsidies are provided.
Enter the new government led by the Democratic Party of Japan. It is advocating direct subsidies to farmers to prop up ailing regional economies.
What is the situation surrounding farmers? Can the new government improve their lot?
Following are basic questions and answers about the nation's rice farmers:
What is Japan's annual rice consumption and why has it been declining in recent years?
According to a 2006 survey by the agriculture ministry, Japanese consume 61 kg per person a year, or about one "chawan" bowl of rice a day.
In 1960, annual per capita consumption was 115 kg.
Experts say the Westernization of lifestyles drastically changed the nation's eating habits. Japanese now eat more meat, bread and noodles and less rice.
From 1965 to 2006, daily per capita rice consumption fell from 1,090 to 595 kilocalories, while meat consumption surged from 157 to 394, oil from 159 to 368 and wheat from 292 to 320 kcal.
How many rice farmers are there now?
A 2005 survey by the agriculture ministry tallied 1.40 million rice farming households, down from 1.75 million in 2000. Counted were those who either have 3,000 sq. meters in paddies or earn at least ¥500,000 in yearly sales of their produce. Rice growers account for the bulk of the farming population.
Are they all full-time farmers?
No. Most grow rice on the side and work nonagricultural jobs that yield higher incomes.
The 2005 survey found that among the 1.4 million rice farming households, only 269,167 earn most of their income from the grain, 372,894 have other jobs with higher incomes and the remaining 761,334 only have farmers aged 65 or older who work less than 60 days a year.
According to the agriculture ministry, rice farmers whose income mainly comes from agriculture earned an average of ¥4.7 million in 2007.
Is it true that without government subsidies, most farmers would lose money by growing rice?
Yes. According to Kome Kakaku (Rice Price) Center, it cost ¥16,412 to grow 60 kg of rice in 2007, but it was then sold to distributors for ¥14,196.
The bid price for rice has been falling in recent years due to decreasing demand. In 1994, it was ¥21,364 for 60 kg.
Experts say Japan's rice-growing costs are particularly high because most paddies are owned by numerous part-time farmers, each owning only a small area.
What about the government subsidies?
The government's various subsidies for farmers were consolidated in 2007 into a new system that compensates farmers for four crops whose income from agriculture falls below the prefectural pay average in three of the preceding five years.
The subsidies amount to 90 percent of the income gap. They are covered by a reserve fund financed by both the government and farmers. This applies only to farming households with 4 hectares or more, or 10 or more in Hokkaido.
The government also provides subsidies if farmers grow crops other than rice. For instance, ¥35,000 on average is paid for 1,000 sq. meters of wheat or soy beans.
Part of the reason for the system is to maintain the rice price by reducing the domestic harvest.
According to the agriculture ministry, farmers had stopped growing rice in 41 percent of their rice fields by 2008 as a result of the government policy to reduce yields.
What is the DPJ-led government's position on agriculture and will its policies help farmers struggling with declining rice prices?
The DPJ advocates an individual household income support system that it hopes to start in 2011. The system is designed to compensate for the difference in production cost and the market price.
The government will meanwhile refrain from actively encouraging farmers to reduce their rice output, although they will have the option of applying for subsidies by no longer growing it.
What are the benefits of the DPJ-proposed measures?
Farmers have complained that the government prodding to curb their rice harvest is unfair because those who do not follow this policy also reap the benefits of the high market price that is maintained by the crop reduction.
However, experts say the new system, which would also protect small-scale growers, may not lead to lower production costs.
Japan is often criticized for having a closed rice market. What import regulations are in place?
Japan had a virtually closed market until the General Agreement on Tariffs and Trade, the predecessor of the World Trade Organization, forced it to maintain "minimum access" for imported grain.
The import ban was abolished in 1999 and instead high tariffs were placed on imported rice in a bid to protect domestic farmers.
The market is now technically open, but any imported rice faces a tariff of ¥402 per 1 kg, according to the Customs and Tariff Bureau. This level is based on international agreements at the WTO.
As a result, imported rice accounted only 5.9 percent of the domestic market in 2008.
While abolishing the import ban, Japan is still obliged to import "the minimum access" level of rice under the WTO agreement the nation accepted in 1995.
Last year, the government bought 767,000 tons of foreign rice under the minimum access provision.
Is the tariff the only barrier to foreign rice?
Probably not. In addition to the tariff, Japanese consumers strongly prefer the sweet, sticky homegrown grain. This has helped keep imports down.
Japonica rice is short and round and becomes sticky when steamed, but in Southeast and South Asia, including in Thailand and India, long-grain and dry Indica rice is grown.
While the latter accounts for most of the total global rice yield, Japanese usually only eat these grains when dining on ethnic fare, including Indian curry.
Japonica is also grown in the United States and China.
Does Japan export rice?
Yes, although the amount is very limited.
The agriculture ministry said some ¥640 million worth was exported to other parts of Asia in 2008, including Hong Kong, Taiwan and Singapore, where Japanese food is popular and widely consumed.
Japanese rice has proved popular with rich consumers in those areas, thanks to its quality and sticky texture unique to the Japonica strain.