[Public Lecture Series] Economics #21 Japanese Agriculture (1): The Transformation and Internationalization of Agriculture

Today's theme is "The Transformation and Internationalization of Japanese Agriculture."
Following our previous discussion on small and medium-sized enterprises, today's topic is also incredibly familiar and directly linked to our "daily dining tables" and "Japan's future."
Let's start with the question, "Why study Japanese agriculture now?" and look at the changes from the postwar period to the current wave of globalization.

1. Why study Japanese agriculture now? (Introduction)
Let's get right into it with a question for you all.
[Question 1]
What did you have for breakfast today?
Bread? Rice? Or maybe cereal?
Have you ever thought about where those ingredients came from?
I can almost hear you saying, "Probably toast and milk" or "A tuna mayo rice ball from the convenience store!"
In fact, about 90% of the wheat used for bread is imported from countries like the United States and Canada. The tuna (tuna or bonito) in rice balls, the oil, and even the fertilizer for the seaweed are highly dependent on overseas sources. Behind the "delicious meals" we eat every day lies a global trade network and the significant reality facing Japanese agriculture.
The biggest reason we study Japanese agriculture is to understand how the systems that protect our "food" have changed and what challenges they face in international competition, so that we can think about the future of Japan as sovereign citizens.
If you grasp this, you'll be able to solve social and economic problems on the Common Test, and the meaning of "rising prices" and "food security" you see in the news will become much clearer!

2. Postwar Start-up: The Dismantling of Landlords and the Era of "Rice Emphasis"
To understand modern Japanese agriculture, we must first unravel the history immediately following the end of the war.
Before the war, Japan had a class disparity between "landlords" who owned vast tracts of land and "tenant farmers" who rented that land and paid high rents to farm it.
After the war, under the guidance of the GHQ, land reform was carried out. (We covered this in a previous class.)
The government bought land cheaply from landlords and sold it cheaply to the tenant farmers who were actually tilling it. This led to the birth of a large number of owner-farmers who farmed their own land. The motivation of farmers skyrocketed, thinking, "If I work hard on my own land, it becomes my own income!" The feudal landlord system was completely dismantled by this owner-farmer-centered system.
Furthermore, in the poor postwar era, securing rice was the top priority. Therefore, the government used a system called the Food Control System (Shokkan System) to directly purchase rice, control its price, and distribute it cheaply and equally to the public.
Then, in 1961, at the threshold of the high economic growth period, the Agricultural Basic Law (Old Agricultural Basic Law) was enacted.
[Question 2]
In an era where the salaries of urban company employees working in factories were rising rapidly, what do you think would happen if farmers' incomes stayed the same?
"They'd quit farming and go to the city!" "Only farmers would become poor." You're right!
Therefore, the Agricultural Basic Law aimed to "eliminate the disparity in productivity and living standards between agriculture and other industries (such as manufacturing)." It set major goals not only for increasing rice production but also for modernizing agricultural management and expanding the scale of operations.

3. The "Three Miscalculations" Born from Changing Times
However, the world is not that simple. As high economic growth progressed, three "miscalculations" began to emerge in Japanese agriculture.
① Changes in Dietary Habits and "Acreage Reduction"
As Japan became wealthier, changes in dietary habits (Westernization of diet) progressed. People began eating more bread, meat, and dairy products, and the per capita consumption of rice plummeted.
Even though there was a surplus of rice, the government had to keep buying it at high prices under the old system (Food Control System). The government ran into financial trouble and finally, around 1970, began the acreage reduction (production adjustment) policy to reduce rice production. We entered an era where restrictions were placed on not growing rice (*Note: While the government's allocation of production quantity targets has been abolished, paddy field policies that promote production according to demand continue in a different form).
② Soaring Land Prices and the Decline of Full-time Farmers
Economic growth led to soaring land prices (rising land values) all over Japan. Farmland became too expensive, making it difficult for farmers to buy surrounding land to expand their farms (scale expansion).
As a result, there was a rapid increase in "part-time farmers" who kept their small plots of land while working as company employees during the week and farming only on weekends.
③ Hilly and Mountainous Areas and Abandoned Farmland
Unlike flat areas, farmland located in inconvenient mountainous areas is called hilly and mountainous areas. In these regions, which make up much of Japan's land, aging and depopulation have progressed, and with no successors, abandoned farmland has increased rapidly because no one is left to grow crops.

4. The Arrival of the Black Ships! The Wave of Globalization and Major Institutional Reform
From the late 1980s, Japanese agriculture, which was already facing domestic troubles, was hit by massive external pressure (the Black Ships). This was "trade liberalization."
Super important keywords for the Common Test appear all at once!
The Uruguay Round and "Tariffication"
In international negotiations to discuss trade rules (GATT Uruguay Round), intense pressure was applied by countries like the United States, claiming, "The Japanese agricultural market is closed! Stop import restrictions!"
Following these negotiations, Japan was forced to open its agricultural market throughout the 1990s. For items that had previously been prohibited or restricted from import, it was decided to abolish import quantity restrictions in principle and allow anyone to import them freely as long as they paid tariffs, a process known as tariffication.
[Question 3]
What does "tariffication" mean? If cheap agricultural products come in from abroad, what will happen to Japanese farmers?
Because Japanese farmland is small and labor costs are high, they cannot compete on price with ultra-cheap agricultural products grown on the vast farmlands of the United States or Australia. That is why a system was created to adjust the price difference by imposing taxes (tariffs) at the time of import.
However, only "rice," which is special to the Japanese people, resisted and tried to avoid tariffication at the time. The condition accepted in its place was minimum access (minimum import opportunity). This was a promise that "in exchange for delaying tariffication, a certain amount of rice will be imported every year at a low tariff" (*Japan later transitioned to tariffication for rice in 1999).
The End of the Food Control System and the New Food Law
Thus, the era in which cheap foreign agricultural products flowed in and the government strictly controlled the distribution of rice came to an end. In 1995, the Food Control System was abolished, and the New Food Law (Act on Stabilization of Supply, Demand and Prices of Staple Food) was enacted, which in principle liberalized the distribution of rice.

5. Challenges of a New Era: The "New Basic Law on Food, Agriculture and Rural Areas" and "Food Self-Sufficiency Rate"
Amidst the wave of liberalization, it became necessary to rebuild Japanese agriculture from the ground up.
Therefore, in 1999, the existing laws were completely revised, and the New Basic Law on Food, Agriculture and Rural Areas (official name: Basic Act on Food, Agriculture and Rural Areas) was enacted.
The main pillars of this new law are the improvement of the food self-sufficiency rate and food security.
In recent years, the risk of imports from overseas being delayed due to war, infectious diseases, abnormal weather, and disruptions in international logistics has increased. Ensuring sufficient food for the public even in such unforeseen circumstances is called food security.
And the barometer for this is the food self-sufficiency rate.
Japan's food self-sufficiency rate has fallen to about 38%, which is among the lowest levels of major developed countries (G7). Note that this figure of about 38% is the "calorie-based" food self-sufficiency rate, and if viewed on a production value basis, it becomes a different figure (around 60%). On tests, pay attention to which metric is being discussed.

6. Modern Reform: Diverse Entry and Strengthening Competitiveness
So, how is modern Japanese agriculture fighting for survival?
Let's organize recent policies and keywords!
1. Diversification of Management: Entry of Corporations and NPOs
In the past, there was a strict rule that "only farmers (individuals) could own farmland." However, because the amount of farmland left abandoned due to aging increased, deregulation was promoted.
Currently, under certain conditions, corporations such as corporations and NPOs can rent farmland and enter agricultural management. It has become common for IT companies to use sensors to efficiently grow delicious tomatoes, or for restaurant chains to own their own farms. Furthermore, the government is aiming for highly productive agriculture by consolidating farmland to these motivated "bearers" of agriculture.
2. Changes in Support Over Time
The government has also shifted its direction from a policy of "just protecting" to "creating efficient and strong agriculture." During the Democratic Party of Japan administration, methods of agricultural support have changed with the times and administrations, such as the introduction of the individual income compensation system, which compensates for the difference between the selling price of crops and production costs.
3. Protection of Intellectual Property: Revision of the Plant Variety Protection and Seed Act
In the global era, protecting Japan's excellent "varieties" is also essential.
Cases where brand varieties developed by Japanese farmers over many years, such as Shine Muscat grapes and high-end strawberries, were cultivated without permission due to insufficient rights protection overseas, were viewed as a problem.
To prevent this, the Plant Variety Protection and Seed Act was revised in 2020. The rights of developers (breeders) were strengthened, and for registered varieties, it became strongly protected as intellectual property, such as requiring the breeder's permission for taking them overseas or for self-propagation (using seeds or seedlings from grown crops for the next season).
4. The Era of Mega-FTAs: CPTPP (formerly TPP11), etc.
In terms of trade, even wider free trade agreements are progressing. The CPTPP (so-called TPP11: Comprehensive and Progressive Agreement for Trans-Pacific Partnership), a multilateral agreement in the Asia-Pacific region, and the Japan-EU EPA have come into effect.
As a result, while tariffs on many agricultural products have fallen further and the offensive from overseas has intensified, opportunities for Japan to export high-quality Wagyu beef, strawberries, sake, and more to overseas markets are also expanding.

7. The value of agriculture is not just about 'making food'!
At the end of the lesson, I will introduce a very important concept. It is the multifunctional role of agriculture.
[Question 4]
Do you think rice paddies and fields have roles other than just being 'places to grow rice and vegetables'?
If rice paddies were wiped out in Japan, what kind of problems would occur besides food shortages?
You might be thinking, 'Wait, are there roles other than food?' Actually, there are many!
Rice paddies act as 'natural dams' that temporarily store rainwater during heavy rainfall, preventing floods and landslides. They also create rich landscapes that soothe our hearts, protect the ecosystems of creatures like frogs and dragonflies, and pass on traditional culture.
Thus, fulfilling diverse roles such as national land conservation, environmental protection, and landscape maintenance, in addition to producing agricultural products, is called the multifunctional role of agriculture.
That is why, if we simply abandon Japanese agriculture by saying, 'Why not just buy cheap foreign products?', there is a risk that floods will increase or the beautiful scenery of the satoyama will disappear.

8. Summary of today
Let's organize today's key points!

1. Historical transformation: Land reformbegan with the dismantling of the landlord system, and rice production was strengthened through the Agricultural Basic Law and the Food Control System. However, due to a surplus of rice caused by changes in dietary habits, acreage reduction was started.

2. Impact of globalization: GATT Uruguay Round led to the acceptance of tariffication and minimum access. Rice distribution was liberalized under the New Food Law.

3. Modern Framework: Under the New Basic Act on Food, Agriculture and Rural Areas, improving food security and food self-sufficiency rate (approximately 38% on a calorie basis) has become a key challenge. As free trade progresses through agreements like the CPTPP, intellectual property is being protected through the amendment to the Plant Variety Protection and Seed Act.

4. Challenges for the Future: To address the issue of abandoned farmland in hilly and mountainous areas, we are promoting the entry of deregulation to encourage corporations and NPOs to enter the sector. It is important to value the multifunctional roles of agriculture beyond mere food production.

30-Second Column: Brand Varieties and Intellectual Property Rights
Shine Muscat grapes, which are popular for being sweet and edible with the skin on, are actually the fruit of about 30 years of hard work by a Japanese national research and development agency. However, because rights protection was not sufficiently established overseas at the time, they leaked abroad, leading to a situation where they were grown without permission and sold cheaply. Learning from this, the amendment to the Plant Variety Protection and Seed Act was enacted, marking a full-scale entry into an era where "agriculture is also protected by technology and intellectual property."

Next Lesson Preview
Next time, we will conclude this unit by entering "Food Safety, Agricultural Revitalization, and Aiming for Sustainable Agriculture"! How do we verify the safety of food imported from abroad? How will organic farming and smart agriculture (the latest farming using drones and AI) change the Japanese dining table? Please think about this before the next class.

[Question for Next Time]
If you saw "slightly expensive domestic organic vegetables" and "very cheap foreign vegetables" side-by-side at the supermarket, which would you choose? How would that choice affect the future of Japan? How can we protect a safe and sustainable dining table? Well, that is all for today's class. Thank you for your hard work.