4:22 pm JST

Oct 6, 2015

Abenomics

TPP Deal Expected to Shake Up Japans

Agriculture Sector

Farmers harvest rice in Japans Chiba prefecture last month.

Bloomberg News
Japans farm sector is likely in for a shakeup following Mondays Trans-Pacific Partnership trade
agreement.
Prime Minister Shinzo Abe has touted a comprehensive restructuring of Japans agriculture sector
as a key element of his economic program, and the heightened competition resulting from TPP as
necessary to hitting that goal.
The trade agreement will provide easier access to Japan for products such as California rice,
Canadian pork, Australian beef and New Zealand butter. In the face of greater competition, many
small Japanese farmers could be taken over by large enterprise operators.
Most farmers recognize the need for change, but they are still likely to rue the stiffer competition.
Officials from Japan Agricultural Co-operatives, the nations largest farm group, werent
immediately available for comment.
In August, Mr. Abe took a first step in restructuring the agriculture sector when parliament passed
legislation that restricts political activity by the co-operatives, spurs enterprise farming and
promotes competition among local co-operatives.
Mr. Abe on Tuesday defended the concessions made by his government during TPP negotiations,
saying it fought hard to avoid completely eliminating tariffs, as called for by other countries.

Still, he said he is aware that many farmers are worried about a possible influx of cheap imports.
The government will form a task force, to be led by economy minister Akira Amari, to create a
comprehensive package of measures to help affected farmers, he said.
Japan will maintain a whopping 778% tariff on imported rice, but has agreed to increase the quota
for rice imports from the U.S. and Australia, by 78,000 tons to a total of 850,000 tons a year,
which is about 10% of annual domestic consumption. The changes could further depress domestic
rice prices, which hit their lowest level in decades last year as consumption continues to decline.
The tariff on imported beef will be lowered to 9% from 38.5% over 15 years. Japan imports 60%
of its beef, mainly from Australia and the U.S. The tariff on pork will also be cut. Japan imports
pork from the U.S., Canada and Mexico, while producing about half of what it consumes.
The import quota for butter and skim milk powder will also be raised, following recent shortages
of butter, as more Japanese enjoy eating breads, cakes and pastries.
Mr. Abe emphasized that TPP also presents opportunities for Japanese farmers, noting that other
countries will also open their markets to Japanese products, such as beef, rice and pears.
Lets not see the TPP as a threat, he said during a news conference. We want to give as much
support as possible to those who see an opportunity in the TPP and choose to compete in the
global market.

http://blogs.wsj.com/japanrealtime/2015/10/06/tpp-deal-expected-to-shake-upjapans-agriculture-sector/