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KOIZUMI
ON THE HUSTINGS
Politics in the
paddies
By Richard Hanson
TOKYO - Don't blame the farmers. They didn't
transform Japan into the "First" World's second-largest
industrial superpower - wagging a Third World
agricultural tail.
But by the time Prime
Minister Junichiro Koizumi, a city-bred politician,
dissolves the current special Diet (parliament) - to
call a crucial general election, tipped for November 9 -
he will have left enough gifts and goodies for the
agricultural community to make sure the ruling Liberal
Democratic Party (LDP) will get a fair share of the farm
vote.
Japan's vast, highly organized
agricultural establishment will have once again exerted
far more influence than justified by the diminished role
of farming and farmers in Japan's economic and social
fiber.
Heck, Japan's farmers can only produce
about 40 percent of what the nation's 126 million people
eat and drink. This ratio that has fallen as farm trade
has opened up in the past decade. In 1960, Japan
supplied 79 percent of its food. Now it's even below the
government's own target of 50 percent. The rest, of
course, is imported - much of it under strict quotas or
high tariffs. Rice, the national grain, is still
protected mainly by paying subsidized farmers to grow
it.
Thus Koizumi's government and the LDP have
spent the past few months just making sure the farm
community is happy, or at least not offended. The
government puts farm protection - also called food
self-sufficiency - near the top of its strategic
priorities.
Only relations with the United
States receive anything near as much attention in
government. And even there, there are strategic
tradeoffs that at times favor local farmers over US
sensibilities on the issue of farm trade. That was
evident in August during a crucial round of World Trade
Organization (WTO) negotiations in Cancun, Mexico, that
focused on agriculture.
Those talks collapsed as
conflict over protectionist and freer farm trade flared
between the developed and developing nations of the
world. So Japan got off easy. Japan's agenda was
squarely on the side of protecting its own narrow farm
interests, extolling the virtues of rice paddies on the
environment and a nation's cultural heritage. Issues
such as keeping tariffs high weren't resolved.
"Why does Japan, one of the biggest
beneficiaries of a free-trade world, go into the Cancun
talks with a diehard protectionist position on
agriculture?" asks Urban Lehner, editor-in-chief of DTN
Ag Services, a leading US farm-news service. After the
failure in Mexico, Jean-Pierre Lehmann, a founding
director of the Evian Group who attended, put it more
bluntly: "Japan should reflect on whether it is in the
interests of its own people ... to continue protecting a
handful of pampered old farmers and their bloated
lobbies."
The sentiments are understandable. The
reality is that LDP politics in Japan just don't allow
much room for high-minded sentiments such as fair trade
as far as agriculture goes. Farmers are too important to
the party. This was evident at the Cancun meeting by the
sheer size of Japan's delegation - a total of 235,
compared with 132 from the United States, 59 from India
and 53 from China.
Among Japan's delegation
there were 11 from the Ministry of Foreign Affairs, 39
from the Ministry of Economy, Trade and Industry, and 72
from the Ministry of Agriculture, Forestry and Fisheries
(MAFF). The latter were not in Mexico to look after such
trade issues as poverty, the environment, human rights
and migration.
MAFF's agenda, blunt as it may
seem, is to protect its farmers. It's pure politics.
Okay, part of it is that rice paddies are good
for the environment and so on, even if it's an
unrealistic stance for the world's second-largest
economy. Japan is still losing farmers. Should they be
supported at the expense of an urban majority that feels
it gets short shrift from the government and, as
consumers, are unhappy with expensive food prices?
Well, yes. Especially at election time.
Reality on the farm is that all Japan's primary
industries - agricultural, forestry fisheries - have
declined dramatically in the past 40 years - from 32.6
percent of the working population in 1960 to 4.4 percent
2000. In 2001, agricultural production was down to 1.3
percent of the gross domestic product (GDP) from 9.0
percent in 1960.
What has grown, in almost
inverse proportion to demographics, is the size and
clout of Japan's highly organized agricultural - for
lack of a better word - establishment. This requires the
LDP actually to demonstrate that it is supporting
farmers. This means not letting in more farm imports.
As one senior agriculture industry source put it
bluntly: "Allowing more liberalized imports means losing
farm votes. The LDP has to show farmers that they are
protecting farmers."
Simple as that, which is
why even a politician like Koizumi, whose constituency
is in an urban district, dares not anger the farm vote.
What the politicians fear is not individual
farmers, but the massive organization that purports to
represent them - an octopus-like thing that goes under
the umbrella name of JA ZENCHU - "An independent
non-business organization".
As the LDP and the
MAFF know, this is no ordinary non-business
organization. JA stands for Japan Agriculture, an
"international" name (only the initials are used) picked
in a public relations campaign in 1992 as pressure for
farm liberalization (and less corruption) was riding
high. (The full name in English is: The Central Union of
Agricultural Cooperatives.)
You don't even have
to have anything to do with farming to join a local JA
"multi-purpose agricultural cooperative" in your home
town or in heart of your urbanized city. The power of
the JA ZECHU is that about 40 percent of the members are
now "associate members", who need not be farmers.
Throughout the land, JA locals offer such staples as
"farm guidance" to make for better farmers, "better
living" guidance for wives of farm families and such
services.
But JA is also right smack in the
national mainstream of business and finance. The credit
business of the JA Group is called the JA Bank, with
14,000 branches (Japan's largest "community-based"
financial institution) and more than 100 trillion yen
(US$905 billion) in gross assets. Top that off with a
large "mutual" insurance business. (Agricultural
financial institutions got into serious trouble in the
mid-1990s in a scandal involving huge bad loans to
mortgage companies, called Jusen.)
What gives JA
additional direct clout with farmers is buying and
selling agricultural products, and also supplying farm
families with all the tools of the trade - anything from
fertilizers to heavy farm machinery. Yet another
"national federation" of cooperative associations runs
supermarkets and gas stations.
The political
links between the LDP and farmers didn't become a major
issue until the 1960s, when the party had alienated
large parts of the increasingly urbanized part of the
electorate by ramming through unpopular bills in the
Diet (parliament) as the US-Japan Mutual Security
Treaty. A vast safety net for farmers - including
protection from competition from imports - became
full-blown in order to woo the farm vote away from the
threat of a then quite viable Japan Socialist Party
(JSP).
In the event, the Socialists proved to be
their own worst enemies at the polls. But the electorate
was stuck with what amounts to socialized agriculture,
the hallmark of which is protection from imports and the
high cost of food. In another critical period, the early
1970s, the LDP kept its grip on power by passing
sweeping social benefits for virtually everyone - giving
Japan, among other things, decent national medical care.
For the agricultural lobbies, the government
(hence the LDP) began to distance itself from farm
issues in the 1980s when Japan, which was then flush
with a strong economy and booming stock markets. The
first milestone came in 1986 as what is called the
Uruguay Round of trade liberalization under the General
Agreement on Tariffs and Trade (GATT) got under way.
Those drawn-out negotiations began under the LDP
and came to a close in 1993 (with the LDP out of power)
under the coalition government of Morihiro Hosokawa, who
felt obliged to accept what were becoming normal levels
of open trade. Japan accepted the agreements, which
opened the market for some imported rice and agreed to
apply "tariffs" to such imports.
This did not
mean abandoning protection for rice farmers: the tariff
is now set at a stiff 490 percent, which makes Japan
look bad. The LDP regained control the government in
1996 (actually it had ruled again in a coalition deal
that included a socialist prime minister, the first
since the Occupation, from 1994).
Koizumi looks
to be the most stable prime minister since the
mid-1980s, when Yasuhiro Nakasone was in office. He is
not taking any chances with the farm vote. One part-time
farmer, Haruo Ogura, 52, summed up the reason succinctly
when asked about the role of the farming and actual
farmers who vote: "You can't revive it, and you can't
kill it." As a voting bloc they are still significant.
In 2002, there were still 3.03 million farm
households in Japan - half the count in 1960. But this
translates into 3.75 million people of voting age, a
figure that keeps slipping (down 1.8 percent last year).
A little more than two-thirds the farm households them
were engaged in "commercial" farming (more than 12
hectares of land under cultivation). More important is
the breakdown of the "aging" population: 55.4 percent of
these individuals are now 65 years old or older (Japan
has the highest life expectancy in the world - 78.07
years for men; 84.93 for women).
Older people,
including farmers, tend to vote. Koizumi is paying
attention.
One small example: his government has
gone out of its way to give beef farmers some help after
they were dealt a big blow in September 2001 with the
revelation of Japan's first cases of mad-cow disease, or
bovine spongiform encephalopathy. (An MAFF panel this
week will conclude that the outbreak of mad-cow disease
in Japan was probably caused by cattle feed made from
imported British cows or feed made in Italy in the
1980s, according reports in the Japanese press.)
The most blatant example involves an emergency
tariff imposed on chilled beef imports on August 1, when
Japanese Customs enforced a law that temporarily raised
the tariff to 50 percent from 38.5 percent. Under a law
that was passed by the Diet in March, Japan found beef
farmers had been damaged by a surge beef imports.
This was a really ticklish interpretation of WTO
rules. The tariff runs out next March 31. This sparked a
strong protest from Japanese consumers (and foreign beef
exporters and importers). It looked like a political
gift to the farm community just as Koizumi was facing a
re-election as president of the LDP in September.
The tariff was drafted the Ministry of Finance
(MOF) Customs and Tariff Bureau, with the help of the
Ministry of Agriculture, Forestry and Fisheries. Beef
exporters (and importers) protested from the start, but
they failed to stop it. It passed in early March.
It is speculated that the administration of US
President George W Bush did not protest strongly in part
because Koizumi supported its invasion of Iraq a couple
weeks later. The point is that all of the additional
tariff revenue collected on the beef imports is
designated to be given only to Japanese beef producers.
That may be an incentive for a farmer to vote
LDP. But it doesn't mean Koizumi is not also looking out
for the consumer vote when it comes to agriculture,
though it has gotten fewer headlines.
Most
significant is an about-face in the regarding the
Ministry of Agriculture itself. This culminated earlier
in the summer when the MAFF implemented one of the most
far-reaching reorganizations in its recent history. This
too was inspired by the incompetence (and arrogance)
displayed in the mad-cow-disease scandal. MAFF's
sloppiness angered farmers as well as consumers.
One major change came when Koizumi ordered an
about-face on the question of food safety versus
protecting farmers. He ordered a change in attitude to
"develop a consumer-oriented food-safety
administration". This came into effect on July 1. The
government created a new Food Safety Council,
established in the Cabinet Office, which is "authorized
to evaluate a wide range of food-safety matters and to
issue advisories to MAFF and the Ministry of Health,
Labor and Welfare".
That is good for farmers.
This amounted to an internal purge breaking up the
powers of institutions that wielded authority over vast
fiefdoms. In this purge, the government abolished what
was the notorious, independent Food Agency, which for
decades, through a network of nationwide regional
offices, represented the real and symbolic bastion of
Japan's protected rice production - even as Japan's
consumption of rice dwindled.
MAFF isn't giving
up the rice cause - referred to as "staple food
affairs". Instead, rice is being moved into the General
Food Policy Bureau, where "rice policy reform" will be
managed under a less powerful Food Department. MAFF
created a new bureau called the Food Safety and Consumer
Affairs Bureau. In the pecking order, it is No 2 among
bureaus, above the once all-powerful Agricultural
Production Bureau.
These measures probably won't
swing votes among ordinary consumers. But they probably
won't lose many farm votes for Koizumi and the LDP,
either.
(Copyright 2003 Asia Times Online Co,
Ltd. All rights reserved. Please contact content@atimes.com for
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