JAPAN: ESTIMATES OF SUPPORT TO AGRICULTURE

Contact person: Kubota Osamu

Email: osamu.kubota@oecd.org

Tel : (33-1) 45 24 95 35 Fax :(33-1) 45 24 18 90

DEFINITIONS AND SOURCES

Country Total Support Estimate (TSE) and derived indicators in Table 1 cover all agricultural production, i.e. all agricultural commodities produced in the country. Definitions of basic data sets refer to the specific name of the programmes with specific sources indicated in square brackets. For the Producer Support Estimates (PSE) and Consumer Support Estimates (CSE), the description of policy measures indicates the commodities covered by the measures, as well as the method of allocation of the corresponding transfers among commodities. "MPS commodities", which vary across countries, are those for which market price support is explicitly calculated in Table 2.

Market Price Support (MPS) and Consumer Support Estimates (CSE) by commodity in Table 2 are calculated for the following commodities: wheat, barley, rice, soybeans, sugar, milk, beef and veal, pig meat, poultry meat, eggs, apples cabbage, cucumbers, grapes, mandarins, pears, spinach, strawberries and welsh onions. Definitions are provided only for basic data sets from which all the other data sets in this table are derived, following the formula indicated in each commodity table. Specific sources are indicated in square brackets.

Producer Support Estimates (PSE) by commodity in Table 3 are calculated only for commodities produced in the country within a common set of commodities (wheat, maize, barley, oats, rice, sorghum, soybeans, sunflower, rapeseed, sugar, milk, beef and veal, pigmeat, poultry meat, sheep meat, wool, and eggs), provided that the value of production of that commodity exceeds 1 per cent of the total value of production in the country concerned. All data sets in the calculation of PSE by commodity come from Tables 1 and 2 where definitions are included.

Definitions of the indicators, criteria of classification of programmes included, and methods of calculation can be seen in OECD, Methodology for the measurement of support and use in policy evaluation [http://www.oecd.org/agr/policy].

The fiscal year (FY) in Japan is from 1 April to 31 March.

Table 1. JAPAN: Total Support Estimate

Definitions:

I. Total value of production (at farm gate): Total agricultural production valued at farm gate prices, i.e. value (at farm gate) of all agricultural commodities produced in the country [1].

1. Of which share of MPS commodities (%): Share of commodities for which MPS is explicitly calculated (in Table 2) in the total value of agricultural production.

II. Total value of consumption (at farm gate): Consumption of all commodities domestically produced valued at farm gate prices, and estimated by increasing the value of consumption (at farm gate) of the MPS commodities according to their share in the total value of agricultural production [(II.1) / (I.1) x100].

1. Of which MPS commodities: Sum of the value of consumption (at farm gate prices) of the MPS commodities as indicated in Table 2.

III.1 Producer Support Estimate (PSE): Associated with total agricultural production, i.e. for all commodities domestically produced [Sum of A to H; when negative, the amounts represent an implicit or explicit tax on producers].

A. Market Price Support: On quantities domestically produced (excluding for on-farm feed use -- excess feed cost) of all agricultural commodities, estimated by increasing the MPS for the MPS commodities according to their share in the total value of agricultural production [(A.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the MPS (net of price levies and excess feed cost) for the MPS commodities as calculated in Table 2.

B. Payments based on output

1. Based on unlimited output

Production promotion of sugar: payment per tonne of beet (cane) multiplied by quantity of sugar beet (cane) production.

Production promotion of cheese: payment per tonne of milk used to product cheese.

Deficiency payment for beef calf producers: payment per tonne calculated as the difference between the guaranteed standard price and average market price, multiplied by the quantity of beef calf production.

PSFE payment: payment per tonne under the Price Stabilisation Fund on Eggs to egg producers under contract, calculated as 90 per cent of the difference between standard price and average market price, multiplied by the quantity of egg production.

FVSSF payments: payment per tonne under the Fruits and Vegetables Supply Stabilisation Fund to producers under contract, calculated as 90 per cent of the difference between standard price and average market price, multiplied by the quantity of production of specific fruit and vegetables.

Production promotion of barley in feed use: payment per tonne of barley for feed use, multiplied by the quantity of production.

Output payment for soybean: payment per tonne of soybean multiplied by the quantity of production.

2. Based on limited output

[Voluntarily marketed rice promotion: payment per tonne in quantities shipped as voluntarily marketed rice. Abolished in 1997 crop.]

JRIS programme: budgetary expenditure under the Rice Farming Income Stabilisation Program (JRIS), introduced in 1998, to compensate voluntary marketed rice producers for part of the loss of income caused by a fall in the market price. Eligible producers have to fulfil the required diversion target of the year, enter into a contract with agricultural co-operatives and deposit certain amount of money as "limited withdrawal deposit" in the co-operatives.

[Deficiency payment for soybeans: payment per tonne calculated as the difference between the standard producer price and average market price, multiplied by the quantity of soybeans production within the supply control limit decided by the government. Abolished in 2000 crop.]

Compensatory payment for manufacturing milk: budgetary expenditure under the new "Temporary Law for Compensation Prices for Producers of Milk for Manufacturing Purposes", introduced in 2001, to compensate dairy farmers for part of the loss of income caused by a fall in the market place for manufacturing milk.

[Deficiency payment for manufactured milk: payment per tonne calculated as the difference between the guaranteed producer price and average market price, multiplied by the quantity of manufactured milk within quota. Abolished in 2001 FY.]

C. Payments based on area planted/animal numbers

1. Based on unlimited area or animal numbers

2. Based on limited area or animal numbers

D. Payments based on historical entitlements

1. Based on historical plantings/animal numbers or production

2. Based on historical support programmes

E. Payments based on input use

1. Based on use of variable inputs

Interest concessions: budgetary expenditure on the Government and quasi-government loan programmes to provide low interest loans for purchasing variable inputs, estimated as half of total outstanding loans [the other half being for purchasing fixed inputs and included under E.3. Based on use of fixed inputs]. Allocated to individual commodities according to their share in the total value of production.

Insurance: budgetary expenditure on the part of the premium that farmers have to pay for agricultural insurance. The budget data by commodity is available.

2. Based on use of on-farm services

Extension services: budgetary expenditure on advisory services, allocated to individual commodities according to their share in the total value of production.

Pest and disease control: budgetary expenditure on the animal health control scheme allocated to individual commodities according to their share in the total value of production.

3. Based on use of fixed inputs

Infrastructure: budgetary expenditure on the on-farm infrastructure improvement scheme, including irrigation and drainage facilities and readjustment of agricultural land. Allocated firstly to crop and livestock products according to their share in the infrastructure budget and, secondly, to individual commodities according to their share in the total value of production.

Disaster restoration: budgetary expenditure on the on-farm basis disaster restoration programme allocated to individual commodities according to their share in the total value of production, except for cattle, which is allocated to beef and milk according to their share in the number of cattle.

Interest concessions: budgetary expenditure on the Government and quasi-government loan programmes to provide low interest loans for purchasing fixed inputs, estimated as half of total outstanding loans [the other half being for purchasing variables inputs and included under E.1. Based on use of fixed inputs]. Allocated to individual commodities according to their share in the total value of production.

Payments to farmers in hilly and mountainous areas: payments per hectare to farmers who farm agricultural lands in certain naturally, economically and socially disadvantaged regions, designated by regional assistance laws and meeting certain objective criteria regarding the slope, shape or size. Although the prescribed land is intended for farming, producers are not obliged to produce any commodities. Allocated to individual crops according to the value of production.

F. Payments based on input constraints

1. Based on constraints on variable inputs

2. Based on constraints on fixed inputs

Diversion programs: payment made under various diversion programmes, replaced by the Production Adjustment Promotion Programme (PAPP) in 1998. The PAPP payment is applied to the area of paddy field where other uses than rice production was implemented. The producers must use the paddy field complying with environmental programme fixed by the government. Allocated according to the proportion of diverted area from rice to each crop, half of the payment being counted for rice.

3. Based on constraints on a set of inputs

G. Payments based on overall farming income

1. Based on farm income level

2. Based on established minimum income

H. Miscellaneous payments

1. National payments

2. Sub-national payments: no data available

III.2 Percentage PSE [(III.1) / ((I) + (Sum of B to H)) x 100]

III.3 Producer NPC: For all agricultural commodities the Producer NPC is estimated as a weighted average of the producer NPC calculated for the individual MPS commodities and shown in Table 2. For each commodity Producer NPC = [domestic price received by producers (at the farm gate) + unit payments based on output] / border price (also at the farm gate).

III.4 Producer NAC [1 / (100 - (III.2)) x 100]

IV. General Services Support Estimate (GSSE): total budgetary expenditure to support general services provided to agriculture [ Sum of I to O].

I. Research and development

Budgetary expenditure on research institutions.

J. Agricultural schools

Budgetary expenditure on agricultural schools.

K. Inspection services

Budgetary expenditure on inspection services.

L. Infrastructure

Infrastructure: budgetary expenditure under the off-farm infrastructure improvement scheme, including for irrigation and drainage facilities, natural disasters prevention measures, road construction, sewerage construction, public health and recreational facilities construction.

Disaster restoration: budgetary expenditure for the restorations of off-farm equipment under the disaster restoration programme.

Early retirement programme: budgetary expenditure for early retirement of farmers under the pension scheme.

M. Marketing and promotion

Budgetary expenditure on marketing and promotion of domestic production.

N. Public stockholding

Budgetary expenditure on public stockholding of rice, wheat, soybeans and feed grains.

O. Miscellaneous

1. National expenditure

2. Sub-national expenditure: not available.

V.1 Consumer Support Estimate (CSE): Associated with agricultural production, i.e. for the quantities of commodities domestically produced, excluding the quantities used on-farm as feed -- excess feed cost. [Sum of P to S; when negative, the amounts represent an implicit tax on consumers].

P. Transfers to producers from consumers: Associated with market price support on all domestically produced commodities, estimated by increasing the transfers calculated for the MPS commodities according to their share in the total value of production [(P.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the values of transfers from consumers to producers associated with market price support for the MPS commodities as calculated in Table 2.

Q. Other transfers from consumers: Transfers to the budget associated with market price support on the quantities imported of domestically produced commodities, estimated by increasing the transfers calculated for the MPS commodities according to their share in the total value of production [(Q.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the transfers to the budget associated with market price support on the quantities imported of the MPS commodities as calculated in Table 2.

R. Transfers to consumers from taxpayers

School lunch scheme: budgetary expenditure under the programme for the promotion of rice and milk consumption in schools. The budget data by commodity is available.

S. Excess Feed Cost: associated with market price support on quantities domestically produced and used on-farm as feed as calculated in Table 2.

V.2 Percentage CSE [(V.1) / ((II) - (R)) x 100]

V.3 Consumer NPC: For all agricultural commodities the Consumer NPC is estimated as a weighted average of the consumer NPC calculated for the individual MPS commodities and shown in Table 2. For each commodity Consumer NPC = domestic price paid by consumers (at the farm gate)/ border price (also at the farm gate).

V.4 Consumer NAC [(1 / (100 -(V.2)) x 100]

VI. Total Support Estimate [ (III.1) + (IV) + (R)] and [ (T) + (U) - (V)]

T. Transfers from consumers [ (P)+(Q)]

U. Transfers from taxpayers [ (III.1)-(P)+(IV)+(R)]

V. Budget revenues [ (Q)]

Sources:

The Ministry of Agriculture, Forestry and Fisheries provided information. For budget expenditure, following documents are used:

-- MAFF, "Norinsuisan Yosan no Setsumei" (Outline of MAFF Budget), various years (Jan.).

-- Norin tokei kyokai, "Nogyo hakusho fuzoku toukei hyo"(Statistics book attached to Annual report on Agriculture), various years (May).

Table 3. Producer Support Estimate by commodity

Definitions and Sources: see Tables 1 and 2 above.