Agricultural policies and support

Japan - Agricultural Policy Monitoring and Evaluation 2011

 

Policy developments | Data | More on this report

Japan has progressively reduced its support to agriculture and more recently the share of forms of support that most distort production and trade. However, at 49% of farm income Japan's support to agriculture remains twice the OECD average and its most production- and trade-distorting forms represent the majority of total support.

Prices received by farmers have come closer to the world market prices as documented by the Nominal Protection Coefficient (NPC). The share of direct payments in Producer Support Estimates (PSE) has been increasing in recent years, particularly in the form of area and income based payments.

Policy developments

  • Overall, there has been some progress in market orientation with a reduction in the level of producer support since 1986-88, but it is still twice the OECD average. A significant share of support continues to be provided through market price support, in particular to rice. In addition to border measures, the production adjustment scheme for rice keeps price high through limiting supply.

  • A new farm income support payment was launched as a pilot programme in 2010 for rice farms with a foreseen increase in the commodity coverage to upland crops (e.g. wheat, barley and soybean) from 2011. The payments are designed to cover the standard costs of production for these products. The new income support payment is commodity specific and it is available for all commercial rice farms irrespective of farm size. This is a step away from the recent reform initiative to re-orient support to less commodity specific payments and to target support to certain farms with a farm size threshold.

  • The government has been reducing its involvement in the price regulation. However, high levels of border protection remain and the actual effect on the level of the producer support estimate is still limited. The announcement of the Basic Policy on Comprehensive Economic Partnerships to commit the government to pursue high-level EPAs as well as strengthen agricultural sector is a move toward more market oriented agricultural policy reform.

  • Despite some progress, the proportion of support provided by the most distorting forms is still high. The new pilot programme for income support payments for rice farms is not reducing the high market price support of rice. Further efforts are needed to reduce the high level of support and increase market access, while moving towards more decoupled policies that are better targeted to farm income, rural development, and environmental objectives.

Data

Japan: OECD Producer Support Estimates (PSE) 
Level and composition by support categories, 1986-2010

 » Download: Data (Excel) | Definitions and sources (PDF)

Agricultural Policy Monitoring and Evaluation 2011:
OECD Countries and Emerging Economies
This report provides up-to-date estimates of support to agriculture and is complemented by individual chapters on agricultural policy developments in all countries covered in the report. Support is calculated using OECD Producer Support Estimates (PSE).

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