Japan rehearses agricultural reform after 60 years - Bill project that goes to Congress tests Abenomics, Prime Minister Shinzo Abe's policy to boost economy
The Prime Minister Shinzo Abe is doing a wide reform of Japanese agriculture, the first in 60 years, to prepare the sector for the Trans-Pacific Partnership (TPP). He will submit a bill project about this subject to the Congress, which should be the first major test of Abenomics.
The Japanese leader is criticized because so far he only implemented two pillars of this policy, increasing public costs and injecting money into the economy, but he set aside the third pillar, which are the structural reforms.
Japan has 700 local cooperatives and 47 provincial unions gathered under the Japan Agriculture (JA), one of the forces that sustain the government party, PSD. After the reform, JA would no longer audit the accounts of local cooperatives, but would maintain its role as "trading".
Another important point of the reform is to abolish the subsidies granted by the government to reduce the rice production. The logic is to prevent a fall in prices, but the people are very sensitive to this issue. However the political decision is already taken and the subsidy will be over until 2018. There are doubts about how it will be implemented.
According to Ichiro Abe, one of those in charge of the reform in the Ministry of Agriculture, the most important is to give freedom for Japanese farmers to innovate. The sector is still very conservative and almost everything is done manually.
To protect the sector, Japan charges heavy tariffs on food imports, which increases the cost of living. Local research institutes claim that food prices may fall 30% if the agricultural reform raises the average farm size of only one hectare to ten hectares. The government wants to encourage farmers to rent land from the elderly and increase their scale of production.
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