Can Kan deliver a breakthrough on Japan’s agricultural trade policy?

Author: Aurelia George Mulgan, UNSW@ADFA

Can we expect Japan to dump agricultural protection as it prepares to enter negotiations on a Trans-Pacific Partnership (TPP) and to host APEC? Only by dint of strong prime ministerial leadership capable of overcoming rising opposition from agricultural groups and pro-agriculture politicians within his own party and government.

A Japanese farmer on the fields

In many respects the DPJ administration is still playing with the same deck of cards as previous LDP governments. Japan has had a change of party in power and now has the policy instruments in place to facilitate agricultural trade liberalisation with the introduction of direct income subsidies for farmers. However, the same old obstacles to progress are all too visibly in evidence.

The most serious obstacle is Kan’s executive line-up on agriculture. The minister, Kano Michihiko, was appointed by Prime Minister Kan as a veteran agricultural policy expert, but his career history before he joined the DPJ in 1998 reveals a conventional background as a former LDP nōrin zoku (agricultural tribe Diet member). He was a member of the LDP for 18 years (from 1976 until 1994), during which time he served as Minister of Agriculture, Forestry and Fisheries in the Kaifu Cabinet, and was also a member of the LDP’s Agriculture and Forestry Division and Comprehensive Agricultural Policy Investigation Committee (CAPIC), which he chaired in 1992. These two intra-party committees were the primary vehicles for transmitting pro-farmer pressures into policymaking, holding successive LDP governments’ feet to the fire on agricultural support and protection issues. Kano was also prominent as a rice Diet member (kome giin), once occupying the post of Secretary-General of the LDP’s Rural Promotion Diet Members’ Council, described as a ‘gathering of rice Diet members within the LDP responding to farmers’ power’. In this role he was active in promoting increases in the producer rice price, representing as he does one of Japan’s major rice-growing areas in Yamagata Prefecture. Another field in which he specialised as an LDP nōrin zoku was rural development programs (i.e. pork barrelling) in the Mountain Village Promotion Countermeasures Special Committee.

Kano’s career history suggests that he is by no means an agricultural reformer; in fact quite the reverse. On his website, he pleads the national interest case for agricultural support and protection, hammering the need for food security, for agriculture to be treated as an environmental, community and ‘human’ industry, for rice as a staple food, and for agriculture as regional policy. He takes the credit for billions of yen spent on policies for hilly and mountainous areas, for reducing the burden of farmers’ expenses on land improvement and for measures to expand rice consumption. As agriculture minister in the DPJ’s ‘Next Cabinet’ in 2004, he pushed for an ‘Agriculture, Forestry and Fisheries Revitalisation Plan’, which became the prototype of the current system of direct income subsidies. For this he earned Kan’s trust because the DPJ adopted the plan in the 2007 elections and it proved a vote winner amongst farmers. When the prime minister appointed Kano as MAFF Minister last September, he gave him a list of six priority areas, including EPAs and direct income subsidies for farmers. Kano subsequently gave a public assurance that he would exert his ‘full power’ to ensure that the new income support system was established along with the necessary budgetary funding. He made a case for the proposed environment tax being used as a possible source of increased funding for farm income subsidies on the grounds that ‘primary industries are environment industries’ .

On balance, however, Kano is pro-agriculture and anti-trade. He has crossed swords with Foreign Minister Maehara Seiji on relaxing restrictions on importing US beef, declined the offer from New Zealand, already a TPP member, to sign an EPA, and has sounded a cautionary note about what needs to be done before Japan can consider joining the TPP. He has publicly declared that he does not agree with Maehara’s views on the TPP and warned that it may take considerable time to win understanding from domestic farm interests about losing the tariff barriers that currently protect them from import competition.

Other key members of Kan’s cabinet also possess what the agricultural cooperative organisation’s political arm (the League of National Farmers Agricultural Policy Campaign Organisations) describes as a ‘deep’ understanding of agricultural policy (meaning pro-agriculture sympathies). The list includes Minister of Internal Affairs and Communications, Katayama Yoshihiro, who is a former Governor of Tottori Prefecture, and Minister of Economy, Trade and Industry, Ohata Akihiro, who is an Ozawa supporter and a former socialist representing a semi-rural constituency in Ibaraki, who is a vital player in advancing Japan’s trade policy and who could normally, as METI Minister, be expected to adopt a strong pro-trade position. In recent days, he has toned down his enthusiasm for Japan’s joining the TPP, saying that it is neither a foregone conclusion nor a top priority for the government.

Yet another member of the group with ‘deep’ understanding of agriculture is Hachiro Yoshio, who holds the position of Chairman of the DPJ’s Diet Affairs Committee. He too is an ex-socialist, a former farmer and employee of an agricultural cooperative in Hokkaido. In addition, Prime Minister Kan has appointed a politician from the same socialist stable, Tsutsui Nobutaka, from rural Niigata, as Senior MAFF Vice-Minister. Tsutsui once proclaimed that he believes in ‘cultivating agriculture’. He held the position of MAFF Minister in the DPJ’s ‘Next Cabinet’ and is a former Chairman of the Lower House Agriculture, Forestry and Fisheries Committee. One of his policy principles is ‘building a foundation on which small and medium enterprise and agriculture are the driving force of the regional economy’. He supported Ozawa in the election for the DPJ presidency in September, and is a member of the Ozawa group. Members of this group have come to play a pivotal role within the DPJ in opposing Japan’s participation in the TPP.

Kan appointed another Ozawa henchman and former member of Ozawa’s Liberal Party, Matsuki Kenko, as Parliamentary Secretary of Agriculture, Forestry and Fisheries. Top of the list of Matsuki’s policy proposals is the idea that a system should be constructed in which domestic agriculture can play two key roles: food supply and preserving the environment. He has joined the group of about 110 DPJ Diet members, including many Ozawa followers, who oppose Japan’s joining the TPP, as have former Prime Minister Hatoyama (who is advisor to the group) and leader of the People’s New Party, Kamei Shizuka. They are led by the MAFF Minister in the previous Kan Cabinet whom Kan appointed as Chairman of the Lower House Agriculture, Forestry and Fisheries Committee, Yamada Masahiko, who has been praised for his views on agricultural policy by the national farmers’ league. Yamada has expressed his open opposition to Prime Minister Kan’s announcing that Japan will join the TPP negotiations at APEC. Given Ozawa’s well-known position that free trade should be promoted and that direct farm income subsidies should facilitate it, the fact that his own group of supporters is leading the charge against Kan is ironic.

The politician with carriage of EPA policy and given the task of evaluating the TPP in the Cabinet Office is another fervent Ozawa supporter and agricultural specialist – Hirano Tatsuo from Iwate. He is a former MAFF official and ex-chairman of the House of Councillors Agriculture, Forestry and Fisheries Committee. He has also been active in the party in various agriculture-related policy positions as Assistant Chairman of the Agriculture, Forestry and Fisheries Groups Bureau and Vice-chairman the Agriculture, Forestry and Fisheries Revitalisation Central Headquarters. He currently belongs to the DPJ’s Agriculture and Forestry Division (in the revived PARC). At a recent meeting of the group he assured other members that MAFF Minister Kano would protest to Foreign Minister Maehara about the latter’s statement that the ‘rest of the economy was being held hostage to agriculture’. Hirano has expressed caution himself about progressing the TPP issue, acknowledging that ‘Japan’s announcement of its intention to join the TPP ‘will not come easily’ [as there are] ‘many hurdles left to clear‘. He will play a key coordinating role in formulating the government’s ‘Basic Policy on EPAs’ (which is supposed to include wording on Japan’s participating in the TPP) along with the deputy ministers of MAFF, METI and MOFA.

Kan may rue the day he decided to balance out his cabinet with sub-cabinet appointees from amongst Ozawa supporters, many of whom represent rural and regional constituencies, and who are only too willing to cross the institutional dividing line between executive and party in order to undermine one of the prime minister’s key policy initiatives.

Aurelia George Mulgan is Professor of Politics at the Australian Defence Force Academy of the University of New South Wales.

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  • Ippei Yamazawa

    November 11, 2010
    Dear Aurelia,
    Your report is very informative about how fiercely ‘agricultural tribe Diet members’ object to Kan’s initiative for TPP within his own DPJ by giving their detailed careers in agricultural protection for past decades. I have myself not kept this detailed records of them. You may have almost persuaded readers outside Japan that Kan’s attempt will fail in the coming several months. I wonder whether it is your intension of contributing this report.
    Indeed the same objection has been repeated under LDP administration for the past twenty years. However, I wish you, renown expert of the Japanese agricultural policy, to report to foreign observers an important change from the past witnessed this time. After PM Hosokawa’s acceptance of the UR agricultural agreement in 1993, no LDP PMs coped seriously with dismantling the agricultural protection, while Japanese farmers decreased by 25 percent in number and vast paddy field are left uncultivated not because of import surge but because they become over seventy without no successors. Agricultural cooperatives and their tribe Diet members have become a strong vested interest group feeding on the huge government subsidy. Farmers themselves know this reality that Japanese agriculture will ruin under the current policy. Even tribe Diet members in both LDP and JDP admit in all seriousness that we have to change this. PM Kan is the first to admit this reality openly and tackle this difficult job. He deserves your encouragement. Regards. Ippei Yamazawa.

  • Aurelia George Mulgan

    Dear Ippei san,
    Thank you for your kind comments on my posting and for raising the issues that you did. In fact, my real intention (honne) was to cheer Prime Minister Kan on, but I chose to do so by underlining just what a difficult political job he has ahead of him, particularly with the Ozawa group operating like an opposition party from within the DPJ and with so many high-level executives in his own government equivocating at best and blocking at worst. Perhaps the tone of my comments also reflected my frustration that so many (policymaking) patterns reminiscent of the bad old LDP days seem to repeating themselves despite the change of government. Perhaps I also suspect that Prime Minister Kan is trying to ‘walk both sides of the street’ (i.e. satisfy all sides) in supporting both agricultural market opening and ‘revitalising the agricultural sector’ – an extremely tall order. We both know what this means – real structural reform of the industry, a goal often professed by Japanese governments, including the MAFF, but which has never really been attempted let alone achieved. It will also require some hard political choices in which the prime minister cannot possibly satisfy all sides. Moreover, the DPJ could have laid the groundwork for this process by restricting its direct income subsidies to larger-scale farms and deregulating the market for agricultural land, but it has failed to so do – clearly for reasons of short-term electoral gain. Are these going to disappear? I don’t think so. I take your point that many farmers understand that there is no future for Japanese agriculture without reform (as do some politicians in the DPJ and LDP), but perhaps a greater number (small-scale, part-time agricultural producers who are in the vast majority) would prefer the status quo. That is certainly what they are saying if we are to believe their political representations (including by JA, their spokesperson). I appreciate, nevertheless, that Prime Minister Kan has seized the bull by the horns, so perhaps I should end by saying ‘Ganbatte Kan san’! Let’s hope ‘Kan can’.
    Best regards, Aurelia