Author: John McCarthy, ANU

Palm oil is now the world’s most widely traded vegetable oil. As Indonesia is the centre of global production, palm oil is a priority for Indonesia’s economic planners. With millions of hectares either under oil palm or planned for development, a highly polarized debate surrounds the question of oil palm development in Indonesia. The underlying question here is: can a boom in agricultural commodities such as oil palm provide a pathway out of poverty? Or does it amount to an instrument of mass immiseration?

In the last year, Greenpeace has pursed a very successful campaign against a range of large multinationals.
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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.

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. Read more…

Author: Rajiv Kumar, ICRIER

Agriculture has emerged as the key constraint to achieving rapid growth and improving equity in India. It is also clear that while land, the principal productive asset, is almost entirely under private ownership, the sector is characterised by extensive government intervention and a visible lack of large-scale corporate investment.

As a result of insufficient investment, the agricultural sector – except perhaps in the Punjab, Haryana and the Terai region of Uttar Pradesh – remains backward. Read more…

Authors: Raghbendra Jha and Raghav Gaiha, ANU

Inflation has been in the news for some time. Recent media reports have stated that the Reserve Bank of India (RBI) deems current inflation to be a scourge. This inflation has also been relentless.

There seems to be broad consensus among analysts that the current spate of inflation had its roots in food price inflation. Last year’s drought led to steep rises in retail food prices followed by hikes in procurement prices for farmers. Read more…

Authors: Adil Khan Miankhel and Shahbaz Nasir, ANU

Pakistan is experiencing its worst natural disaster.  While the human toll of the disaster is bad enough, the collateral economic damage is catastrophic. Flooding is spread over all four provinces of Pakistan, affecting 20 million people, a population equal to Australia’s, and inundating a geographical area the size of England.

Louis-George Arsenault, director of emergency services for UNICEF, says the flood crisis in Pakistan is the biggest humanitarian crisis in decades. Maurizio Giuliano, a spokesman for the UN Office for the Coordination of Humanitarian Affairs (OCHA), says the flood is worse than the tsunami, the 2005 Pakistan earthquake and the Haiti earthquake. Read more…

Author: Jeffrey Frankel, Harvard

I recently listed some policies and institutions with which various small countries around the world have had success — innovations that might be worthy of emulation by others. Of course there are plenty of other examples of policies and institutions that have been tried and that are to be avoided. The area of agricultural policy is rife with them. Many start with a confused invoking of the need for ‘food security.’

The recent run-up in wheat prices is a good example. Robert Paarlberg wrote an excellent column in the Financial Times recently, titled ‘How grain markets sow the spikes they fear.’ Read more…

Author: Rajiv Kumar, ICRIER

When discussing the potential crisis in Indian agriculture, some point at the archaic laws that govern land lease and sales and others at the continuing ban on inter-state movement of agricultural produce as major impediment to the modernisation of the sector.

These are surely valid issues, but the way to overcome these constraints is to facilitate the entry of private, cooperative or commercial investors in any segment of agriculture. These investors will generate the impulses to change the ground realities of archaic laws, the ban on inter-state movement, the tyranny of petty babudom or the dysfunctional working of the entire range of service providers who see their mandate not as providing a particular service but as a licence for generating rents. Read more…

Author: Aurelia George Mulgan, UNSW@ADFA

The Hatoyama administration has approved a fiscal 2010 budget containing ¥561.8 billion in expenditure on a new ‘individual household income compensation system’ (kobetsu shotoku hoshō seido) for farmers, to be launched in April. This income subsidy will compensate farming households for losses incurred as a result of higher production costs and lower market prices. The scheme will begin with a ‘model project’ targeting rice farms nationally.

The process undertaken in determining the budget for the policy illustrates how little has changed in agricultural policymaking under the Democratic Party of Japan (DPJ) compared to the Liberal Democratic Party (LDP). Read more…

Author: Kazuhito Yamashita, RIETI

Japanese agriculture is in a free-falling decline. In the years between 1960 and 2005, the share of agricultural output in GDP dropped from 9 per cent to 1 per cent, the food self-sufficiency ratio from 79 per cent to 41 per cent, and agricultural land, indispensable for food security, from 6.09 million hectares to 4.63 million hectares.

Meanwhile, the ratio of part-time farm households, which derive more than half their income from non-farm employment, increased from 32.1 per cent to 61.7 per cent. The percentage of farmers over 65 years old also jumped from 10 per cent to 60 per cent. Read more…

Raghbendra Jha, ANU

Indian policymakers pride themselves on the fact that the Indian economy was able to pull out of the Global Financial Crisis (GFC) relatively unscathed, with real GDP growth rate falling to 6.7 per cent in 2008-09 as compared to the 9 per cent in 2007-08 and expected to rise above 7 per cent in 2009-10. At the onset of the GFC, many commentators had expected a collapse of growth, with some even predicting a return to the sluggish growth of the mid to late 1990s.

Thankfully, the Indian economy proved the predictors of doom wrong. Read more…

Author: Aurelia George Mulgan, UNSW@ADFA

In the 2003 Lower House election, the DPJ, led by Kan Naoto, compiled an election manifesto that promised to create a system of direct payments to farmers. This matched the broad trend in government agricultural policy away from price supports to direct income subsidies to farmers.

Two years later, in the 2005 Lower House election, the DPJ, under Okada Katsuya, offered a ¥1 trillion direct payment system to all farm households marketing agricultural products. It also extended this offer to farm households in hill and mountainous areas and those whose agricultural production activities served environmental protection functions. Read more…

Author: Aurelia George Mulgan

The appointment of new Ministry of Agriculture, Forestry and Fisheries (MAFF) Minister Hirotaka Akamatsu – one of the most high-profile members of the DPJ, but a politician with almost no expertise on agricultural policy – is being interpreted as a symbol of the DPJ administration’s reform aiming to cut long-standing ties between Kasumigaseki (where Japan’s main ministries are located in Tokyo) and Nagatacho (where LDP headquarters is).

The Japanese press reports that MAFF bureaucrats, who, together with the LDP have controlled the country’s agricultural policy since 1955, have been gearing up for a war with the DPJ on the issue of transferring policymaking power from bureaucrats to politicians.

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Author: Aurelia George Mulgan

In what should be good news for Australian farmers, the recent Democratic Party of Japan’s electoral victory potentially clears the way for a radical shake-up in Japanese agricultural trade policy. Initial assessments have been pessimistic about the possibility of a breakthrough on agriculture in Australia-Japan FTA negotiations. But the chances of real change are highest at the WTO and over the medium, rather than short term.

During the election campaign, the DPJ backtracked on its proposal for a Japan-US FTA in the face of protests from farm leaders. However, in contrast to its cautious attitude towards bilateral free trade schemes, the party showed a much tougher attitude on WTO trade policy, and seeks an early conclusion to the Doha Round negotiations. While exceptional treatment for specific agricultural items can be built into bilateral trade agreements, it is much harder to secure the same sort of deals under multilateral arrangements.

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Author: Peter Drysdale

This week at the G20 meetings in Pittsburgh, there will be an important opportunity to shape the outcome of the Copenhagen meeting on climate change in December. Much swings on the position taken by China and the emerging economies. Ross Garnaut discusses that issue and others in the lead this week, one year after he presented his Climate Change Review to the Australian Government. In a tour de force [mp3 audio] on the subject at the ANU last week, he noted that the international regime he proposed in his report has received quite a lot of attention in China and India, as well as Indonesia. These countries are all important members of the G20, another reason why that group should be entrenched as the primary forum for global dialogue on economic and other issues. Read more…

Author: Aurelia George Mulgan

The selection of the new MAFF minister, Akamatsu Hirotaka, makes more sense in terms of well-established cabinet selection principles than in terms of his personal expertise for the job. Nothing in the professional background of the new MAFF Minister qualifies him specifically for the post in Agriculture. For the same reason, he could not be considered captive of agricultural interests, which may turn out to be a real strength in dealing with the Ministry of Agriculture, Forestry and Fisheries (MAFF) and the farmers’ cooperative organisation (JA). With no fixed ideas of his own, Akamatsu will be a cypher for the party leadership and its farm policy manifesto, which he can be expected to implement faithfully.

Akamatsu is a city boy, born in Nagoya, with a degree in Politics and Economics from Waseda University. He hails from the DPJ stronghold of Aichi (the urban constituency of Aichi 5), although in 2005, he was relegated to the Tokai bloc, having lost his constituency seat for the first time since 1996.

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