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Japanese agricultural policy development : implications for New Zealand

Research Archive

Japanese agricultural policy development : implications for New Zealand

Zwart, A. C.
Type: Discussion Paper
Permalink: https://hdl.handle.net/10182/661
Originally published: 1981-07 as Discussion paper (Lincoln College (University of Canterbury). Agricultural and Economics Research Unit) ; no. 57 by Lincoln College. Agricultural and Economics Research Unit.
Keywords: agricultural policy; agriculture; economic aspects; international trade; Japan; New Zealand

Abstract:

Agricultural policy in Japan has played an important role in limiting New Zealand's exports of agricultural products to that country. While there have been many specific changes in the policy over the last two decades, there does not appear to have been any major changes in the motivation of the policy makers. The current agricultural policy has been developed with the aim of increasing rural incomes to levels comparable with urban workers, and this has been accomplished through the payment of high support prices, and other subsidies to rice producers. This support for rice production has led to surplus production and a need to export rice at a loss. Throughout the 1970s further policies have been developed to divert rice production by supporting farmers who produce alternative products such as feed grains, vegetables and livestock products. This has led to the development of high support prices and extensive protection measures for many of these products, and forms the basis of New Zealand's difficulties in exporting to Japan. This paper outlines the development of these policies and describes the resultant growth in the livestock industries in Japan. While the growth in demand has kept up with production of beef in Japan, this does not appear to have been the case in the dairy industry. In the last few years, stocks of traditional dairy products such as butter and skim milk powders have accumulated, and imports have been eliminated. More recent policy initiatives have attempted to reduce the level of imports of non traditional dairy products and cheese. These moves have been blocked to some extent by the food importing and processing sector in Japan who are concerned about their access to low priced imported products. It appears that agricultural incomes in Japan will continue to be supported at very high levels. The adaptability which the producers have shown in their production of livestock is likely to cause continuing difficulties for New Zealand's exports of livestock products in their traditional form. This reduction in the potential market for traditional bulk products suggests that New Zealand should concentrate on the export of products which are not as openly competitive with local products. This includes more specialised food products and also products which are inputs into processing industries. This more positive approach to exporting would require less emphasis on government negotiations, which do not appear to have been particularly effective in New Zealand's case, and more emphasis on marketing and business skills.

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