Abstract
Japan finally accepted and implemented tariffication for rice imports as of April 1, 1999. Despite the intention of the government, who estimated smaller amount of rice imports and less pressure to the domestic producers, tariffication allows unlimited amount of imports provided that tariff is paid. Under an careful estimates of production costs and quality evaluation of foreign produced rice, high quality rice may be imported at a considerable amount much earlier than the government originally forecasted, assuming that a 2.5% reduction of tariff rate continues and domestic market prices do not change beyond year 2000. A 2.5% reduction of tariff implies that domestic market prices will eventually decline by 100 yen per year for 10kg of rice.
In this situation, Japanese rice producers need to prepare for the up-coming competion from the rice imports. Reduction of production costs and increases in quality of rice produced are important. Removal of the current diversion program, in particular, should allow producers to cut down costs. Because of diversification of sources of high quality rice supply due to tariffication, degree of national food security may be enhanced by the tariffication.
