Development of Japanese-Style Direct Payment and Future Perspectives

Abstract

In this study, we examined the development of Japanese-style direct payment programs and ways to design the programs in future reforms. Three Japanese-style direct payment programs are available: Direct Payment to Hilly and Mountainous Areas, which was established in 2000; Direct Payment for Environmentally Friendly Agriculture, which was introduced in 2011; and Direct Payment for Multi-functionality, which was implemented in 2014. All of them are based on the Food, Agriculture and Rural Areas Basic Act in 1999, the pillar of which is the “multi-functionality” of agriculture to sustain the co-existence of agriculture and the environment. A prerequisite for the concept of multi-functionality to work practically is the continuation of Japanese agriculture with feasible budgetary support. This has been realized somehow to this day. However, the increase in the number of elderly farmers is expected to reduce production rapidly, and international free trade negotiations, such as FTA and TPP, are expected to endanger the production of such main products as rice, milk, and beef. Once production is reduced rapidly, the prerequisite will not be satisfied. In this regard, we should find the best way to use land in terms of not only production but also environmental conservation irrespective of existing farming practices. The new agri-environmental programs should positively promote such changes in land use, and could be named “decoupling in agri-environmental policy.”