The Basic Law on Food, Agriculture and Rural Areas was enacted in July, 1999. The new law includes a plan to give the entire process of pricing over to market mechanism. It would put an end to agricultural price policy that used to be one of the major means of securing farmers' income in Japan. The new agricultural policy that will come into existence under the Basic Law seems to correspond with the WTO Agreement, which encouraged the introduction of free market mechanisms in agriculture. But it is far from it. There are very important improvements in the new law. It takes into account problems that were not even mentioned in the previous laws, such as a decision to target the low level of Japan's self-sufficiency ratio, promoting sustainable agricultural development and supporting the development of hilly and mountainous areas. This paper explores the Basic Law from a different viewpoint. This law seems to be an attempt to improve the policy of paddy field farming, the "New Rice Policy", which was outlined in the Staple Food Law, enacted in 1994. The "New Rice Policy" is aiming to compensate farmers income for the heavy losses. This aim to change the previous policy means a shift to a new model. The new policy provides support to rice farmers by making up their deficit under a new model of income compensation policy. This paper will focus on large farms -characteristic of Hokkaido prefecture- located in rice growing regions. Based on this example, the intentions and limits of the Basic Law will be questioned. The results indicate that the new law did not have much impact on rice farming, however the Production Diversion Program added up significantly to the policy of income compensation, concerning soybeans and wheat.

View full abstract

"The Staple Food Law" has failed to reduce the gap of rice supply/demand and to stabilize a producer price for rice farmers. "The New Rice Policy" (The Fundamental Principles of the Measures for Rice for the Rice Years 1998 and 1999) and "The Fundamental Principles of the Measures for the Promotion of the Farming Practices Contributing to the Effective Use of the Paddy Field for Five Rice Years from 2000" shows that the Ministry of Agriculture, Forestry and Fisheries has taken measures hurriedly against this difficult problem in line with the policy of "The Basic Law on Food, Agriculture and rural Areas" which was enforced in July 1999. This paper evaluates critically the latter "Fundamental Principles" by the method of income-analysis of a large rice farmer who is cultivating 18ha paddy field in the northern region of Kyushu (Fukuoka Prefecture) and is now suffering from this governmental policy development. There are good grounds that the Fundamental Principles disappointed many large rice farmers.

View full abstract

In March 1999, 'The New Dairy and the Dairy Industry Policy' was announced. It is correct that the new policy is a large reformation of Japanese dairies and dairy industries, and is based on abolishing the core parts of the present policy. However, I examined the new policy, and found that there are many problems concerning it. They are as follows: 1) Compared with the present policy, the new system of 'supply and demand, and the stability of the market price of fresh and unprocessed milk' in the new policy, is unstable for dairy farmers. Conversely, it is a system for major dairy companies to get fresh and unprocessed milk easily and inexpensively. 2) The new policy abolished the core parts of the present policy without evaluating its positive elements. It affords a basis in that it is a measure to fulfill international participation in WTO, but the object of the reduction of the Aggregate Measurement of Support has already been overachieved in Japanese dairies and dairy industries. 3) The new policy sets the goal of creating inexpensive dairy products. The aim is to have a small number of major dairy companies, but will not cope with the situation, although many small dairy industries are now undergoing "scrap and build" plans. 4) The new policy suggests that it serves the consumer's needs of "100% natural milk" and having the quality indicated on the milk carton. However, this has been distorted in the process of the discussion of putting it into operation and enforcing it.

View full abstract

[in Japanese]

View full abstract

"c+v" theory has been widely recognized as a fundamental theory which shows the relation between non-capitalistic family farms and the capitalistic economy, "c" and "v" express the constant capital and the price of agricultural labor or the required household expenses of a farm family, respectively. According to this theory, since "v" is prescribed by non-agricultural-employed laborer's wages, the rise in agricultural productivity brings profits and a land rent in addition to wages to some owner-farmers. Consequently, the farmer class decomposes capitalistics and employed laborers and capitalistic agriculture is born from owner-farming. With such an interpretation, "c+v" theory is regarded as the basic theory which shows the future vision of the capitalistic economy which includes owner-farmers. However, the vision of the formation of capitalistic agriculture with sufficient profits and a land rent has not been actualized in Japan. First of all, except for period immediately after the end of World War II, agricultural labor income has not been balanced by laborer's wages. It is shown clearly in this paper that the the theory has the following fatal problems. It depends on a semblance, "price of labor", and on an error in which value and price of small farmer's commodities are prescribed by laborer's wage law. The mechanism of formation of laborer's wages differs fundamentally from the value and price of small farmer's commodities. Therefore, "c+v" theory cannot be adjusted in the value theory and cannot have validity as a social economic theory. But, why, then, was such theory made into the basic theory on the agricultural problems? The reason is that it is exactly a reflection of the conflict included in the actual mechanism by which the farm family is reproduced, and that the conflict expressed by the mechanism of the reproduction of a farm family is the constant antagonism between the family farm and the capitalistic economy. This paper clearly shows from the structure of this reproduction that the subject entrusted to this theory is in the grasp of the conflict between capitalism and agriculture. Present family farming theory should be built by the result of capital accumulation movement rather than capital theory. However, the conventional theory which makes the cost price theory a starting point therefore is based on what the capital law realizes. Consequently, it has a fatal defect in dealing with problem exceeding capitalistic economy, such as agricultural environmental problems and national agreements regarding of supporting agriculture. That is the reason that we ask for the abandonment of "c+v" theory as the first step toward resuscitation of the theory on agricultural problems.

View full abstract

[in Japanese]

View full abstract

Currently, the U.S. agro-food sector is in the midst of transformation process so-called 'Industrialization.' Under this structural change, it is increasingly critical for farmers and their cooperatives to get involved forward into value-adding stages in the commodity chains. Rapid development of the new generation cooperatives (NGCs) in the 1990's can be recognized as one of the possible alternatives to cope with this challenge. The NGCs are apparently different from conventional farmers' marketing and/or supply cooperatives, with the most characteristic and critical system of 'delivery right share.' A unit of delivery right share represents (1) the legal right and duty to deliver a defined amount of agricultural product to the cooperative, (2) the right to receive cash dividends in proportion simultaneously both to the patronage and to the equity investment. And (3) it is transferable, with appreciated or depreciated price reflecting the value of the cooperative as a business entity. With this system, the NGCs can successfully address the free-rider problem, horizon problem, and portfolio problem. These problems are among the critical reasons why the members of conventional cooperatives hesitate to increase their equity investment, and consequently the cooperatives suffer from the lack of sufficient capital necessary to enter value-adding activities. Among the main conclusions from the case study on some NGCs' in the grain producing area are as follows. The value-adding activities on agricultural raw products by NGCs, particularly in the special commodities and/or niche markets, are effective as means to retain more value in the hands of farmers, as well as to revitalize the rural economies. On the other hand, the NGCs, activities in the more generic commodities and/or oligopolistic markets, where they must compete with the huge multinational agri-food businesses, are somewhat complicated. Because of the scale-economy, tough competition, and relatively generic character of the farm products, it is difficult to remain the delivery right share system, and then the NGCs are faced to the likeliness to transform into the large regional cooperative approach, or even to the invester-oriented firm approach.

View full abstract