Starting in 1946, the Government of Japan oversaw a mass redistribution of agricultural property from a small proportion of the population, to a near universal ownership of property. Japan had long composed its economy around rice farming. Dating as far back to the Edo Period wealth was calculated in a measurement of rice required to feed a person for a year (koku/石高) instead of gold or silver. However, due to a feudal structure and large land holdings by temples and shrines, farmers rarely owned the land they farmed. That is, until the Land Reform Act of 1946, when landowners were forced to sell land that they were not directly farming. This government action was motivated by two factors. The first is that Japanese authorities and the Supreme Command of Allied Powers (SCAP) were concerned by a possible growth of Communist sympathies in rural communities. If farmers could own their own land it was believed that rural populations would be much less likely to adopt an anti-capitalist ideology. Douglas MacArthur believed that the new bill was,
“one of the most important milestones yet by Japan in the creation of an economically stable and politically democratic society. It marks the beginning of the end of an outmoded agricultural system …These can be no firmer foundation for a sound and moderate democracy and no firmer bulwark against the pressure of an extreme philosophy”
The second motivation was the desire to ensure Japanese food security, recognizing the loss of Japan’s overseas colonies and a devastation of much of the nation’s infrastructure. On both fronts, the Land Reform Act was a huge success. Communism never took hold in the countryside; in fact, rural voters remain some of the most committed supporters of right of centre political parties. Rice production also skyrocketed, peaking in the late 1960s.
As Japan rapidly industrialized, leading to a huge increase in wages, farmers risked falling behind in the ‘Japanese Miracle’. As a result of collective action, a group known as Japan Agricultural (JA) stepped in to lobby for subsidies, tariffs, and price controls to benefit rice famers. Because of such widespread landownership after the war, the average farm size remained around 3 hectares (1.5 dedicated to rice). Plots of land this small were rarely enough to sustain a full-time farmer, but were perfect for many farmers that chose to farm on part-time basis to provide some substantiate income.
In JA’s history, the interest group successfully lobbied for many polices that protected the status quo of Japanese rice farming. Many of the policies created benefitted farmers providing them with a huge “reward”, but in no way benefitted the general population. Rice subsidies mean that Japanese consumers are forced to pay twice for the protection of farmers. The first cost comes from taxation. Japanese citizens pay slightly higher taxes to fund direct subsides to farmers. The second cost is incurred at the checkout, where consumers are forced to buy JA marketed rice, with little or no foreign competition. One estimate is that without protectionist policies, consumers would be able to purchase 60kg of rice for ¥8,000, half of the current price (¥16,000).
JA as an interest group has been very successful at creating and sustaining subsides for its constituents. Much like sugar producers in the United States, rice farmers in Japan enjoy a number of policies and subsides created to serve their interests. For example: Japan created an idle-land subsidy to suppress rice production in 1971. The idea was that the government could award a monetary prize to land owners of agricultural property if they decided to forgo rice production. This policy was implemented in the midst of an overproduction of rice, and a declining consumption of rice. Because Japan failed to export rice to other Asian economies, the government decided to find a way to suppress production to keep farmers’ wages competitive. The idle-land subsidy remains in place today (In late 2014 the government pledged the eliminate the idle-land subsidy in 2018, but it is possible by then that a desperate government will pander to famers by capitulating) costing the government nearly $50bn (along with other transfers) a year to maintain—roughly half of the total value of the entire agricultural industry ($100bn). A second policy that harms consumers is an import quota and import tariff of foreign rice. Currently, imported rice beyond government quotas is levied a tax of 777%. This tariff eliminates any discount presented by purchasing rice from cheaper producers abroad.
JA is also engaged in a battle with the national government over the Trans-Pacific Partnership (TPP). Ideally the TPP would eliminate import tariffs on Japan’s 5 sacred agricultural products (rice, pork and beef products, dairy, wheat, and sugar). However, JA has waged a public relations campaign lambasting the TPP as a bad deal for Japanese consumers. JA incites fears over food security or a worry that the TPP would destroy rural communities—assuming that rural Japan maintains the soul of the nation.
Bureaucracies have also played a major role in farm subsides. The powerful Ministry of Agriculture, Forestry, and Fisheries Japan (MAFF) has been disseminating information claiming that without existing subsides and tariffs that the number of domestically produced calories would fall from 50-45% to 10-5% shortly after the TPP is implemented. The MAFF has an incentive to ensure that agriculture maintains an important part of the Japanese economy. With the existing subsidy regime, agriculture provides employment to 4% of working Japanese, but only contributes to 1% of the nation’s GDP. Without protection, this number would fall, leaving the MAFF with less of a mandate to maintain its current budget and level of staffing. As a result, JA works closely with the MAFF to ensure that the government does not alter existing policy.
Farmers are not required to be members of JA, but they are typically coerced in joining the cooperative to obtain access to rice markets. JA buys rice from farmers, markets it, and sells it under many brands. Farmers—unless they have direct access to the market—are usually forced to sell through JA, lest they challenge JA for contracts at big box stores. Private companies in recent years have made efforts to bypass JA by growing their own rice (Seven & I Holdings Co., Ltd. Lawson Inc., Zensho Co., Ltd, etc.), but they still make up a small part of overall production.
JA maintains a high level of political support through advertising. JA’s message of promoting not only “economic benefits” for all Japanese, but also “cultural benefits” compels many voters to support their initiatives. This eliminates the likelihood that despite the average age of a Japanese farmer expanding beyond 65 years old and few young adults interested in joining the industry that the government will give in and make reforms. If it were not for countervailing efforts from the Keidanren (Japanese Business Federation, another interest group), there wouldn’t be any negative pressure against JA; despite the massive financial burden existing policies impose on non-farming households.
This whole situation is a problem because young people are not attracted to the agricultural workforce. Younger farmers want to establish larger mechanized farms like elsewhere in the developed world, but with idle-land subsidies there is little reason for non-farming landowners to offload agricultural property. The cultural aspect espoused by JA is highly popular regardless of JA’s efforts and would likely maintain the protection of domestic rice production, as consumers buy into the idea that Japanese rice tastes better than rice produced elsewhere. Without removing tariffs the TPP is blocked, damaging other sectors such as manufacturing from gaining access to essential foreign markets.
Asia Pacific Policy 
