Special topic. A big change to a New Agriculture Policy

Transcription

1 Special topic A big change to a New Agriculture Policy ( ) ( ) A decade has passed since the establishment of the Food, Agriculture and Rural Areas Basic Act. The fundamental mission of this Act is based on the four pillars of securing stable food supply, fulfillment of multifunctional roles, encouraging sustainable development of the agriculture industry and supporting rural areas. Although various efforts related to this Act have produced a certain level of results, the agriculture industry and rural areas continue to exist in a state of crisis, mainly because such as the food self-sufficiency ratio has remained low, consumer confidence in food safety has plummeted, income from farming has fallen, farmland and the farming population has dwindled, and the vitality of rural areas has abated. Following a comprehensive review of the situation, in March 2010 this administration released the new Food, Agriculture and Rural Areas Basic Plan. This plan outlines a big change in policy that designates food, agriculture and rural areas governance as a national strategy. Looking back at the history of the Basic Plan, this special topic describes major trends and policies that have been implemented in the areas of food, agriculture and rural areas since its introduction. It also summarizes the main points of the big change effected by the Plan. As a notable topic, the report also covers the pilot program to provide direct payment of income support launched in FY2010 in preparation for full-scale implementation of this enterprise. 5

2 Past food, agriculture and rural areas policies In July 1999, the government revised the Agricultural Basic Act and created the Food, Agriculture and Rural Areas Basic Act because the status of food, agriculture and rural areas was changing drastically as represented by a decline in the food self-sufficiency ratio, the aging of the farming population, decreases in farmland and loss of vitality in rural areas. The fundamental mission of this Basic Act is defined by the four pillars of securing stable food supply, fulfillment of multifunctional roles, encouraging sustainable development of agriculture and supporting rural areas. In this manner, the Act presents an administrative scheme for governing food, agriculture and rural areas. Specific aims include: In the area of food, ensuring stable food supply at reasonable prices ; integrating the import of food with maintenance of reserves for the purpose of achieving stable food supply while recognizing that reinforcement of domestic agricultural production is a fundamental goal ; and securing stable supply of food in emergency situations. In the area of agriculture, establishing an ideal agricultural structure that provides adequate farmland and agricultural water as well as support for principle farmers. In the rural areas, aiding communities through welfare policy enhancements that improve agricultural production and living conditions. Figure 1: From the Agricultural Basic Act to the Food, Agriculture and Rural Areas Basic Act Source: Ministry of Agriculture, Forestry and Fisheries 6

3 The first Food, Agriculture and Rural Areas Basic Plan in accordance to the new Basic Act was released in March This Basic Plan placed emphasis on food consumption policies, policies to establish an ideal agricultural structure and measures to aid hilly and mountainous areas. However, although it laid out a goal of providing more than 50% of the calories required by the people of Japan through domestically produced food, in FY2010 the government set the target for the food self-sufficiency ratio at 45% on a supplied calorie basis. Aims of the Basic Plan released in March 2005 include: Implementation of risk management to respond to rising concerns for food safety Transition from price and management stability measures based on individual commodities to a cross-commodity policy that supports management by local principle farmers Organizational reform for principle farmers and farmland in order to realize efficient land utilization and an ideal agricultural structure Further enhancement of policies focusing on environmental conservation and development of policies for preserving regional resources such as farmland and water In addition the government set the food self-sufficiency ratio target to be attained by FY2015 of 45% on a supplied calorie basis and 76% on an agricultural output basis. Based on these two Basic Plans, the government intends to continue efforts for reform in various fields such as food safety, support for principle farmers and farmland, new rice policy development, and aid for hilly and mountainous areas. Figure 2: Major items of the past two Food, Agriculture and Rural Areas Basic Plans The food self-sufficiency ratio target Measures to be effected Achieving stable food supply Sustainable development of agriculture Support rural areas Basic Plan released in March 2000 Basic Plan released in March % on a supplied calorie basis by FY % on a supplied calorie basis by FY % on a production output basis by FY2015 Measures for food consumption Reliable food security during emergency situations Establishing an ideal agricultural structure Developing and disseminating technologies Organizing a pricing system for agricultural produce and achieving stable management of farming businesses Maintenance and advancement of natural cyclic functions Comprehensive support rural areas Support for hilly and mountainous areas Achieving food security and gaining consumer confidence Promoting dietary education to realize an ideal dietary lifestyle Promoting the goal of local consumption of local produce Achieving stable import of food and food security during emergency situations Educating and securing principle farmers to achieve an ideal agricultural structure Educating and securing human resources Promoting efficient utilization of farmland Establishing measures for stable management of farming businesses Promoting diversification of business management Promoting partnerships between the agricultural and food service industries Promoting the export of agricultural produce and food Improving the foundations for business growth Improving the foundations for agricultural production Adopting environmental measures in agricultural production Effective utilization of biomass Creating measures to conserve resources Revitalizing the economies of rural areas Promoting cohabitation and exchange between cities and rural areas Achieving a satisfying and secure standard of living in rural areas Source: Ministry of Agriculture, Forestry and Fisheries 7

4 Figure 3: Important measures initiated between FY2000 and FY2004 General Overall agricultural policy FY2000 Enactment of the special mergers measure (Apr to Mar. 2005) (legal amendment regarding the special law on the merger of municipalities) Food, Agriculture and Rural Areas Basic Act (Jul. 1999) Food, Agriculture and Rural Areas Basic Plan (Mar. 2000) FY2001 The terrorist attacks on the U.S. on September 11, 2001 The government decides to initiate the so-called basic reform program (Jun. 2001) Discovery of cows infected with BSE (Sep. 2001) Achieving food security/ consumer confidence Mandatory indication of origin on fresh foods (Jul. 2000) Mandatory indication of ingredients on processed foods (Apr. 2001) Mandatory labeling of genetically modified food (Apr. 2001) Achieving stable food supply Daily diet Japan s Dietary Guidelines (Mar. 2000) Food industry Containers and Packaging Recycling Act (Apr. 2000) Food Recycling Act (May 2001) International Agricultural negotiations at the WTO begin (Mar. 2000) Japan submits proposals at the WTO agricultural negotiations (Dec. 2000) Government study on safeguards for green onions begins (Dec. 2000) The Doha Round of the WTO begins (Nov. 2001) Sustainable development of agriculture Agricultural structure/ business management Farmland Agricultural production/ major foodstuff Outlook for the agricultural structure of the nation (Mar. 2000) Revision of the Agricultural Land Act (Mar. 2001) Agricultural production legal persons are allowed to go public Biomass Support for rural areas Program of direct payment to hilly and mountainous areas (2000 and beyond) The Science Council of Japan Evaluation of the multifunction of agriculture and forestry (Nov. 2001) Figure 4: Important measures initiated between FY2005 and FY2009 FY2005 General Aichi Expo Nature s Wisdom (Mar. to Sep. 2005) FY2006 Japan s total fertility rate hits 1.25, the lowest in history (2006) The proportion of people over the age of 65 reaches 20.1% of the total population, the highest in the world (2006) The total population declines for the first time since WWII (2006) Overall agricultural policy Concerning Promotion of a New Agriculture Policy for the 21st century (Apr. 2005) A New Agriculture Policy for the 21st Century: 2006 (Apr. 2006) Achieving food security/ consumer confidence A manual of standard procedures for risk management is published (Aug. 2005) The Positive List System for Agricultural Chemical Residues in foods is launched (May 2006) Revision of the JAS Act (Mar. 2006) The registration authority is transferred to the private sector Achieving stable food supply Daily diet Food service industry Dietary Education Basic Act (Jul. 2005) A Guide to a Balanced Diet (Jun. 2005) Basic Plan to Promote Dietary Education (Mar. 2006) EPA with Mexico is established (Apr. 2005) EPA with Malaysia is established (Jul. 2006) International Sustainable development of agriculture Agricultural structure/ business management Farmland Agricultural production/ major foodstuff Policy Outline for Measures to Stabilize Agricultural Business Income (Oct. 2005) Nationwide introduction of special lease zones (Sep. 2005) Cross-Commodity Measures to Stabilize Agricultural Business Management (2006) Act on the Promotion of Organic Agriculture (Dec. 2006) Biomass The Comprehensive Biomass Nippon Strategy (Mar. 2006) Progress schedule to significantly increase production of domestic biofuels (Feb. 2007) Support for rural areas 8

5 (continued) FY2002 FY2003 FY2004 Proclamation of the Act for Special Zone for Structural Reform (Dec. 2002) Severe draughts in North America and Australia (2003) The SARS influenza wreaks havoc mainly in China and Taiwan (2003) New bills are issues (Nov. 2004) A Plan to Renew Food and Agriculture (Apr. 2002) Food, Agriculture and Rural Areas Basic Plan (Mar. 2005) Revision of the JAS Act (Jul. 2002) Expediting public announcements of commercial violators and reinforcing punishments Revision of the Agricultural Chemicals Regulation Act (Mar. 2003) Revision of the Agricultural Chemicals Regulation Act (Jul. 2003) Act on Special Measures concerning the Management and Relay of Information for Individual Identification of Cattle (Dec. 2003) Policy outline for food safety and security (Jun. 2003) Food Safety Basic Law (Jul. 2003) Revision of the Agricultural Chemicals Regulation Act (Jun. 2004) Revision of the Wholesale Market Act (Jun. 2004) EPA with Singapore is established (Nov. 2002) WTO Ministerial in Cancun (Sep. 2003) Agreement on a framework for WTO negotiations (Jul. 2004) Outlook for agriculture structure of the nation (Mar. 2005) Participation of publically-traded companies in the agriculture industry through a lease system (Apr. 2003) Outline for rice policy reform (Dec. 2002) Revision of the Food Act (Apr. 2004) Abolishment of the planned distribution system, reevaluation of production adjustment The Comprehensive Biomass Nippon Strategy (Dec. 2002) Kyoto Protocol is issued (Feb. 2005) Conference to Promote Cohabitation and Exchange Between Cities and Rural Communities (All Right, Nippon!) is established (Jun. 2003) (continued) FY2007 FY2008 FY2009 Subprime loan crisis in the United States (2007) The baby boomer generation gradually retires (2007) Lehmann Shock (2008) Global swine influenza outbreak (2009) Global financial crisis (2008) Discovery of illegal distribution of tainted rice (Sep. 2008) A New Agriculture Policy for the 21st Century: 2007 (Apr. 2007) A New Agriculture Policy for the 21st Century: 2008 (May 2008) Food, Agriculture and Rural Areas Basic Plan (Mar. 2010) Three laws concerning rice (Rice Flour and Feed Rice Act, Rice Traceability Act, Revised Food Act) are enacted (Apr. 2009) Revision of the JAS Act (May 2009) Penalties for retailers who falsify the origin of food Revision of the Food Recycling Act (Dec. 2007) Revision of the Container and Packaging Recycling Act (Apr. 2008) Liberalization of wholesale fees (Apr. 2009) EPA with Chile became effective (Sep. 2007) EPA with Thailand became effective (Nov. 2007) Informal WTO Ministerial Meeting (Jul. 2008) EPA became effective with Indonesia and Brunei (Jul. 2008) EPA became effective with ASEAN and the Philippines (Dec. 2008) WTO 7 th Ministerial Conference (Nov. 2009) EPA with Switzerland became effective (Sep. 2009) EPA with Vietnam became effective (Oct. 2009) Program of Direct Payment for Paddy and Upland Field Farming (2007) Farmland reform plan (Dec. 2008) Law to revise part of the Farmland Act (Dec. 2009) Emergency measures concerning rice (Oct. 2007) Vitalization of Rural Areas Act (Aug. 2007) Measures to Conserve and Improve Land, Water and the Environment (2007 and beyond) Act to Promote Cooperation Between Agriculture, Manufacturing and Commerce (Jul. 2008) 57/ Rural Areas Exchange Project for Children (2008 and beyond) 9

6 However, the dire situation of food, agriculture and rural areas persists, and the actual achievement fell short of the targets set out in the previous Basic Plan. In terms of the food self-sufficiency ratio on a supplied calorie basis, As dietary habits changed significantly and consumption of rice, a staple which could be entirely supplied domestically, declines, people were consuming more livestock products that required corn and other feed grains difficult to produce domestically as well as fat products from oilseeds such as soy and rapeseed. The population of core persons mainly engaged in farming and the area of land that could be cultivated was falling, mainly due to decreases in agricultural income and the price of agricultural products. This had resulted in impairments in the capability to supply food domestically. Consequently, although the previous Basic Plan set the food self-sufficiency ratio target of 45% to be achieved by FY2015, the rate has hovered around 40% for the past few years and the food self-sufficiency ratio as measured by agricultural output was also falling. Figure 5: Changes in indices related to food, agriculture and rural areas (Target year of the previous Basic Plan) The food selfsufficiency ratio The food selfsufficiency ratio The feed selfsufficiency ratio (supplied calorie basis) % (production output basis) % % Net supplied food (per person per year) Rice kg Wheat kg Vegetables kg Fruit kg Food consumption / Dietary habits Meat kg Milk and dairy products kg Fish and shellfish kg Fats kg Ratio of fat (supplied calorie basis) % Rate of people Males in their twenties % forgoing breakfast Females in their twenties % Number of calls to the food labeling hotline 16,124 26,799 Consumer price index for food (rate of increase from previous year) % Output of the food manufacturing industry trillion yen References: Food Balance Sheet (Ministry of Agriculture, Forestry and Fisheries); National Health and Nutrition Survey 2005 & 2008, National Nutrition Survey, 1975 to 2000 (Ministry of Health, Labor and Welfare); Consumer Price Index (from data surveyed by the Ministry of Agriculture, Forestry and Fisheries and published by the Ministry of Internal Affairs and Communications); Census of Manufacturers (Ministry of Economy, Trade and Industry) Notes: 1) Annual values were used for the food self-sufficiency ratio, the feed self-sufficiency ratio, net supplied food and ratio of fat. 2) denotes values for ) The target for 2015 was taken from the Food, Agriculture and Rural Areas Basic Plan issued in March

7 Agricultural output reached a peak in FY1990 and then declined with rice showing the greatest level of decrease. Agricultural income (net agricultural production) in FY2007 was half of that in FY1990. The number of commercial farm households has been falling over a long period of time and reached 1.7 million in Business farm households fell to 350 thousand during the same period. The number of core persons mainly engaged in farming has dwindled to 1.91 million, and 60% of them are age 65 or older. Among the 60 to 80 thousand new farmers who have entered the industry in the past decade, only about 12 to 15 thousand of them are age 39 or younger. The total area of cultivated land reached a peak in 1961 and then declined over a long period of time. It fell to 4.61 million hectares in Meanwhile, the total area of abandoned farmland has been rising while the utilization rate of cultivated land has been decreasing. As young people head for the cities, rural areas grow older and shrinking. The ratio of the total population of all rural areas in the entire general population hit 34% in 2005 and at the same time the percentage of individuals living in rural areas who are age 65 and older rose to 24%. Opportunities for side jobs are dwindling with the economic downturn in recent years, further exacerbating the plight of farmers. (continued) Production output Farming households Agricultural labor force Farmland Rural communities (Reference) Agricultural production output, trillion yen trillion yen Net agricultural production trillion yen (Target date for the previous Basic Plan) Agricultural price index Agricultural production material price index Commercial farm households 10, Business farm households 10, Number of core persons mainly engaged in farming 10, (Mean age) (percentage over 65 years old) % Number of new farmers 10, (number of new farmers age 39 or younger) 10, Number of certified farmers 10, Community-based farm cooperatives 10, Agricultural production legal persons 10, Hectares of cultivated land 10, Hectares of abandoned farmland 10, Utilization rate of cultivated land % Hectares of total planted area 10, Hectares of cultivated land under management per farm household ha Total population of all rural areas 10,000 5,101 4,812 4,770 4,546 4,432 4,412 4,344 (ration of the national population) % (percentage over 65 years old) % Number of rural communities 10, (13.9) Agriculture related budget trillion yen Ratio of total agricultural production in the 1 % GDP 0.9 References: Economic Calculation on Agricultural and Food-related Industries, Commodity Price Statistics in Agriculture, Census of Agriculture and Forestry, Survey on the Dynamics of Agricultural Structure, Statistics of Cultivated and Planted Area (Ministry of Agriculture, Forestry and Fisheries); National Census (from data surveyed by the Ministry of Agriculture, Forestry and Fisheries and published by the Ministry of Internal Affairs and Communications); National Economic Calculation (Cabinet Office). Notes: 1) Annual values were used for agricultural production output, net agricultural production, agriculture related budget and the ratio of total agricultural production in the GDP. 2) 1 is for 2007, 2 is for 2008 and 3 is for ) The number of new farmers for 2008 includes employed farmers and is thus irrelevant. 4) The value for hectares of cultivated land under management per farm household uses data from commercial farm households since ) The total population of all rural areas for 1965 does not include Okinawa. 6) The conditions used to calculate the number of rural area has changed since Therefore, values after 2005 for this category are irrelevant. 7) The target for 2015 was taken from the Food, Agriculture and Rural Areas Basic Plan issued in March

8 A New Food, Agriculture and Rural Areas Basic Plan Failure to deal with the serious conditions in agriculture and rural areas hampers efforts to improve the food self-sufficiency ratio and exercise multifunctional roles, and will inevitably be detrimental to the entire public. Consequently, the Basic Plan was developed in March 2010 to bring major change to agriculture policy and restructure a set of policies that can swiftly rejuvenate food and communities. The new Basic Plan aims to envision a better future for the Japanese public by encouraging creativity in principle farmers and mining the hidden potential of agriculture and rural areas to the greatest extent possible. This new Plan sets 50% as the target for the food self-sufficiency ratio on a supplied calorie basis (70% on a production output basis) to be achieved by FY2020. It also details measures for achieving the stable supply of food as exemplified by the expansion of various efforts in the food chain including Good Agricultural Practices (GAP), Hazard Analysis and Critical Control Points (HACCP) and traceability. It adopts measures for the sustainable development of agriculture such as direct payment of income support. Furthermore, it defines measures to support rural areas such as the collaboration of primary, secondary and tertiary industries in agriculture and rural areas. Major points of the new Food, Agriculture and Rural areas Basic Plan Regarding the stable supply of food as the government s most fundamental responsibility Recognizing food, agriculture and rural areas policy as a national strategy Stipulating the creation of a society in which the entire public supports agriculture and rural areas Inspect past agriculture policies to determine the direction of the new policy Recognizing that profitability is deteriorating and agricultural reproduction is becoming increasingly difficult, transitioning to policies that achieve management practices that enable reproduction. Transitioning from policies that could not adequately respond to changes in demand as represented by simply suppressing production of goods for which demand is falling, to policies that respond to diverse purposes and demand and encourage efforts to expand production and increase added value. Transitioning from policies emphasizing certain types of farmers to policies that foster and secure motivated principle farmers of diverse backgrounds. Recognizing that past measures to secure farmland did not achieve adequate results, establishing policies that secure quality farmland and realize effective utilization. Recognizing that regional vitality is dwindling, consolidating measures to rejuvenate and energize rural areas. Recognizing that the current situation requires efforts to increase the food self-sufficiency ratio and strictly manage the food chain, transitioning to a production system that satisfies the standards of consumers in terms of quality, safety and security, and establishing policies that realize a dietary lifestyle in which people feel safe and secure. [Achieving the food self-sufficiency ratio] The Plan stipulates that the food self-sufficiency ratio should reach 50% by FY2020 on a supplied calorie basis. [Gaining food safety and consumer confidence] Under the basic philosophy epitomized by the saying, Prevention is better than cure, the Plan attempts to improve food safety and expand efforts in the food chain such as traceability, GAP and HACCP. It also considers the creation of a Food Safety Agency. [Securing and fostering farming businesses] The Plan attempts to provide an environment where principle farmers can work to upgrade their business and continue farming long into the future through the development of the program for direct payment of income support. It also supports collaboration of primary, secondary and tertiary industries for agriculture and rural areas to secure and foster competitive agricultural businesses. [Collaboration of primary, secondary and tertiary industries for agriculture and rural areas] The plan promotes collaboration of primary, secondary and tertiary industries for agriculture and f rural areas by introducing industries to resources such as biomass and agricultural and marine products for the purpose of creating local enterprises. The Plan suggests that related agencies should work together to produce a vision for revitalizing rural areas in order to conceptualize the future state of the community, maintain the traditional functions of the region and conserve local resources and environments. For more information, please see ANNEX on P82. 12

9 Special Topic: A Major Transition to a New Agriculture Policy/Topic: Implementation of the Pilot Program for Direct Payment of Income Support Topic: Implementation of the pilot program for direct payment of income support The program for direct payment of income support intends to achieve swift recovery of agriculture as a sustainable national industry, improve the food self-sufficiency ratio and maintain multifunctional roles by providing principle farmers with an environment in which they can confidently develop their agricultural businesses. The pilot program for direct payment of income support was launched in FY2010 in part because of the need to reinforce paddy field farming to improve the food self-sufficiency ratio. In other words, the pilot program facilitates utilizing paddy fields for the production of produce that are important for the food self-sufficiency ratio such as wheat, soybeans as well as rice for flour and feed (enterprise to improve the food self-sufficiency ratio through effective utilization of paddy fields), with aid to create an environment that facilitates efforts towards the food selfsufficiency ratio (pilot enterprise for direct payment of income support for rice). The program also transforms past policies focusing on adjustment of rice production, which brought about a sense of stagnation to agriculture. The program will be implemented full-scale as following inspection of the results of the pilot program. The ratio of direct payments from the government in agricultural income is 23% in Japan as opposed to 78% in the EU. In other words, implementation of the program will increase the ratio of direct payments in agricultural income, and is thus a significant transformation of agriculture policy. Figure 1: Structure of the enterprise to improve the food self-sufficiency ratio through effective utilization of paddy fields Unit price for subsidies Strategic produce Produce Wheat, soybeans, feed produce Unit price for direct payment of income support for paddy fields (national average) Rice for flour, feed and biofuels; rice plants for WCS Buckwheat, rapeseed, rice for processing Unit price per 10 acres 35,000 yen Wheat (paddies): 40,000 yen Soybeans (paddies): 27,000 yen 80,000 yen 20,000 yen Other produce Produce and unit prices are set by each prefecture Double cropping (combination of rice for staple and a strategic produce, or two strategic produces) 15,000 yen per 10 a Eligibility In order to make the program more accessible to farmers who did not participate in supply and demand adjustment, eligibility does not depend on achievement of the rice production quantity target. (The ratio of direct government payments in agricultural income in Japan and the EU) The ratio of direct payments from the government in agricultural income is 23% in Japan as opposed to 78% in the EU. These payments support agriculture with multifunctional roles. The program will increase the ratio of direct payments in agricultural income, and thus can be considered to be a significant transformation of agriculture policy. Figure 2: Structure of the pilot enterprise for direct payment of income support for rice Unit price for subsidies Expenses required for standard production (the average of five years from the past seven years) Fixed price component Variable price component Standard retail price (average of the past three years) 15,000 yen per 10 a (nationwide standard) If the retail price for a given harvest year is less that the standard retail price (the average price of the past three years), then the difference is used as a basis for calculations for the unit price for subsidies of the variable component. Variable price component No variable price component Retail price for the given harvest year Retail price for the given harvest year Fixed price component (15,000 yen per 10 a) Eligibility Commercial farm households and farming cooperatives that performed production based on the rice production quantity target (albeit, members of mutual aid association for rice crops or farmers whose land area is less than the requirement necessary for enrollment must have a history of sales and delivery activity in 2009). (The land area subject to eligibility is the area planted with rice for staple food minus a standard 10 a for in-house consumption or as a gift to a beneficiary.) Figure 3: Direct payments to farmers in Japan and the EU (Units: hundred million yen, %) Japan EU (25 countries) Direct payments 6,943 84,598 Agricultural income 30, ,900 Ration of direct payments in agricultural income Source: Ministry of Agriculture, Forestry and Fisheries Notes: Direct payments were calculated using notification to the WTO by each country. Values for agricultural payments were taken from the Statistical Tables of Productive Agricultural Income published by the Ministry of Agriculture, Forestry and Fisheries and Entrepreneurial Income published by EUROSTAT. 13