Trade policy review report by the secretariat

5  TRADE POLICIES IN SELECTED SECTORS

5.1  Agriculture

1.1.  In 2012, agriculture contributed around 1.02% to GDP, which is about the same as in 2004 (Table 4.1), and 3.6% of total employment in 2013. Although agriculture is a relatively small part of the economy and employment it is important for historical and cultural reasons and, according to the authorities, for food security.

Table 4.32 Agriculture in the economy, 2004-12

	2004	2005	2006	2007	2008	2009	2010	2011	2012
GDP total (¥ billion)	503,725	503,903	506,687	512,975	501,209	471,139	482,384	471,311	473,784
GDP agriculture (¥ billion)	5,600	5,134	4,991	4,834	4,743	4,522	4,769	4,544	4,835
Employment total (million persons)	63.29	63.56	63.89	64.27	64.09	63.14	62.98	62.89	62.70
Employment agriculture (million persons)	2.64	2.54	2.50	2.52	2.47	2.44	2.37	2.31	2.24

Source: Statistical Year Books and authorities.

1.2.  As a mountainous island nation, relatively little land in Japan is suitable for agriculture: out of a total land area of approximately 377,900 km², 12% is cultivated and a further 0.9% is grassland.¹³³ The area under cultivation has been declining for some years as land has been withdrawn from production, principally through "dilapidation artificially"¹³⁴ which the authorities defined as "the land use transformation that cultivated land has been converted to other uses including construction work and abandonment."

1.3.  There have been several changes to the legislation on land ownership since the major reforms of the late 1940s and the provisions of the Land Act of 1952 limiting land holdings to 3 ha were removed in 1970. However, farms remain small and holdings are often fragmented: in 2010 there were 2.5 million farm households with an average size of 1.3 ha often in several different parcels. Of the 2.5 million farm households, 1.6 million were classified as commercial farm households (defined as farms of at least 0.3 ha or annual sales of at least ¥500,000). Commercial farms may then be classified as: part-time and full-time; or as business, semi-business, or side business. Even commercial farmers farms are usually small in size, although in Hokkaido the majority of the commercial farms are over 10 ha (Table 4.2).¹³⁵

1.4.  Several factors account for the small fragmented structure of farms and the relatively low degree of consolidation. The land reforms of the 1940s and the irrigation patterns and labour-intensive nature of rice farming meant that farms were quite productive during that period. However, mechanisation has greatly reduced labour requirements allowing part-time farming while many farmers are reluctant to rent or sell land for farming for social and cultural reasons as well as the opportunity to make large capital gains should the land be rezoned for construction. A high degree of government support and protection for farming has also meant that small-scale farming remains profitable, particularly when supplemented by non-farm incomes. However, the result has been a steadily aging farming population and an inefficient agricultural sector.^{136, 137}

1.5.  Gross output of agricultural products has been quite stable over the past ten years as, in general, domestic prices and national production have changed very little. Rice remains the most important single product but its production value is less than that of vegetables or livestock (Table 4.3). Rice accounts for about a quarter of gross output, with nearly half of commercial farm households specialized in rice production and well over half of cultivated land under rice production.

Table 4.33 Farm households and average farm size, 2010-13

		2010	2011	2012	2013
Farm households	'000	2,538	..	..	..
Of which
Commercial farm households	'000	1,631	1,561	1,504	1,455
Of which
Full-time	'000	451	439	423	415
Part-time	'000	1,180	1,122	1,081	1,040
Commercial farm households	'000	1,631	1,561	1,504	1,455
Of which
Business farms	'000	360	..	..	..
Semi-business	'000	389	..	..	..
Side-business	'000	883	..	..	..
Ha cultivated land/household
Commercial farm households	Ha	1.96	2.02	2.07	2.12
Business farm household	Ha	4.88	5.05	5.18	5.38

.. Not available.

Note: Definitions:

Farm household: operates farming with 10 ares or more of cultivated land or sales of agricultural products of ¥150,000 and over in the previous year.

Commercial farm household: cultivated land under management of 30 ares and over or with annual sales of agricultural products amounting to ¥500,000 and over in the previous year.

Business farm household: commercial farm household where the percentage of agricultural income is more than 50% of the household income, with one and more family members engaged in own farming for 60 days and longer, and under 65 years old.

Semi-business farm household: commercial farm household non-agricultural income is the majority of the household's income, one or more family members engaged in own farming for 60 days and longer, and under 65 years old.

Side-business farm household: farm household with no member engaged in own farming for more than 60 days and under 65 years old.

Full-time farm household: no household member engaged in jobs other than farming.

Source: MAFF (2014), The 88^th Statistical Yearbook of Ministry of Agriculture, Forestry and Fisheries (2012-2013). Viewed at: http://www.maff.go.jp/e/tokei/kikaku/nenji_e/88nenji/index.html#nse001 [December 2014].

Table 4.34 Total agricultural production and production of selected products, 2003-12

	Gross output	Crops	Rice		Vegetables		Wheat		Soya beans
	(¥ bn)		(¥ bn)	('000 tonnes)	(¥ bn)	('000 tonnes)	(¥ bn)	('000 tonnes)	(¥ bn)	('000 tonnes)
2003	8,857	6,460	2,342	7,792	2,097	15.169	..	856	..	232
2004	8,714	6,183	1,991	8,730	2,143	14,540	..	860	..	163
2005	8,512	5,940	1,947	9,074	2,033	14,547	..	875	..	225
2006	8,332	5,818	1,815	8,556	2,051	14,324	..	837	..	229
2007	8,259	5,720	1,790	8,714	2,089	14,746	..	910	..	227
2008	8,466	5,820	1,901	8,823	2,111	14,622	..	881	..	262
2009	8,190	5,590	1,795	8,474	2,085	14,072	..	674	..	230
2010	8,121	5,513	1,552	8,483	2,249	13,365	..	571	..	223
2011	8,246	5,639	1,850	8,402	2,134	13,513	..	746	..	219
2012	8,525	5,879	2,029	8,523	2,190	13,799	..	..	..	..
		Livestock	Beef cattle	Beef	Milk		Pigs	Pig meat	Hen eggs
		(¥ bn)	(¥ bn)	('000 tonnes)	(¥ bn)	('000 tonnes)	(¥ bn)	('000 tonnes)	(¥ bn)	('000 tonnes)
2003		2,329	400	495	694	8,400	467	1,260	345	2,529
2004		2,458	446	512	688	8,329	519	1,272	387	2,491
2005		2,506	473	498	676	8,285	499	1,245	435	2,481
2006		2,453	478	496	649	8,138	498	1,247	401	2,488
2007		2,479	485	503	636	8,007	523	1,251	402	2,583
2008		2,585	459	519	660	7,982	579	1,249	450	2,554
2009		2,547	482	516	703	7,910	512	1,310	421	2,508
2010		2,553	464	514	675	7,720	529	1,292	442	2,515
2011		2,551	463	500	658	7,474	536	1,267	451	2,483
2012		2,588	503	518	687	7,630	537	1,297	420	2,507

.. Not available.

Source: Statistical Year Books and authorities.

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