For decades, Japan pursuedthe goal of food self-sufficiency by using a number of commodity programsincluding producer quotas, income stabilization policies, deficiency payments,the rice diversion program, hazard insurance subsidies, and stockholdingpolicies. Imports were restricted through tariffs and non-tariff barriers toprotect the domestic production. In 2005, the Ministry of Agriculture,Forestry, and Fisheries (MAFF) announced a new farm program that replacescommodity-based farm payments with targeted direct payments.
Corn and Sorghum
Š Corn and sorghumproduction is negligible in Japan.
Š Japan has norestriction on cotton imports.
Š Payments are made tofarmers to shift land from rice to wheat and soybean production. The government annually forecastsdomestic rice consumption, estimates the land needed to produce that quantity,and allocates the desired reductions. Producers who conform to the acreage reductions are eligible for subsidypayments. Japan has announced plans to phase out production controls by 2008.
Š There is no marketprice floor. Instead, incomesupport is a direct payment based on the difference between a “standard price”(based on the previous 7 years) and the market price. The cost of this program in 2002 was about $1.03 billion.
Š Japan uses regulationson allowable pesticide and veterinary drug residues in rice and has a TRQ onrice.
Š Soybeans are one of the“targeted farm products” under MAFF. Soybean producers receive a subsidy based on the difference between thecost of domestic production and the farm gate sales price. The subsidy equalsroughly 30,200 yen/10 ares ($1,009/ac) or 8,840 yen/60kg ($37/bu).
Š The U.S. share ofJapan’s soybean imports is about 76%.
Š There is no tariff onsoybean imports.
Š In Japan’s pricesupport system, a guaranteed price for domestic beet and cane producers is seteach year. The government then sets a price at which it will buy raw sugar fromrefiners that will allow refiners to pay the guaranteed price for beets and cane,then purchases sugar at the set price, resells the sugar to the refiners at alower price, roughly equivalent to the import price.
Š In 2007, the sugar beetsupport program is scheduled to shift from a price support to a direct paymentsystem.
Š Farmers who cultivatemore than a specified acreage of wheat receive a direct payment, currentlyapproximately $1,377/ac.
Š Japan has a TRQ forwheat. TRQ quantity is 5.74 MMT(211 million bu) with an in-quota tariff rate of 9.5% and an out-of-quota rateof 488.33%.
Š MAFF operates as asingle-desk, state trader of wheat.