The OECD defines agricultural support as “the annual monetary value of gross transfers to agriculture from consumers and taxpayers, arising from governments’ policies that support agriculture, regardless of their objectives and their economic impacts.” The PSE, then, “represents policy transfers to agricultural producers…and is composed of market price support, budgetary payments and the cost of revenue foregone by the government and other economic agents” . As the data below reveal, the paradox of farmers continuing to receive robust economic aid despite limited employment and negligible contributions to the national economy holds true beyond Europe.Farmers in Japan have enjoyed great success in imposing their policy preferences due in part to their homogeneity and highly organized representative associations. Small farmers dominate the agricultural sector, which makes it easy for farmer associations to promulgate a single, coherent message. In addition, a strong union that is well organized nationally, regionally, and locally, represents Japanese farmers. Finally, unlike Europe and the United States, there is little if any pressure from sectoral organizations. The main farming organization in Japan is Japan Agriculture, referred to as JA or Nōkyō. The JA is a three-tiered organization, with national, prefectural, and local-level cooperative groups. The JA commands near universal membership of the Japanese farming community in large part due to the services and benefits it offers. It claims to have nearly 10 million members . Its main businesses are banking, insurance, agricultural retail and wholesaling, and supply of farming materials. In addition to these benefits and services, which are not uncommon among agricultural cooperatives,10 liter drainage pot the JA’s scope of business includes real estate, travel agencies, supermarkets, and even funeral homes .
Essentially, “within the villages, the JA is a one-stop service. Farmers and everyone else in the village use JA services” . An LDP politician explained that the JA has far-reaching influence and is a cornerstone of rural society, with even non-farmers depending on the JA for services, “No other organizations in Japan are like the JA with so much local organization and influence. The JA is crucial in local community because of the infrastructure it provides. As a result, even non-farmers in rural areas need and depend upon the JA” . Ultimately, this wide range of services means that the JA can forge a relationship with farmers and the broader rural community that extends beyond just agriculture. Indeed, the JA can assist rural communities in all their needs, even those that come after death. Along with high membership levels, much of the JA’s power derives from the fact that it has been in an official corporatist relationship with the state since it was formally created via legislation in 1947. This close relationship with the state has been quite beneficial for the JA, with the government at times heavily regulating and protecting the JA’s banking and insurance businesses, even going so far as to bail out JA banking multiple times, both after 1980s economic bubble burst and again in 2008. For example, Norin-Chukin a major agricultural cooperative bank had invested extensively in real estate during the 1980s boom. When the bubble burst and the real estate market collapsed, JA affiliated banks, Norin-Chukin chief among them, sustained heavy losses. As a result of political lobbying, the JA was able to reach an agreement where it was only responsible for ¥530 billion out of a total of ¥5.5 trillion in losses . The state has also granted the JA exceptional status in antitrust law, which has afforded the JA monopolies on the supply of agricultural inputs to farmers . Further exceptions are made for the insurance wing of the JA, “which is allowed to sell multiple kinds of insurance whereas other firms are traditionally limited to providing only one type of insurance” .
As these examples suggest, farmers and the JA have been quite successful in their efforts to influence agricultural policy making. An important area of success for Japanese farmers has been in shaping Japan’s trade negotiations, pressing for protectionism even when other groups seek greater trade liberalization. In these negotiations, Japanese agriculture is able to impose its preferences despite pressure from the Japanese business lobby, Keidanren, which stands to gain far more from liberalization than agriculture would ever lose. These victories for Japanese farmers have come at both the GATT/WTO and in Japan’s bilateral trade agreements. The GATT Uruguay Round sought to reduce if not eliminate agricultural subsidies and remove tariffs and trade barriers in an effort to liberalize agricultural trade. In these negotiations, Japan’s position was largely defensive and was grounded in a desire to make as few concessions as possible. Its objectives were shaped primarily by the special position of rice producers and also by the overall high level of protection of agriculture. The LDP, whose political position was vulnerable at the time, promised farmers that no amount of foreign rice would be allowed to enter the domestic market . Fundamental incompatibility between GATT objectives and the policy preferences of major negotiating parties, including Japan and the European Community, resulted in the round grinding to a halt. In the end, although reducing tariffs was a major goal of the negotiations, a modification was negotiated specifically for Japan to allow it to delay tariffication of rice in exchange for accepting more imports of agricultural products, but only in sectors that were unimportant to Japanese agriculture such as dairy production. In addition, farmer subsidies were protected, despite the GATT UR goals of eliminating them. By the end of the GATT UR negotiations, Japanese farmers walked away with an agreement that protected their core commodities and allowed them to largely avoid the removal of tariffs for key products, while also maintaining a system of income support for farmers. In September of 2003, Japan was in the final stages of a free trade agreement with Mexico, which had been delayed by agricultural opposition.
Frustrated with the delays, Prime Minister Junichiro Koizumi ordered his trade negotiators to “get it done” . In the end, a tripartite coalition of agricultural representatives was able to extract considerable concessions for agriculture that finally allowed the agreement to move forward. The concessions included a reduction in the level of tariffs that had to be removed and special protection arrangements for “politically sensitive” commodities including pork, beef, chicken, oranges, and orange juice . Although this free trade agreement was concluded with Mexico, agriculture continued to block any progress on other free trade agreements Japanese officials desired at the time with the Philippines, Thailand, and South Korea. One major reason Japanese farmers have been so successful in pushing their policy preferences and forestalling liberalizing trade agreements is that the main groups in other countries that traditionally challenge farmers by supporting liberalization,25 liter pot namely consumers, business, and the food industry, are either unwilling or unable to challenge the JA’s preference for protection . Moreover, while farmers are united in their opposition to agricultural liberalization their opponents, most notably consumers and the food industry, are internally divided. Consumer organizations, for example, are dominated by concerns over food quality and prefer to restrict access to the Japanese market to ensure that the preponderance of available products are those of Japanese origin, in which they have a high degree of trust. Because of this strong preference among consumers for food of Japanese origin, many in the food processing and distribution industry are reluctant to push for agricultural liberalization. Their fear is that demand for their products will decline if they are made with or include the imported agricultural goods. The result is that, despite their small share of the population, farmers are able to extract new policies, or preserve existing policies, that benefit a small share of the population and inconvenience a much greater share of the population. While these group preferences are indicative of the peculiarities of the Japanese case, the broader explanation of farmer influence and power tracks the European story. Japanese farmers, like those in Europe, have powerful and well-coordinated organizations. These organizations operate from the national level all the way down to the local level, giving farmers access to and influence over key actors at all levels of decision making. Tight control over members and impressive capacity for coordination allows Japanese farmer organizations to influence not only politicians concerned with re-election but also key actors, like business, that might challenge farmer preferences. Boycotts are one common strategy employed by farmer organizations in Japan to shape policy by punishing other interests that challenge agriculture. For example, in the mid-1980s, Nōkyō led a boycott against Mitsubishi Kōgyō Cement because a company executive belonged to a Nikkeiren committee that pushed for agricultural policy reform. Since that incident, Nikkeiren has struggled to find executives willing to sit on the committee . Farmers also executed a successful boycott of Sony, Daiei , and the food-maker Ajinomoto because their executives had pushed for agricultural policy reform as part of a Keidanren committee. In these cases, the boycotts were ended only after the executives from the offending companies apologized to farmers and quit the committee . So, farmer organizational power in Europe is often manifested through street protests, Japanese farmers often direct their organizational influence toward hurting the economic interests of their main policy opponents.
The JA’s organizational strength allows Japanese farmers to exert significant electoral influence, rewarding politicians who commit to protecting and advancing preferred farmer policies, and punishing those who do not. As a Japanese official explained, “If JA doesn’t like a candidate, they will do a smear campaign. Farmers are maybe not strong enough to make someone win, but they are strong enough to make sure someone loses” . The farmers have long been a staunch ally of the Liberal Democratic Party , which governed Japan, uninterrupted from 1955 to 1993. Since its formation in 1955, the LDP has only been out of power from 1993 to 1994 and 2009 to 2012. The JA’s ability to coordinate the voting of its membership played an important role of the LDP’s defeat in 2009 and its return to power in 2012. In the run up to the 2009 election, many farmers threw their support behind the Democratic Party of Japan as opposed to their traditional ally, the LDP. This shift appears to have been prompted more by the DPJ’s aggressive campaign to win the farmers over than farmer anger with a specific LDP policy. In an effort to win farmers away from the LDP, the DJP announced a plan to transition agricultural policy from price supports to a system of direct income compensation. The policy was an extension of one offered in the 2007 Upper House elections that proved to be very successful in winning rural votes away from the LDP. These policy promises in 2009 lured numerous JA prefectural offices into tempering their commitments to the LDP, saying that decisions on whom to support would be made on a district-by-district basis, or, in the most extreme cases, that this election would be a “free vote” and no official candidate would be endorsed. The DPJ, thanks to their plan for supporting farmer incomes, won the support of the agricultural community and thus the election. After taking power, the DPJ adopted their new farmer income scheme, which provided a direct income subsidy for all commercial farm households, regardless of size. The scheme was also designed to compensate farmers for times when production costs exceeded sale prices. Under the policy, farmer incomes increased for the first time since 2003. Despite these positive developments, the LDP took back farmer support and won the next elections in 2012. A central promise of the LDP was to increase public spending on the farm sector, which had been cut by the DPJ to pay for the new income support program. Under the DPJ, the budget of the Ministry of Agriculture, Forestry, and Fisheries had declined . In the run up to the 2012 elections, the LDP committed to reversing this decline. In addition, its agricultural policy platform promised to replace the “individual farm household income compensation scheme with enhanced direct payments to farmers for the multifaceted functions of agriculture” . The way the direct income payment was handled by the DPJ also came under criticism: some viewed it as a way to separate farmers from the powerful farmer organizations by weakening the dependent relationship between the two.