Japan Inc. Steps on Lobby Turf as Abe Reforms Farming
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Japan’s ruling party wants to increase corporate participation in agriculture to boost the competitiveness of the nation’s farms as pressure increases to cut import tariffs.
Prime Minister Shinzo Abe’s Liberal Democratic Party is considering allowing non-food companies to own almost 50 percent stakes in farming entities from the current 25 percent, according to Hiroshi Moriyama, the head of the party’s farm-reform committee. The LDP also wants to streamline approvals of land sales by individuals to farming corporations.
The rule changes would increase the number of agricultural ventures between farmers and companies and reduce the power of JA-Zenchu, the nation’s largest farm lobby and an opponent of the U.S.-led Trans-Pacific Partnership trade plan. The government will review the lobby’s role as it seeks to bolster the independence of local farm cooperatives, Moriyama said in a speech in Tokyo on June 12.
“With the government eager to expand free-trade agreements to accelerate economic growth, partnerships with companies are more important to the survival of farmers than reliance on the farm lobby,” said Takaki Shigemoto, an analyst at JSC Corp., a commodities researcher in Tokyo. “They are moving in the right direction to reform the agricultural sector.”
Abe’s cabinet will decide on a growth strategy including agricultural reform plans by the end of this month, based on recommendations from his advisers and the ruling party, according to Moriyama. Akira Banzai, the chairman of Zenchu, said in a statement on June 10 that the group will come up with its own reform plans.
Doubling Exports
Abe set a goal of more than doubling food exports to 1 trillion yen ($9.8 billion) by 2020 as part of an economic growth strategy that began with unprecedented monetary easing and fiscal stimulus. Japan aims to boost beef exports five-fold from 2012 to 25 billion yen by 2020, exports of rice and rice-based products to 60 billion yen from 13 billion yen, and fruits and vegetable exports to 25 billion yen from 8 billion yen.
The number of farming corporations rose 15 percent to 13,561 in the three years after rules were relaxed in December 2009 allowing food companies to take stakes of almost 50 percent in farming ventures and other firms to own as much as 25 percent, from less than 10 percent previously, according to data from the Agriculture Ministry.
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