The Japanese government may soon end its four-decade old policy of protecting its rice farmers through tight controls on industry output. The proposal which is part of an agriculture revitalization strategy which should be completed by the end of the month, would end all rice subsidies to all farmers and eliminate production rationing within five years. This eliminating of subsidies and rationing will likely cause a drop in the rice price and consolidation within the industry eliminating smaller, less-efficient operations while allowing the larger one to increase output to compete with the influx of cheaper imports resulting from the country’s membership in the Trans Pacific Partnership. The current price support system has been in place since 1970 with the goal of maintaining the country’s self-sufficiency. However it removed incentives to increase productivity and caused just the opposite. Domestic rice demand has fallen 40% between 1970 and 2012 leaving abandoned farms and a more entrenched quota system.
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