Outlook for Japanese Food SecurityOutlook for Japanese Food Security and Trade Policies

Yasuo Watanabe

17 May, 2012

Deputy Director-General of Policy Research Institute, Ministry of

0

Research Institute, Ministry of Agriculture, Forestry and Fisheries,

Japan

I. Economy, food security and food and agricultural tsector

1

Change in Food Self-sufficiency Ratio

7375

（％）

％73%75

6565

55

Food self-sufficiency target (50% in FY2020)55

45

Food self-sufficiency

(39% in FY2010)45

3535

2

35昭和40 45 50 55 60 平成２ ７ 10 22 32

(year)1965 198019751970 1995 2000 2010 202019901985

Note: on a calorie basis

35

Aging Population in Japanese Agriculture～Agriculture workers decreases, but their average age increases～g g g

5.00(million people)

(age)66

65.8 yrs old

4.00

5.00

Populati

( g )4.14

million

66

64

Aver

3.00

ion of agri(bar g

2.61 million 62

rage age(l

2.00

icultural wraph)

59.1 yrs old

60

line graph)

0.00

1.00

workers

58

3

0.001995 2000 2005 2010

(Source) Ministry of Agriculture, Forestry and Fisheries “Census of Agriculture and Forestry”

(year)

Decrease in Area of Cultivated Land and Increase in Abandoned Farmland

6 50 0 40(million ha)(million ha)

148万ｈａ減少Decrease of

0.40 million

ha

Area of

Area o

6.00

6.506.07 million

ha

0.40148万ｈａ減少福島県や長野県と

ほぼ同じ面積

Decrease of 1.48 million ha

f cultivated

of abandon5.00

5.50

4.59 millionha

0.30

d land (bar

ned crops (l4.00

4.50

0 12

ha0.20

graph)

line graph)

3.00

3.50

0.12 million

ha 0.10

4Information: Ministry of Agriculture, Forestry and Fisheries “Statistics on Cultivated Land and Planted Area” and “Census of Agriculture and Forestry”

1960 1970 1980 1990 1995 2000 2005 2010(year)

Rapid Decline of Agricultural Production and Income

Agricultural ProductionAgricultural Production13.4

(trillion yen)

126.1

8

46.1

Reduced by half in about 20 years

01990 1995 2000 2005 2008 (year)

3.0

A i l l IA i l l I

5(Source) Ministry of Agriculture, Forestry and Fisheries “Economic Calculation on Agricultural and Food-related Industries”

Agricultural IncomeAgricultural Income

Agricultural Product Import and Export of Major Countries (2008)

302

27

669

567

Chi

Japan

(Imports) (Exports)

539

(Net imports)

30

250

302

189

584

669

South Korea

U.K.

China 367

334

160

173

708

91

830

India

Germany 121

▲ 82

1 183

241

824

84

U.S.

Australia ▲ 157

▲ 358

France 680532 ▲ 148

554

1,183

79

824

Brazil

U.S. 358

▲ 474

E.U. 1,0891,274 185

6Source: Prepared by MAFF based on FAO “FAOSTAT”Note: Imports and exports of U.K. Germany and France include those within the EU.

1,000 500 0 500 1,000 1,500100 million dollars

II. Agricultural policies, productivity, key t i t / t iticonstraints/opportunities

7

Conventional agricultural policies were drastically changed and brand-new perspectives

New Basic Plan for Food, Agriculture and Rural Areas

P i t f th N B i Pl f F d A i lt d R l A

g p y g p pwere incorporated in the New Basic Plan for Food, Agriculture and Rural Areas endorsed by the Cabinet in March 2010.

Introduction of the income Sustainable

Points of the New Basic Plan for Food, Agriculture and Rural Areas(Approved by the Cabinet on 30 March 2010)

compensation system for individual farming households

development of agriculture

i i i

Raising food self-sufficiency to 50%Target of food self-sufficiency

Expansion into secondary and tertiary business based on agriculture

Promotion of rural areas

8

Fully addressing management issues of food supply process

Securing of stable food supply

B i Pl f F d A i lt d R l A

Further Policy Reforms

Basic Plan for Food, Agriculture and Rural Areas

New Principle on EPA/FTA The Great East

JJapan Earthquake(Mar 2011)Basic Policy on Comprehensive

Economic Partnerships (November 2010)

Further policy reform for the Revitalisation of

Economic Partnerships (November 2010)

Japanese Food, Agriculture, Forestry and Fisheries

9Basic Policy for the Revitalisation of Japanese Food, Agriculture, Forestry and Fisheries (October 2011)

Working Intensively in

Primary Strategies

Increasing New Entrants

Strategy 1 Four Primary Strategies

Working Intensively in the next 5 years

Strategy 3in Agriculture,

Accelerating the Expansions of Farming Si (20 30h i Fl tl d

Promoting the Utilization of Resources in Rural

A f ESize (20-30ha in Flatland Areas and 10-20ha in

Hilly and MounteinousAreas)

Areas for Energy Production

Areas) Basic ApproachStrategy 2

C t ti

Strategy 4

Promoting the 6th

Industrialization, Strengthening

R l ti hi (Ki ) ith

Constructing Earthquake-Resistant

Infrastructures for Agriculture Forestry

10

Relationship(Kizuna)with Consumers, Rebuilding Strategies for the Export

Agriculture, Forestry, and Fisheries

III. Domestic approach to food security and views regarding multilateral and international food

i i i i isecurity initiatives

11

The Policy Research Institute Ministry of Agriculture Forestry and Fisheries predicts major crop prices will rise by 24-54% in

Trends in Price Prediction of Major Crops in 2021 (nominal and real)

The Policy Research Institute, Ministry of Agriculture, Forestry and Fisheries predicts major crop prices will rise by 24 54% innominal terms and 2-10% in real terms in 2021 compared with those in 2009 (the average for the 3 years between 2008 & 2010).

(solid: nominal, dotted: real)

(dollar/ ton)

900

1000

Rice

600

700

800

900

Soybeans

Wheat300

400

500

600

Corn

0

100

200

300

Notes 1. Actual prices are shown up to 2011 and predicted prices between 2012 and 2021.2. Real prices in the past and nominal prices in the future are calculated by using 2009 as a base year. Prices of wheat, corn and soybeans are calculated by using

0 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021

12Source: Policy Research Institute, Ministry of Agriculture, Forestry and Fisheries “Prospect of Supply and Demand of Food in the World in 2021” (released in Feb. 2012)

p p p y g y , y y gthe U.S. CPI, and the price of rice by using Thai CPI as a deflator (based on IMF data).

Establishing Holistic Food Security in Japan

Stable food supply to the citizens shall be secured by increased domestic agricultural production as a base together with appropriate combination of import and reserve. (Article 2; Food, Agriculture and Rural Areas Basic Act)

domestic agriculturaldomestic agricultural production

Appropriate combination

import reserve

13

Food security in terms of demand and access should be examined in addition to efforts in terms of l b i d b i h f d W h ld id d d i h th lit

Necessity of Comprehensive Food Security

supply being made by securing enough food. We should consider demand issues, such as the quality and nutrition of food and dietary life, and, at the same time, access issues such as the physical availability of food.

• Take securing measure to maintain production materials (fertilizer and so on)

• Strengthen quarantine for imported products, domestic control and sive

ctio

n

Strengthen quarantine for imported products, domestic control and quarantine measures.

mpr

ehen

sity

Prod

uc

• Growing interest in food safety• Health and nutritious balance

men

t of c

omoo

d se

cur

Mar

ketin

g an

d C

onsu

mpt

ion

• Promotion of international cooperation (AMIS, APIP, etc.) and support to foreign agricultural investment. st

ablis

hmfo

natio

nal

ctor

s

14

to foreign agricultural investment. • APTERR (ASEAN Plus Three Emergency Rice Reserve) Agreement was adopted and signed in October 2011.

Es

Inte

rn Fa

Outcomes

Discussion on Food Security in the Multilateral and International Initiatives

APEC countries to share goals of (i) sustainable development of the agricultural sector, and (ii) facilitation of investment, trade and markets to contribute to the global food security.

APEC Action Plan on Food Security is made, which identifies specific activities including promotion of responsible agricultural investment

APEC Ministerial Meeting on Food Security (Niigata, Japan, 16-17 October 2010)

investment.

The G20 Summit in Seoul (Seoul, Korea, 11-12 November 2010)

We endorse the Multi-Year Action Plan on Development. Enhance food security policy coherence and coordination and increase agricultural productivity and food availability, including by

The G8 Summit in Deauville (Deauville, France, 26-27 May 2011)

promoting responsible agriculture investment, fostering smallholder agriculture, proposals to better manage and mitigate risks of food price

volatility.

We encourage a strong and comprehensive multilateral and bilateral response to improve food security. We will intensify our efforts to foster sustainable agricultural production and productivity with an emphasis on smallholder's farmers

Meeting of G20 Agriculture Ministers (Paris, France, 22-23 June 2011)

We will intensify our efforts to foster sustainable agricultural production and productivity with an emphasis on smallholder s farmers.

We agree on an “Action Plan on food price volatility and agriculture”. We recognize the need to increase sustainable agricultural d tiproduction

and productivity to improve food security. We decide to launch an International Research Initiative for Wheat Improvement (IRIWI), the Agricultural Market Information System (AMIS),

“Global Agricultural Geo-Monitoring Initiative”, the Rapid Response Forum. Reducing the effects of price volatility for the most vulnerable The development of a proposal for a targeted emergency humanitarian

15

Reducing the effects of price volatility for the most vulnerable. The development of a proposal for a targeted emergency humanitarian food

reserves system focused on regional approaches. We strongly encourage G20 Finance Ministers and Central Bank Governors to take the appropriate decisions for a better regulation and

supervision of agricultural financial markets.

IV. Food and agricultural trade flows – key trading partners/ key trade agreements; views regarding WTO, RTAs, APEC, TPP, etc

16

○ WTO Ag Negotiations started in March 2000 conforming with the Uruguay Round agreements

WTO Agriculture Negotiations and Japan’s Basic Position

○ WTO Ag Negotiations started in March 2000, conforming with the Uruguay Round agreements.

○ Japan aims for the establishment of trade rules that keep balance between exporting and importing countries, with a fundamental principle of “coexistence of various types of agriculture.”

Japan’s basic position

“coexistence of various types of agriculture”E i f d i・Ensuring food security

・Consideration of multifunctionalityof agriculture

Domestic agricultural gpolicy reform

17Establishment of

balanced trade rules

Contribution to development of

developing countries

Japan’s EPA/FTAJapan’s EPA/FTA

・ Japan has 13 EPA/FTAs (signed or enacted) and is negotiating ones with Australia and so on.

S i l d

Japan

Switzerland

Korea

ＧＣＣ IndiaVietnam

Mexico

Malaysia

Philippine

IndonesiaSingapore

Thailand

ASEANBrunei

Peru

ChileAustralia

g p Peru

18

Enacted or Signed

Under negotiation

Gulf Cooperatton CouncilMember：Bahrain, Kuwait, Oman, Saudi Arabia, Qatar, UAE

ＧＣＣ

Japan’s trade value and EPA

・Entered into force with 13 nations/region, mainly ASEAN nations・18.7% by trade value base is shared by EPA

Mexico1%

Chile1%Swiss

Trade Value %% Trade value

Asean15%

Swiss1%

India1%

PeruEU10%

Others11%

Enter into force: 18.7%

Negotiating:Peru0%

Korea7%GCC

U.S.A.

10% Negotiating:20.0%

GCC9%

ChiTaiwan

12%

Source: trade statistics 2010

19

Australia4%

China21%HongKong

2%

Taiwan5%

Basic Policy on Comprehensive Economic Partnership(Cabinet Decision, November 9th 2010)

2. Concrete action to strengthen comprehensive economic partnerships[…] With regard to EPAs or broader regional economic partnerships that are politically

d ll d ll b f ll b f hand economically important and will be of especially great benefit to Japan, the Government of Japan, while taking into consideration the sensitivity of trade in certain products, will subject all goods to negotiations for trade liberalization and, through such negotiations pursue high level economic partnershipsnegotiations, pursue high-level economic partnerships.

the Government of Japan, with a view to "opening the country", will first promote 3. Integrated approach to EPA negotiations and domestic measures

f p , p g y , f pappropriate domestic reforms with respect to areas of the agricultural industry, movement of natural persons from abroad to Japan, and regulatory reforms.

(1) Agriculture"The Headquarters for the Promotion of Agricultural Structural Reform (provisional title)" will be established,……, in order to promote both high-level EPAs and i f J ' f d lf ffi i d i li i f i i l i d

20

improvement of Japan's food self-sufficiency and revitalization of its agriculture industry and rural communities, and also in order to take measures aimed at fostering sustainable and strong agriculture.

Press Conference by Prime Minister Yoshihiko Noda(Friday, November 11, 2011)

[ ] Japan will start consultations with the countries concerned[…] Japan will start consultations with the countries concerned,

make efforts to gather further information as to what each

country would expect from Japan, and, through sufficient

national debate, reach a conclusion on the TPP faithfully from

the viewpoint of our national interests.

21

Assumptions

Estimated Effects of Tariff Elimination on Japan’s Agriculture,Forestry and Fisheries

Estimated Effects of Tariff Elimination on Japan’s Agriculture,Forestry and Fisheries

○ 33 items are covered.（Agricultural products: 19 items, Forestry products: 1 item, Fisheries products : 13 items)

e g rice wheat sugar beet and cane milk and dairy products beef pork chicken shell egg

Assumptions

e.g.  rice, wheat, sugar beet and cane, milk and dairy products, beef, pork, chicken, shell egg,plywood, salmon, etc.

【Selection Criteria】 Items of which tariff rate exceeds 10% and production value exceeds one billion yen. 

Results

○ Decrease in production value ※ app. 4.5 trillion yen  

○ Food self sufficiency ratio (caloric intake base) b

wheat0.82%

others1.84%

forestry products 0.51%

Fisheries○ Food self‐sufficiency ratio (caloric intake base)down from 40% to app. 13%

○ Loss of estimated value of multifunctionality of agricultureapp. 3.7 trillion yen

rice19.744%chicken

19

shell egg1.53%

sugar beet and  cane  

1.53%

4% s e esproducts4.29%

app. 3.7 trillion yen

○ Effects on agriculture, forestry, fisheries and affiliated industry• Decrease in GDP app. 8.4 trillion yen• Number of affected employers

3 5 illi lpork46

milk and dairy products45

beef4.510%

1.94%

app. 3.5 million people

（100 billion yen）

※ Includes the loss of production value in primary processed food (e.g. wheat flour) made from domestic   agricultural, forestry and fisheries products.22

4.610%

4.510%

２

Ongoing Debates 

２３

Thank you for youra you fo youkind attention!kind attention!