Rice and the TPP

Interesting to think that a lot of the debate about the TPP in Japan is centered on rice cultivation in Japan. Another interesting editorial about rice in the JA Shimbun.

http://www.jacom.or.jp/tokusyu/2011/tokusyu110602-13692.php

There are some obvious reasons why Japanese rice agriculture is so vuln

erable to a free trade agreement that put agricultural products on the table. The cost of producing rice in Japan is 20 times that of Vietnam and 10 that of the US. This results from a lot of Japanese rice being planted in valleys and in terraced fields, among other things.

Here is some of the lowdown on Japanese rice cultivation. Rice crops in Japan are typically about 1 ha in size and actual rice paddies are about .2 ha. Compare that to the US where rice paddies are typically 30 ha. With the scale being so different in Japan, we are actually talking about a different kind of agriculture with different kinds of machinery and facilities. Interestingly, Thailand, a traditional exporter of rice uses small plots as well (6 ha) but the cost of labour in Thailand is much lower.

Researchers have said that all we can realistically expect from Japanese rice cultivation is 15 ha. Get rid of tariffs, and there is no way that farms this size can compete with the US. Estimates are that in 10 years Japan could be importing seven million tons of rice.

So what does this all have to do with other Asian countries?

600 million farmers produce rice in the monsoon areas in Asia, and most of this is consumed domestically, or in the area in which it is produced. Compared to wheat, rice is almost not traded at all. So does Japan really want to become a massive importer of rice in this kind of environment?

They already have experience. During the massive crop failure of 1993, Japan imported 2.5 million tons of rice, and this kind of trade drastically impacts price. One researcher points to 1979-1981 when Korea imported 3 milion tons of rice, and the international price of rice rose 30 percent. Imagine what 7 million ton imports would look like: At the moment, world trade in rice is about 20 million tons and the world price is 600 dollars/ton based on the Thai price. This could be expected to double, critics of the TPP claim.