Increasing Pressure on Small Rice Farms and Hamlet Farms as 'Ninaite'

From 1995 onwards, the post-war system of direct state control over rice collection and marketing was dismantled. Subsidization for rice and the major diversion crops grown on paddy fields shifted from uniform price support towards a mix of price stabilization measures and direct income support. Marketing rice has been mostly liberalized, which also means that producers are free to sell their crops through bypassing the cooperative organization. However, the state has not given up rice price control entirely, employing instead high prohibitive tariffs on rice imports and a system to curtail domestic production. In the context of the rice production control programme, the diversion of paddy fields to other crops, like wheat, soy, or rice for animal feed is heavily subsidized. The responsibilities to execute the rice production control programme — that is, to keep the rice price artificially high - lies with local governments and local cooperatives.1 Although Nokyo, which still has a high stake in the rice market, is eager to make its members follow the rice production quotas comprehensively, the rice price could not be prevented from a steady decline since the end of direct state control, with a particularly sharp drop since 2014.[1] [2] Small, aging part-time rice farm households typically lack the machinery, the labour force, or the skills to grow anything but rice - they are thus neither able to fully exploit the support connected to rice production control, nor to switch to more lucrative crops altogether.[3] Compared to the heyday of rice price support, access of small rice farms to state support has thus become more difficult, while they are even further away from producing competitively.[4]

Changing subsidization methods went hand in hand with ‘structural reform’, that is, a series of policies to promote more efficient and business- oriented farms, euphemistically referred to as ‘bearers’, or ninaite in Japanese. Formally, ‘certified ninaite farms’ qualify for a variety of benefits, including for example cheap loans or better access to infrastructural support. Hamlet-based collective farms were included in the ninaite support schemes from the onset. Over the course of the 1990s, ninaite

policies mostly constituted an additional form of support.[5] In the 2000s, however, this changed with a series of policy initiatives aimed at exclusive subsidization for certified ninaite. In 2007, the government restricted a new support scheme for paddy-field crops on certified ninaite farms, originally even setting an acreage threshold of 4 ha as the minimum farm size to be eligible. For the first time, this reform was to exclude the large majority of rice farms in Japan from support payments for rice and the major diversion crops.[6] In this situation, founding a hamlet-based cooperative farm emerged as a lucrative loophole for small rice farms. Hamlet farms could access the new payment scheme if they assumed the legal form of a ‘special agricultural group’ (tokutei nogyo dantai). This requires members to pool at least two-thirds of the hamlet land for collective cultivation permanently, to unify accounting, and to present a plan for incorporating the farm within 5 years.[7] Between 2006 and 2009 alone, the number of hamlet farms rose sharply from about 10,500 to almost 13,500.[8] Meanwhile, the exclusive approach to paddy field subsidies was heavily criticized by agricultural interest groups such as Nokyo, as well as by LDP politicians with rural constituencies. Already after the LDP lost the Upper House election in 2007, the strict limitations for the subsidy scheme were watered down again and eventually taken back by the DPJ administration after 2009.[9] However, positive incentives for hamlet-based collective farming have been maintained, resulting in a further, but more moderate increase.[10] As of today, hamlet farms are firmly included in the politically sponsored target group of ninaite farms.

Under this umbrella, farm households can access cheap loans and invest in heavier machinery, which enables them to engage in the cultivation of land- and subsidy-intensive crops apart from rice. Thus, in an increasingly hostile political and socio-economic environment, collective cultivation at the hamlet level is a means to exploit resources and subsidies that have become inaccessible for small household farms alone.

  • [1] For details on the policy process, see George Mulgan, Japan's Agricultural Policy Regime;Honma, Gendai Nihon ndgyd no seisaku katei; Kimura and Jones, Reforming Agriculture; Godoand Takahashi, ‘Evaluation of the Japanese Agricultural Policy Reforms’.
  • [2] Interview with officials in Hikawa Town, March 2016.
  • [3] Only less than half of the paddy field land in Japan is subject to the paddy-field diversionprogramme, see Honma, ‘The TPP and Agricultural Reform in Japan’, 104. The Abe administration has announced the end of rice production control for 2017. This will be counterbalancedby further expansion of support for rice for conversion crops.
  • [4] Aritsubo, ‘Give Up Growing Rice, and Do-What?’.
  • [5] George Mulgan, Japan’s Agricultural Policy Regime, 75—81.
  • [6] For details on this policy called the Cross-Commodity Management StabilizationCountermeasure (hinmoku odanteki keiei antei taisaku), see Honma, Gendai Nihon nogyo noseisaku katei; Godo and Takahashi, ‘Evaluation of the Japanese agricultural policy reforms’.
  • [7] Honma, Gendai Nihon ndgyd no seisaku katei; Toyama, ‘Shuraku eino’.
  • [8] Hashizume, ‘Shuraku eino hatten’, 117.
  • [9] Godo, Sayonara Nippon ndgyd, 132—136
  • [10] MAFF, ‘Shuraku eino jittai chosa (2014)’. As of 2013, a hamlet of 30 households eachcultivating 0.3 ha rice could ‘reap’ an extra inflow of 435,000 Yen/year in subsidies if it decidedto engage in collective cultivation. See Hikawa Town Agriculture and Forestry Office, Heisei 24nendo eind zadankai shiryd, 16. The current Abe administration heavily subsidizes the incorporation of hamlet-based farms, see Ando, ‘Nochi chukan kanri kiko’.
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