Rural Communities Struggle for Survival — Neoliberal Globalization Transforms Farmers' Lives and Politics
by Ono Kazuoki
posted November 2007
An issue scarcely discussed or debated during the July 2007 Upper House elections was nonetheless to have a tremendous impact on their outcome. It was the issue of agriculture, rural communities, small towns, and villages. Neglected in advance of the elections, voters in rural single-seat constituencies delivered defeat to the incumbent Liberal Democratic Party (LDP), and helped the Democratic Party of Japan (DPJ) advance significantly. In this paper I will examine what happened to rural agricultural constituencies — long considered as LDP strongholds — by focusing on the contending parties・policies and the lives and the actions of local residents. Let me first look at the current rural situation.
Disappearing Villages
A few years ago, I visited several Gunma Prefecture villages. I left the mountainous Chichibu area in Saitama Prefecture (just north of Tokyo), crossed a mountain pass, and arrived in Gunma prefecture. A number of villages dot the mountains of Saitama, Gunma, Yamanashi, and Nagano prefectures. Old settlements were developed along mountain streams. Upstream one finds hamlets clinging to the mountain slopes. I visited one such place at a height of 800 meters above sea level. More than 20 families once called it home, but the number has dwindled to six. Just nine persons now live there — three singles and three couples. All are over 70 years of age. There is a tight social network, they gather daily to talk over tea. Their children, who have gone on to urban areas, sometimes invite their parents to come and live with them, but they do not intend to move.
A food seller, with a small truck acting as a mobile miniature market, comes by once a week. When the truck arrives playing music, the old people happily gather to talk with the young driver/seller while doing their shopping. In addition, Yakult (a lactic acid drink) is delivered three times a week, and a postman visits every day around 3pm. The postman not only delivers mail, but also carries mail to the post office if residents hang a small flag in front of their house. He also delivers newspapers, so the morning papers arrive in the afternoon.
It is literally a genkai-shuraku, an unenviable community environment perhaps, but the residents are not unhappy. They get on well, and live peacefully, cultivating small hillside farms surrounded by fences to keep out wild boars. But now something baleful is coming to this settlement. The post office in the village center recently stopped its mail delivery and collection as the result of service consolidation under the postal service privatization program. At the moment mail delivery continues from another post office, but the residents are afraid that delivery service might also be abolished. They feel that if mail service stops for good, they would no longer be able to live here and this hamlet will disappear.
Former Prime Minister Koizumi Junichiro's LDP cabinet, which was in office from April 2001 through September 2006, made postal privatization the core of its neoliberal reforms. Unwittingly, this 途eform・may prove the last straw for this settlement already on the brink of extinction.
According to a survey by Ministry of Land, Infrastructure, Transportation and Tourism, there were 62,271 settlements in 775 municipalities through Japan in 2006. The survey found that 7,813 settlements (12.3 percent of the total) had half or more of their residents aged over 65 years. The Ministry projects that 422 settlements have the possibility of disappearing altogether within ten years, and that 2,219 settlements, sooner or later, are bound to disappear. The figures foretell that hamlet disappearances will increase year by year.
Most Japanese villages are stable settlements with a few hundred years of history (with the exception of some frontier settlements). Such villages have been rapidly disappearing in the past couple of decades. The hamlet I introduced above has some 400 years of history. In such villages, various folkways remain and traditional events are preserved. The disappearance of such villages is synonymous with the disappearance of people's living history, pride, and culture. This "progress of destruction" is under way across the country.
Creeping Depression in Agriculture
I walked in this area in September 2007, when the rice harvest started. The sound of combine harvester engines echoed through the mountains, and the smell of ripe rice filled the air. Although the harvest is traditionally the most exciting time of the year, the Okitama farmers looked unhappy. This was because the producer price of new rice was down more than expected. The producer price had fallen every year since the 1990s, but the fall was exceptional this time. Rice farmers were alarmed at the way the price had kept spiraling downward.
I saw a farmer in his fifties who had stopped his combine and was having a rest in the dike. I asked him how much the provisional advance payment was when he took his new rice to the Japan Agricultural Cooperative (JA). The JA makes this advance payment before harvesting to prevent farmers from selling their rice elsewhere. He told me the payment was 10,200 yen per 60kg of Haenuki, the recommended brand of rice in Yamagata prefecture and 10,800 yen per 60kg of Koshihikari. Last year it was 12,000 yen for 60kg of Haenuki and approximately 13,000 yen for 60kg of Koshihikari, so the advance payment had fallen 15-17 percent in just one year (All prices are for brown rice).
The current advance payment price is half the price of 20 years ago. At the end of 1993 when the GATT Uruguay Round was concluded, the Japanese government accepted the "minimum access" system, under which it would import a certain percentage of domestic rice consumption regardless of the internal supply and demand situation. It has implemented that system since 1995. Japan, though on a limited scale, opened its rice market internationally. At that time, the "brand-name" rice varieties with the producing areas specified such as Chiba prefecture's Koshihikari were sold by the producers at more than 20,000 yen per 60kg (in brown rice). For the Koshihikari produced in Uonuma in Niigata prefecture, said to be the most delicious rice in Japan, the price was more than 30,000 yen.
Over the 12 following years the producer price has halved. To call this situation an "agricultural depression" is not an overstatement. The situation of creeping agricultural depression has continued for more than ten years, and rice farmers are filled with fear of an endless price fall.
However much I think about it, I cannot find convincing reasons why the producer price had to go down in 2007. The crop index, published each year by Ministry of Agriculture, Forestry, and Fisheries (MAFF), was 99 (the average crop is 100). According to the index, 2007 was average. The amount of production shifted in the direction of decrease, imports did not increase, and there was no drastic decline in consumption. Still, the price was down about 15 percent.
Something strange is also happening in rice trading. The first rice trade in 2007 at the Rice Price Center shocked us all. There the rice price is determined through bids between sellers such as the JA and buyers such as wholesale firms or large retailers. This year when Koshihikari rice from Chiba and Mie prefectures (both early crop areas) was offered on the market, nobody made a successful bid. It was the first time since the center's inception in 1990 that no contract was made in the first trading session. Some buyers made offers, but at prices that sellers were unable to accept.
According to the MAFF's Statistics Survey on Farm Management and Economy, rice production cost in 2005 was 16,750 yen per 60kg. The producer price had already dropped below the production cost. Hard-working farmers who had made heavy investments to counter international competition and had expanded the size of their farms suffered the greatest from falling prices. The average cultivated area for rice cropping in Japan is about 1.1ha per household. In order to expand that to more than 10ha, farmers borrowed investment funds under the assumption that the rice price would be about 18,000 yen. However, the actual producer price soon sank way below that level. With the production price below the production cost, the number of farmers who cannot pay back their debts is increasing, particularly in rice production areas in Hokkaido and Tohoku district.
What about small-scale farmers, such as part-timers or aged farmers? They are the overwhelming majority of the Japanese farming population. And they are the ones having supported rice production in Japan until now. Yet, their situation is nearing a crisis point. Because of the deterioration of the price terms, an increasing number of farmers are withdrawing from rice production. I have often heard from farmers that "if my current rice planter and combine machines break down, I would give up rice production instead of buying new ones." There is a strong possibility that the withdrawal of farmers from agriculture and the abandonment of cultivation will accelerate.
Economic Growth and Agriculture — Massive Emergence of Part-time Farmers
After Japan's defeat in the World War II, reconstruction in the 1950s led to the beginning of rapid economic growth in the 1960s. This rapid economic growth significantly changed Japanese society. Traditional Japan was transformed with regard to the modes of urban life, dwellings, traffic, food, family size and living arrangements. Agriculture and the rural environment also had to change significantly. Industrial structures started to change: automobiles, electronics, machinery, shipbuilding, and petrochemicals became leading industries; while agriculture and the rural areas increasingly played a supporting role, supplying resources of people, land, and water to cities and industries.
The Basic Agricultural Law of 1961 was designed to facilitate the role of agriculture to serve industrialization. It aimed to promote efficiency in agriculture so that the agricultural sector could adjust itself to economic growth in other sectors and the income gap between urban workers and rural farmers would be narrowed. In order to do this, it was necessary to change small-scale farming practices. A policy to consolidate three farm households into one and to encourage two to give up farming was announced. People in the two households who abandoned farming looked for jobs in the rapidly expanding industrial sectors. As only one household was to do the same amount of farm work as formerly done by three, efficiency had to improve. For this purpose, the government promoted farm mechanization through subsidizing the clearing of farm lands for the use of large machinery such as tractors. In addition, fertilizer was massively used, and pesticides and herbicides were introduced. The government described these policies as an agriculture modernization policy. Japanese agriculture thus definitively embarked on the course of developing modern agriculture.
The policies were half success and half failure. Mechanization and the use of fertilizer were successful, and the productivity of agriculture considerably improved. However, many of the farmers expected to give up farming under the "three-to-one" consolidation scheme did not do so. Instead they chose to become part-time farmers, picking up other jobs in their spare time instead of giving up farming altogether. The small per-farmer land holding in Japan has persisted to today.
When looking at the MAFF's Trend Survey on Agricultural Structure, 56.8 percent of 1,765,000 product-selling farming households (those whose farmland is more than 30ha or sale of agricultural product is more than 500,000 yen a year) had less than 1ha land (in all prefectures except Hokkaido) as of February 2007. Meanwhile, 35.1 percent had 1-3ha land, 5.1 percent had 3-5ha, and only 3.1 percent more than 5ha.
Small farmers remain strongly represented in the structure of agricultural management. Even after half a century of scale-expansion policy, only a small number of farmers have come to own more than 10ha of land with an expectancy of surviving international competition. The majority of farmers survived as part-time farmers by using the increased employment opportunities that resulted from industrialization. Farmers used to have only one income source, agriculture, but they have multiplied their income sources and become relatively rich consumers, because the total earnings from multiple small sources amounted to a decent total income.
There is another reason that small-scale farming survives. The LDP government largely depended on votes from rural areas still with a large population and community solidarity. The government advanced their structural reform of agriculture, while implementing a policy of income redistribution in order to control the economic gap between urban and rural sectors and alleviate rural discontent. It redistributed the fruits of industrialization through a price-support policy and subsidies for staple agricultural products such as rice. However, in 1960, when Japan started its rapid economic growth, the first policy the government adopted was trade liberalization. Trade liberalization and tariff reductions on many products, including agricultural products, and the deregulation of capital transactions were announced. Japanese capitalism took a step toward the global market. In this period, agricultural products such as fresh vegetables, sugar, bananas, lemons, and ingredients for mixed stock feeds were liberalized, and food self-sufficiency started to decline rapidly. The structure of trade in Japan, in which industrial goods were exported and agricultural products were imported, took shape. In agricultural policy, Japan largely depended on the United States for its supply of corn, wheat, and soybeans; and reduced their domestic production. Thus, the food self-sufficiency rapidly declined, from 73 percent (calculated on a calorie basis) in 1965 to 39 percent today. This led to a reduction of agricultural production and to a decline in rural areas; but on the other hand, profits earned from the export of industrial goods in exchange for food self-sufficiency were recycled into rural areas by expansion of employment and agricultural subsidies such as the price-support policy for agricultural products, resulting in a degree of stability in the rural economy. A strange structure that reduced agriculture but stabilized farmers・lives became entrenched, serving to maintain the power base of the LDP government.
Farmers Depend More on Agriculture that Does not Pay
How about farmers who depend mostly on agriculture? The classification of farmers by the MAFF includes the category of "certified farmers," the target farmers' group for the agricultural policy of the government. This category is based on the Farm Management Base Strengthening Promotion Law. The government calls this group "motivated and capable professional farmers." One farmer writer, Yamashita Soichi, cursed this law, saying: "what is irritating to me is that it sorts out farmers according to their motivation, but a farmer's motivation changes at least ten times a day." [1]
The MAFF explains that the Farm Management Base Strengthening Promoting Law aimed to establish "a system under which agricultural lands could be rented without any worries" and "a system to foster farm management as a business." The law, according to the MAFF, sets up this system as a way to foster farmers who would assume an efficient and stable farm management. The government decides who is and who is not a qualified farmer. Certified farmers design and submit their management plans to municipal governments for approval. Everybody who is motivated to improve farm management is eligible, regardless of gender, full or part-time farming status, or farm scale. The MAFF explains that this system will "pecify future leaders in agriculture and implement focused and prioritized measures to assist them." Agricultural economist Odagiri Tokumi has recently produced an analysis of the situation of these certified farmers using the Trend Statistics of Farm Management.[2] According to his analysis, certificated farmers on an average (in all prefectures except Hokkaido) covered only 79.2 percent of their household costs by agricultural income in 2003. Even "professional farmers," so-called by the government, have been unable to support their household exclusively with agricultural income over the past five years.
These analyses demonstrate that both part-time and full-time farmers have increased their reliance on agricultural income. The recent Upper House election was held in a situation in which agriculture suffered from a bottomless farm product price reduction due to the effects of globalization. Farmers did not automatically vote, as they once did, for the LDP.
Is it Enough Just to Have a Safety Net?
What percentage of farmers is covered by this policy? According to figures published by the MAFF on August 3 2007, the Measure of Management Income Stabilization covers only 26 percent of rice acreage, 3.6 percent of farm management bodies, and 3.6 percent of rural villages. These figures show that most farmers and farm lands are excluded. They are simply thrown out into the vortex of international competition without protection.
In contrast to this "reform-oriented" agricultural policy of the LDP, the DP announced a commitment to the Individual Household Income Support System, and introduced an implementation bill into the Diet. The outline shows that the negative differential between standard retail price and production cost in the four staple agricultural products of rice, wheat, soybeans, and canola would be compensated. All commercial farmers who follow the target output figures given by national and local governments would be covered by this protective scheme although surplus beyond the government-prescribed output is not eligible for compensation. The DPJ predicted that it would cost one trillion yen to implement the system.
This policy of the DPJ, certainly, will have the effect of a safety net for farmers fearful of price reduction under globalization. It would put a brake on the destruction of agriculture and farmers・lives by helping farmers to cover their production cost for rice and other products through income compensation. In that respect, the policy is different from the policy of the national government and the LDP. It is widely admitted that the DPJ's policy is attractive in situations in which both small part-time and certificated farmers cannot help depending on agricultural income, as mentioned earlier and better than the farmer "sorting-out" policy of the government and the LDP.
However, the reality of agriculture and rural areas is not so simple and easy that a safety net alone can solve the problems. There is no difference of policy between the LDP and the DPJ in relation to their attitudes toward the WTO and FTAs or liberalization of all sectors including agriculture for the advance of Japanese business into the world market. Neither party intends to remove the primary cause of the destruction of agriculture and rural areas. In particular, the DPJ would be contradicting itself if it seriously means its agricultural policy without revising its neoliberal trade policy. In Japan, as globalization advances, cheaper agricultural products flood in from overseas and the price goes down. If the policy of compensation for agricultural production costs continues, it will, inevitably, result in endless increases in policy costs. Therefore, the focus should shift to how far the neoliberal policy can be modified.
The Collapse of Three Vote-gathering Machines
When I visited Niigata prefecture to gather information on elections in the 1980s, I found that all the employees in a local construction company, including casual workers, were taking turns staying with and campaigning for the office of a LDP candidate. All were obligated to submit private lists of voters likely to support the candidate. These lists were cross-checked, and any company whose employees submitted unsatisfactory lists risked losing its contract immediately after the election. Thus, construction companies that cooperated with the LDP acquired power and influence in rural areas. However, the situation has reversed. Now, small construction company owners are the second highest-ranked group in rural suicide statistics as ranked by occupation, next only to agriculture, forestry, and fishing people. These categories are both classed as structurally depressed industries.
How about the agricultural cooperatives (JA)? The agricultural cooperative, which is supposed to be a collective of free farming individuals, started in postwar Japan as a state-initiated, top-down organization. Hence their role as a transmission belt of government policies and an important keeper of order in rural society. Previously, conservative parties in Japan were supported by local dynasty families from traditional society. This class held various kinds of village offices and its leaders were elected to public posts with the assured support of entire communities. JA officers, women's associations, youth associations, and production organizations were also keepers of the village order. Political scientist Ishida Takeshi states that this was the reason the JA "tended to identify not with opposition parties but with the ruling party that constitutes the core of the regime." [3]
In the era of economic growth during and after the 1960s, immediate benefits were added to tradition as a new incentive. A colossal organization embracing practically all farming households, the JA began to campaign for substantial annual rice price hikes and various subsidies, and won them in exchange for the votes it delivered. On this score, it earned the reputation as a vote-gathering machine of the LDP. However, the rural communities have now lost their traditional spirit of mutual collaboration, and price support for agricultural products is gone at the national level as an obstacle to WTO-dictated free trade. Along with public works, agricultural subsidies are being mercilessly hacked. The frame that had bound villagers has now fallen apart, for better or worse. Under these circumstances, no one can predict in which political direction rural voters will move in the near future. (November 2007)
Note
"Marginal settlement" (genkai-shuraku) is the term used to describe a rural settlement where more than half of the population is over 65 years old and which is struggling to maintain social and communal activities such as weddings, funerals, rice field work, and road maintenance work.
The Okitama Basin in southern Yamagata prefecture is one of Japan's best rice-producing areas. Upstream of the Mogami River, surrounded by the Asahi-Iide, Azuma, and Ou Mountains, it is a rich agricultural zone with abundant clean water flowing from the mountains. In summer, it is swelteringly hot in the daytime, but comfortably cool when the sun sets behind the mountains. It is said that the greater the temperature differential between daytime and nighttime, the more delicious the rice.
Let me look back on what has led Japanese agriculture to this desperate situation.
The wave of globalization, which rapidly advanced from the 1990s, broke this structure. Some income sources for farmers shrank or disappeared. As mentioned earlier, agricultural income has dropped. Public works such as the construction of roads, bridges, and dams, which created plenty of job opportunities, were reduced under the slogan of "small government;" construction companies in local areas, which depended on public works, lost contracts, and jobs for men in villages decreased. Electronic and textile factories migrated to China because of cheaper wages there. Let us trace the weight of non-agricultural income in the household costs of part-time farming households using the MAFF's Trend Statistics of Farm Management. In 1995, part-time farmers・non-agricultural income amounted to 111 percent of their household costs, meaning that non-agricultural income was more than sufficient to cover their household costs. But the level has since declined year by year to below 100 in 2003 and has now fallen to a level insufficient to support their living. During this time, non-agricultural income decreased by 25 percent, from 6,390,000 yen a year in 1995 to 4,770,000 yen in 2003. This shows that the exhaustion of local economies caused damage to the supposedly wealthy part-time farmers. In the Japanese agriculture, most of the part-time farmers were earning outside of agriculture to compensate for losses they incur in doing agriculture. This practice has barely kept Japanese agriculture alive. But now neoliberal globalization threatens to bring this survival mechanism to demise.
How did the LDP and the DPJ, which competed against each other in single seat electorates, respond to this situation? The LDP addressed it with a "reform" policy, promising preferential treatment to licensed farmers who were able to meet higher land-holding standards. In concrete terms, the policy focused government support exclusively on those certified farmers (individuals or corporations) who had more than 4ha land (more than 10ha in Hokkaido), or farming organizations in settlements which owned more than two-thirds of the land of their settlement concerned and cultivated more than 20ha. Among the preferential measures for this upper stratum of farming entities are Management Income Stabilization Measures implemented since the 2007 fiscal year. Anticipating product price reduction due to international competition, the government under these measures directly compensates for losses due to international price fluctuations in regard to rice, wheat, soybeans, and beets, whose self-efficiency rates are extremely low, as well as to potatoes as a starch source. The government will compensate 90 percent of the loss incurred. The loss is calculated by averaging the prices in three of the latest five years, the highest and lowest price years being disregarded, and then subtracting the price in the year concerned from the average price; the differential, if it is positive, represents the loss in that year. To pay the compensation, the national and local governments and producers contribute money every year to a fund set up for the purpose. In addition, the loss from four non-rice items is compensated directly to producers when the retail price in the market is lower than the production cost. We omit here the complicated formula for calculation of this compensation. In sum, the policy aims to focus support on some large farming bodies and to alleviate their suffering, taking it for granted that price reduction of agricultural products will continue in the future under globalization.
Like it or not, the modality of elections in rural areas has changed drastically. It is said that the LDP used to rake in the rural votes through three mechanisms: the JA, construction companies, and post offices. Votes delivered by the post offices largely collapsed with postal service privatization. Construction companies had constituted the biggest vote-gathering machine in rural areas, wielding great influence over villagers because of their capacity to employ farmers and thus increase rural household income. But these once powerful companies have been hamstrung by the reduction of public works projects, and can no longer afford to work effectively in election campaigns.
(Translated by Ando Takemasa)
1 Yamashita Soichi, Ono Kazuoki (2004), Hyakusho ga Jidai o Tsukuru [Farmers Make Epoch], Nanatsunomori Shokan, Tokyo.
2 Odagiri Tokumi (2006) JA no Ninaite Taisaku no Kadai[Problems of Who are to be JA's Main Force] in Nougyo to Keizai, Showado, Kyoto.
3 Ishida Takeshi (1961) Gendai Soshiki Ron [On Contemporary Organizations], Iwanami Shoten, Tokyo.
Ono Kazuoki: An agriculture journalist who walks through local villages and brings voices of farmers. Currently, he is a board member of Asian Farmers Exchange Center, which aims at promoting direct exchanges of farmers in Asian region, and of No to WTO/FTA Grassroots Campaign Japan.
