Keywords

Introduction

The purpose of this chapter is three-fold: first to review changes to Japan’s agricultural land use policies post World War II to the present time; second to highlight the country’s new agricultural policies framework, the so-called direct payment system introduced after 2000, the year after the Basic Law on Food, Agriculture and Rural Areas had been enacted and replaced the Agriculture Basic Law; third to examine urgent questions with regard to identifying which types of agricultural land users are preferred. In the first section, I will show how Japan’s agricultural land use policies had been changed after World War II and established through agricultural land use reform. In the second section, I will show that the main purpose of the direct payment system was to prevent the abandonment of agricultural land, and that they were very effective. In the third section, I will describe the current state of the agricultural committees, which continue to exist in almost all municipalities and have a long-standing responsibility for permitting the sale and leasing of agricultural land. I discuss there might be the possibility that rules and customs in rural areas will be changed drastically.

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Overview of Post-war Japan’s Agricultural Land Use Policies

Agricultural Land Use Reform and Establishment of the Owner Farmer System (Post-war to the First Half of the 1950s)

The most important matter for Japan’s post World War II agricultural policy was agricultural land use reform. Agricultural land use policies were reviewed at this time, concerning all aspects related to agriculture and food policy. The government’s aim was to solve the problem of rural poverty, which had been thought as the background of the war. And another aim was to increase agricultural productivity, which had fallen during the war, and in so doing to save the Japanese people from starvation. It was thought that by establishing many owner farmers this objective would be realized. Before the war, there had been serious conflicts between landowners of large agricultural land areas and tenant farmers with small acreages. The main outcome of Japan’s post-war agricultural land use reform was that landowners’ agricultural lands were transferred to many tenant farmers (Goda 1997).

The Agricultural Land Law, passed in 1952, was intended to sustain the effects of agricultural land use reform. Until 2009, when this law was changed drastically, the accepted principle was that farmers should own the land they cultivated. Conversely, renting and leasing agricultural land was not considered desirable. This principle would prove to be an obstacle later, when the scale of Japanese farms had to be enlarged.

At this point, I would like to note that the government promoted the expansion of agricultural land during this period to increase agricultural production. In fact, the areas of land dedicated to agricultural use in Japan continued to expand until 1961 (Iwamoto 1998).

Rising Prices for Land Caused by High Economic Growth and Difficulties Expanding the Scale of Farms (From the Second Half of the 1950s)

During the second half of the 1950s, on the one hand, the economic situation of Japanese farmers was not good, while on the other hand, the country was experiencing a period of high economic growth. This dichotomy was called the gap between industry and agriculture, and was considered a very serious social problem. The Agriculture Basic Law was enacted in 1961 to address this problem. The cause for this income gap between industry and agriculture was thought to be agriculture’s low productivity levels, which in turn were thought to be a consequence of each farmer’s ability to access only a small and fragmented agricultural land area. Therefore, the objective of the Agriculture Basic Law was to remove these constraints (Kitade 2001; Teruoka 2003; Tashiro 2012).

The expectation was that if the industrial sector continued to develop, it would require a larger labour force, which, in turn, would reduce the size of the labour force available for the agricultural sector. The remaining farmers could then cultivate larger land areas by acquiring the agricultural land of the retired farmers who had moved to industrial occupations. Once the remaining farmers gained larger farms, their productivity levels would be higher. And farmers would earn incomes equivalent to those of industry sector workers. The income gap between industry workers and farmers would be removed.

The expectation of the Agriculture Basic Law was not realized, because rapid economic growth increased the rate at which agricultural land was diverted to other uses, such as factory sites, residential areas, and roads. Additionally, Japan’s regulations pertaining to land use were not strictly enforced, and the price of agricultural land had risen so high that it would have been difficult to buy agricultural land and cultivate it economically. Furthermore, many farmers would not sell their land, because there was the possibility that the price of agricultural land would increase. These conditions made it difficult to buy agricultural land and expand the scale of farms. The intentions behind the Agriculture Basic Law were not realized, and consequently many farmers continued as part-time farmers.

It is noteworthy that, as already described, the Agriculture Basic Law was enacted in 1961. The area of agricultural land in production in Japan in that year was maximum and about 6.09 million ha compared to about 4.54 million ha in production in 2013.

Modification of the Principle Behind the Agricultural Land Law to Permit the Renting and Leasing of Agricultural Land and the Use of Positive Promotion (After 1970)

The Agricultural Land Law of 1952 was modified after 1970 to permit the renting and leasing of agricultural land by those who could only farm by exception before 1970. The thinking that led to this change was as follows. If it was difficult to increase the scale of farms by buying agricultural land, it should be possible to increase the scale of farms by renting additional land. A strategy was needed to promote the renting and leasing of agricultural land. To that end, the Agricultural Land Use Promotion Project was initiated in 1975, and the Agricultural Land Use Promotion Law was enacted in 1980. After that, the extent of area rights transferred through leasing exceeded the purchase and subsequent transfer of ownership rights for agricultural land (Imamura 1983).

Another big change that affected agricultural land use, particularly paddy field use, occurred during this period. A new policy, the so-called Gen-tan, asked farmers to reduce rice production and to replace rice plants in paddy fields with other plants. As already described, it had been difficult to realize the aim of the Agriculture Basic Law by expanding farm scales in order to increase productivity. On the contrary, the income gap between industrial sector and agricultural sector workers had shrunk, following government’s decision to raise the producer rice price. However, raising the producer rice price had led to increasing rice yields and the expansion of paddy field areas.

Some details changed over time with discussions being made about these changes. In essence, however, the Gen-tan policy framework had been maintained to this time. Rice production levels had been falling annually. Though Gen-tan itself is not an agricultural land use policy, it has strongly affected agricultural land use since 1970. The decision was made to use the strong human ties in rural communities to manage the undesired outcomes of the Gen-tan policy (Arahata 2014).

As I described, the maximum extent of Japan’s agricultural land use, including paddy fields and upland fields, occurred in 1961, but the extent of paddy fields in cultivation peaked in 1969. After 1970, the area covered by paddy fields began decreasing. The obvious reason for this change was implementation of the Gen-tan policy.

Following a period of high economic growth, a low economic growth period began after 1973. After 1986, however, the so-called economic bubble influenced all of Japan, including rural areas. The Law for the Development of Comprehensive Resort Areas (the so-called Resort Law) was passed in 1987. During this time, it was difficult to find rural areas that did not have plans to develop golf courses, resort hotels, skiing grounds, marinas, and other resort facilities. Many people living in rural areas, including farmers, thought that the economic bubble would allow them to profit from development, especially from selling agricultural lands and forests and from being employed in the hospitality service sectors. It is often said that the reduction of producer prices for agricultural products during this period was the main reason for the ruin of agricultural land, but I also think that agricultural land conditions were influenced by the unsettled minds of farmers in rural areas caught up in the economic bubble.

I would like to mention an important point with regard to the area of agricultural land. The extent of the cultivation of upland fields peaked in 1958, and a second peak followed in 1987. As already described, paddy field expansion stopped under the Gen-tan policy beginning in 1970, and after that, there was an expansion in upland farming, although the level of expansion was not very large compared with its extent before that time. After 1988, the extent of upland fields across Japan began to decline again.

The Problem of Abandoned Agricultural Land and a New Policy Framework

The Abandoned Agricultural Land Problem

In the previous section, I outlined changes to the agricultural land use policies in Japan after World War II, which was established through changes in agricultural land use reform. I also explained the principle that farmers should own the land they cultivated. The discussion point against this principle was influenced by the fact that serious problems of abandoned agricultural land had been evident since 1990. In this section, I will describe the problems related to abandoned agricultural land and comment on some new policy frameworks intended to prevent the abandonment of agricultural land.

From the perspective of agricultural land use, the growing extent of abandoned agricultural land is one of Japan’s big problems. According to The Census of Agriculture, abandoned agricultural land refers to previously cultivated land that has not been used for more than a year (fertility management) with no plans to resume its use within a few years. And land that has already reverted to wilderness is not included in the category of abandoned agricultural land (Ministry of Agriculture, Forestry and Fisheries of Japan 2010a). One important point is that abandoned land reported in the Census of Agriculture is not necessarily stock data.

Figure 1.1 provides summary data provided by Ministry of Agriculture, Forestry and Fisheries of Japan (MAFF) for cultivated land and planted areas. As evident from Fig. 1.1, the main reason for ruined agricultural land in recent years (after 1997 apparent) is the abandonment of agricultural land that was formerly cultivated.

Fig. 1.1
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Reasons for the ruination of Japan’s agricultural land from 1997 to 2013 (Ministry of Agriculture, Forestry and Fisheries of Japan 2012, 2013). Because the Great East Japan Earthquake damaged extensive areas of agricultural land in the Tohoku region, 2011 was an exceptional year

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Figure 1.2 shows how much land area is abandoned every 5 years, according to the Census of Agriculture. In 2010, the most recent year for which data are available from the Census of Agriculture, about 396 thousand ha of agricultural land were abandoned nationwide. It is sometimes said that the extent of agricultural land abandonment almost equates to the whole area of Japan’s Shiga Prefecture or Saitama Prefecture. This expression helps to convey the immensity of the abandoned agricultural land area. Abandoned agricultural land problems became serious in the 1990s, and the areas abandoned in each 5-year period since then have been increasing in size. Figure 1.2 further illustrates the increasing rate at which land is being abandoned.

Fig. 1.2
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Nationwide area and rate of abandoned land in Japan (Ministry of Agriculture, Forestry and Fisheries of Japan 2010c). Rate of abandoned land = Area of abandoned land/(Area of abandoned land + Area of cultivated agricultural land) × 100 (%)

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We can mark some epochs on the trend of the agricultural land area: the year 2000 was a big turning point. The extent of agricultural land in production had been decreasing since 1988, but in some regions, for example northeast Hokkaido and southeast Okinawa, the extent of cultivation in upland fields had been increasing little by little. By 2000, however, the increasing trend had stopped.

In addition, the declining utilization rate of cultivated agricultural land in Japan is also a serious problem. The maximum rate of the use of cultivated agricultural land was 137.6 % in 1956. Since then, the rate of the use of cultivated agricultural land has been declining continuously, with the most recent data in 2013 showing 91.9 %.

A new policy framework was drafted to respond to these circumstances. MAFF announced a new rural policy framework beginning in the 2014 fiscal year. The new policy framework is called the Japanese-style direct payment system. The term Japanese style is used to emphasize the difference between this payment system and the European payment system, as well as those of other advanced countries. What is the big difference between the Japanese style and the European direct payment system? The big difference between the two systems probably lie in the focus of subsidization. Japan’s direct payment system considers and spotlights restoration and reinforcement of the functioning of rural communities while the European payment system aims to support farmer’s income. The main purpose of the Japanese direct payment system is to strengthen ties of farmers in rural Japan. An important objective of this new policy framework is to maintain cultivated land and to keep rural areas in good condition.

Earlier I stated that the new rural policy framework was implemented in the 2014 fiscal year. Officially, the new rural policy framework has recently been called Japanese style by MAFF. But various existing policies have possibly been combined as part of this framework. One policy already in effect was the Direct Payment to Farmers in the Hilly and Mountainous Areas, which commenced in the 2000 fiscal year. Beginning in the 2007 fiscal year, a policy called the Payment for Conserving Farmland and Water was implemented, with the objective of strengthening ties among various residents (including not only farmers but also non-farmers) in rural communities. The Payment for Conserving Farmland and Water was initially called the Measures to Conserve and Improve Land, Water and Environment when it began in 2007, but the policy name and the framework have since been changed. The Payment for Conserving Farmland and Water applies not only to hilly and mountainous areas but also to Japan’s flatland areas. The payment also requires the agreement of the rural community residents.

Operation of The Direct Payment to Farmers in the Hilly and Mountainous Areas

The Direct Payment to Farmers in the Hilly and Mountainous Areas policy was implemented in the 2000 fiscal year. I would like to explain some aspects of this policy. Farmers who participate in the system are obliged to conclude an agreement in principle with the rural community group. The agreement is one of the most important aspects of the direct payment system. Farmers with paddy fields of steep degrees 1/20 or above are paid 21,000 Japanese yen (approximately US$210) per 10 a. Farmers with paddy fields of steep degrees less than 1/20, but 1/100 or above, are paid 8,000 Japanese yen (US$80). Therefore, payment amounts depend on the type of agricultural land and the degree of steepness. Policy makers have explained that the difference in payments is based on the different costs required to maintain agricultural land on the flatlands and on slopes. In short, a key aim of the system is to support the cultivation of steep agricultural land.

It can be argued that the direct payment system in the hilly and mountainous areas has been highly effective. Part of its effectiveness is indicated by the results of the 2000 and 2005 Censuses of Agriculture, which show the extent of cultivation before and after implementation of the system. It is especially apparent with regard to paddy fields, where the relationship between the steepness of the land where paddy fields exist and the ratio of decreasing areas of paddy fields is analysed. When compared to the long-term trend from 1960 to 2000, the direct payment system in the hilly and mountainous areas reveals a different trend from 2000 to 2005 (Hashiguchi 2010).

Operation of the Payment for Conserving Farmland and Water

Another new policy framework, the Payment for Conserving Farmland and Water, was implemented in the 2007 fiscal year. This framework includes not only hilly and mountainous areas, but also flatland areas. It supports collaborative activities that contribute to the preservation and qualitative agriculture improvements of local resources, including agricultural land, rivers, channels for irrigation, and farm drainage. It also requires the agreement of the rural community residents, which is comparable to that required for the Direct Payment to Farmers in the Hilly and Mountainous Areas.

This payment has been provided to conserve and manage farmlands and farm water resources. And main purpose is to improve the rural environment. Basic payments are as follows: 3,400 Japanese yen (US$34) per 10 a of paddy fields are subsidized in the Hokkaido region, while 4,400 Japanese yen (US$44) per 10 a of paddy fields are subsidized in non-Hokkaido regions, 1,200 Japanese (US$12) yen per 10 a of upland fields in the Hokkaido region, while 2,800 Japanese yen (US$28) per 10 a to cultivate those in non-Hokkaido regions. The payment amounts are decided by calculating the cost to maintain agricultural land and local resources. This policy provides the framework needed to encourage rural communities to implement repairs and renewal operations. It is also intended to lengthen the service lives of terminal irrigation canals and farm roads.

Table 1.1 summarizes the extent of the conservation measures undertaken by rural communities. A comparison between 2005 and 2010 reveals a large difference. For example, with regard to agricultural land use in 2005, 19.0 % of rural communities conserved agricultural land. However, in 2010, 34.6 % of the rural communities conserved agricultural land. Therefore, the changes have apparently been a result of the Payment for Conserving Farmland and Water.

Table 1.1 Rate at which rural communities preserve local resources
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Other Measures Taken to Recover Abandoned Agricultural Land

Earlier I described two new policies implemented to protect agricultural land from abandonment. In addition to those policies, measures have been taken to return abandoned agricultural land to cultivated agricultural land. Under the Economic and Fiscal Reform 2007 (Basic Policies 2007) approved by the Japanese cabinet, it was agreed that they intended to dissolve the abandoned agricultural problems in primary agricultural zones within 5 years. Other measures were taken to stop the abandonment of agricultural land operations. For example, with the objective of reclaiming abandoned agricultural land, the government conducted a field survey to identify where and to what extent agricultural land, which had previously been cultivated, was not being cultivated in the 2008 fiscal year. Another example of other measures taken is the subsidies for emergency measures to support efforts made to revitalize and utilize devastated agricultural land and to develop needed facilities.

By approving operating policies aimed at stopping the abandonment of agricultural land and implementing measures to reclaim abandoned agricultural land, the extent of abandoned agricultural land seems to be less compared with the situation before. However, it would be difficult to solve all abandoned agricultural land problems. I would like to comment further on this point in the conclusion of this chapter.

Current Tendency to Use Agricultural Land and Discussion Points

Deregulation of the Right to Use Agricultural Land, and the Appearance of a Variety of Agricultural Land Users

In a previous section, I described some new policy frameworks intended to prevent the abandonment of agricultural land. These frameworks have been relatively effective, but there is still a difficult argument regarding which agricultural land users should be allowed to cultivate land. And there is the strong opinion that the government should help new types of agricultural land users enter the agricultural sector. In this section, I will discuss the current situation regarding agricultural use matters.

In 1999, the Basic Law on Food, Agriculture and Rural Areas replaced the Agriculture Basic Law, which had been in effect since 1961. There had been difficult arguments about Japan’s agricultural land use policy after 1961 regarding which type of agricultural land users were best suited to manage agricultural land effectively and sustainably. Big changes were finally happening. As already mentioned, after 1970 the extent of area rights transferred through leasing exceeded the purchase and subsequent transfer of ownership rights for agricultural land. However, the principle behind the Agriculture Basic Law was that owner farmers were the best choice for cultivating agricultural land, and this official stance was maintained until 2009. This exemplifies the double standard policy that had been called the cultivator principle. It is difficult to explain this idea, because the land-owning farmer principle is a simple concept, but the cultivator principle is somehow confusing. It means that those who rent agricultural land must also cultivate that land. It might be seen as common sense, but there is the possibility that the land could be loaned or leased to other people, agricultural workers could be hired to farm the land, or the agricultural land would be neglected.

For this reason, large joint-stock corporations had not been permitted to own or to rent agricultural land, because stockholders are different from cultivators. Owning or renting agricultural land by large joint-stock corporations was believed to contradict to the cultivator principle. Other than individual and household farmers, only small, specific, limited corporations and agricultural producers’ cooperative corporations had been permitted to use agricultural land. The specific corporations could use agricultural land, but had to meet some requirements regarding the type of corporation, percentage of stockholders, and executives’ duty to cultivate the land.

The Law on Special Zones for Structural Reform of 2003 had permitted the use of agricultural land by definite general joint-stock corporations in the district where the law was applied. In addition, a general joint-stock corporation could rent land not only in the district where the Law on Special Zones for Structural Reform was applied, but also anywhere in the country, after the Agricultural Land Law was amended in 2009. This represented a big change and was called building the foundation of the agricultural land system from possession to use.

The Current Situation of Agricultural Land Use and Discussion Points

The last discussion point still exists, namely, the question remains whether a general joint-stock corporation can own agricultural land or not. There is strong pressure from big business circles that it should be permitted to buy agricultural land everywhere.

Another fact is also important. Intermediary Agricultural Land Management Institutions were established in every prefecture early in the 2014 fiscal year. The installation of these institutions is intended to speed up the consolidation of agricultural land. Furthermore, the entry of diverse agricultural land users, including big companies, into the agricultural sector will be promoted. This notion was the subject of a difficult argument at the national parliament. These institutions have been given the authority to decide which agricultural land users should be allowed to cultivate specific areas of agricultural land. The point of concern is that the institution might select big companies, which are not necessarily based in rural communities as cultivators.

Another difficult point in the argument is in the spotlight. It concerns the current state of the agricultural committees established in almost all municipalities in 1951, which, for a long time, have played a very important role in permitting the sale and leasing of agricultural land. These agricultural committees are made up of two types of members: those who are appointed by the mayor of the municipality and those who are voted in by farmers who cultivate agricultural land. An important point is that the number of members voted in should be greater than the number of members appointed. In fact, of the total number of members in all agricultural committees nationwide, three quarters are voted-in members.

Discussion has progressed to the point where selecting agricultural committee members by vote would be abolished and all members would be appointed, with the total number of members being reduced. To solve the problem of abandoned agricultural land, the functions of agricultural committees had just been strengthened in 2009. However, I have to wonder whether the recent discussions will lead to improvements.

Conclusion

Data from the Census of Agriculture show that ties within rural communities have indeed been strengthened by some of the new policy frameworks. Currently, however, the average age of farmers in rural areas is almost 5 years older compared to that in 5 years ago. This means it will be difficult to rejuvenate the farming population. Further, the area of cultivated agricultural land is declining while abandoned agricultural land continues to be a serious problem.

I would like to suggest again that the subsidy programs that have proven their effectiveness should be evaluated further. However, I do not think they hold promise for future. Not only farmers, but also all residents in rural communities are mainly old people, so the level of subsidies provided are inadequate for maintaining households, especially for young people.

There are considerable expectations regarding the possible impacts of Japan’s new policy framework and some of the programs put in place to revitalize not only less favoured areas but also flatland areas. Nevertheless, it is difficult to foresee a promising future unless the new policy framework is made more trustworthy and reliable as well as many other policies are mobilized with consideration for the future of the beneficiaries and rural areas.