Banking on RiceKay ShimizuJuly 31, 2015 at Ritsumeikan University

Japan’s opposition to TPP portrayed as farmers’ opposition

Government promised to protect 5 sacred products, the most important being rice

In fact, many farmers don’t care1. The price difference between Japanese rice and foreign rice has disappeared

disappeared Japanese rice

California rice

Chinese rice

Rice prices / 60 kg

In fact, many farmers don’t care

2. Most (rice) farmers are part-time farmers farming 30 days per year (per 1000 sqm)

In fact, many farmers don’t care

3. Farmers don’t depend on the price of rice

Income of farm households

Income from agriculture

Total income of farm householdsIncome of farm

households vs non-farm households

Protection of rice has not been effective

Japanese production of rice has gone from 12 million tons in 1994 to 8 million tons in 2012

High tariffs ineffective against the aging of farmers and declining population

In fact, Japan is overproducing rice In order to export rice and other agricultural

produce, TPP is ideal for opening the gates to foreign markets

Who actually opposes TPP?

Unlike the Uruguay Round, according to a Kyodo survey, 45% of primary sector workers opposed TPP, while 17 % supported TPP

Full-time farmers support the TPP Direct payments to farmers should adequately

compensate the losers BUT, no talk of such alternative policies Farmers are not opposed to TPP, but Japan Agricultural

Cooperative (JA) opposes TPP, because JA survives on the administrative fees for selling rice and other farm products

JA Bank, one of Japan’s largest banks

JA = Japan Agricultural Cooperative Part of the JA Group, the only coop or legal

entity in Japan allowed to operate both a bank and an insurance company have two-tiered membership giving part-time

farmers membership

Number 2 in deposits (50 trillion yen in 2014), roughly the size of mega-bank Mizuho Bank

83 billion yen (in 2014) in total assets

The price of rice supported by Japanese people = 1 trillion yen

Gentan – decreases rice acreage 400 billion yen as subsidies

Tariffs – prevents the entry of “cheaper” foreign rice

High prices – consumers pay artificially high prices despite decreasing demand 600 billion yen in additional costs

Where does all this money go???

Japanese agriculture left behind

High rice prices allow part time farmers to stay put Full time farmers cannot expand their land to become

more efficient and profitable Planting alternative crops (gentan) keeps rice paddy

production low Decreases food self sufficiency by

Decreasing the acreage of rice by 30% Decreasing the production of rice by 5 million tons Increasing the import of wheat by 7 million tons

# of farmers declining, but JA membership increasing

Farm households

JA full members

JA part-time members

High rice price allows part time farmers to remain farmers = JA members

Breakdown of farm household incomes

Pensions, subsidies

Non-agricultural income

Agricultural income

The mission of The Norinchukin Bank is to fully support Japan’s agricultural, fisheries and forestry industries as the national-level organization of JA Bank Group, JF Marine Bank Group and JForest Group. Through this support, the Bank contributes to the development of food production and consumption and a better quality of life for the people living in local communities.

Does the financial economy support the productive economy?

JA Bank propped up by high rice prices High rice prices propped up by

Trade barriers preventing the entry of “cheaper” foreign rice

Taxpayers subsidizing farmers NOT to plant rice

Consumers paying high prices for rice

JA Bank rich in deposits from part time farmers JA Bank increasingly earning profits beyond Japanese

borders JA Bank’s Japanese government bonds holdings decreasing

Who profits? JA Group… uses funds to lobby for trade barriers…

END

JA Group, and JA Bank, built by Japanese taxpayers and consumers

JA Bank system

Why does JA Bank flourish as Japan’s agriculture weakens?

The number of farmers are decreasing rapidly

Average age of farmers 69

Increasing abandoned farmland

How can JA Bank, the main bank of farmers, continue to flourish?