The Puzzle of Small Farming in Japan

Yoshihisa Godo
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Yoshihisa Godo: Meiji Gakuin University

Development Economics Working Papers from East Asian Bureau of Economic Research

Abstract: Japans small farming represents a puzzle. Currently nearly three-quarters of farmland is operated by farmers whose farm size is well under optimal size. Being too small is the main reason for the high cost of Japanese farm products, so why does inefficient, small farming persist and market mechanisms not function? This paper explains the political dynamics whereby traditional small farming communities are powerful voting groups that prefer to maintain their political power rather than increase farm income. By exerting political pressure upon the authorities, farmers can obtain large returns through the manipulation of farmland-use regulations, even though such manipulation causes social harm by preventing efficient land use. Farmland problems are linked to the social problem of Japans underdeveloped participatory democracy, which is a problem in East Asian countries as well. These issues are not generally discussed by the Japanese mass media and academics. This paper also includes the authors policy suggestions for new farmland-use regulations and taxation.

Date: 2007-01
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