Market impacts of Japanese rice policies with and without supply control

Nobuhiro Suzuki and Harry Kaiser
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Nobuhiro Suzuki: Department of Agricultural Economics, Kyusyu University, Postal: Department of Agricultural Economics, Kyusyu University

Agribusiness, 1998, vol. 14, issue 5, 355-362

Abstract: An imperfect competition model for the Japanese rice market is developed to examine the impact of the current supply control policy used in Japan. The model simulates farm revenues with and without the current Acreage Reduction Program (ARP). The results indicate that the current ARP enhances farmers' revenue by 600 to 1,000 billion yen compared with the no supply control policy. Consequently, contrary to popular negative opinion regarding the ARP, rice farmers are benefiting from the current ARP. The market impacts of a loan rate system without the ARP are also investigated. The results indicate that if farmers' marketing organizations have some market power to restrict sales through diverting sales to the government, then a loan rate system would result in a relatively high price for farmers accompanied by modest government costs. © 1998 John Wiley & Sons, Inc.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:14:y:1998:i:5:p:355-362

DOI: 10.1002/(SICI)1520-6297(199809/10)14:5<355::AID-AGR2>3.0.CO;2-B

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