Food prices in Japan

by Ko Unoki
Reprinted from the International Herald Tribune
February 18, 2003
 

Regarding "Adapt to a Changing World Economy" (Views, Feb. 5) by Eisuke Sakakibara: The writer states that deregulation of Japan's agriculture and food processing industries is needed for Japan to adapt to the new division of labor in Asia.

Deregulation of agriculture will also be needed to revive Japan's stagnant economy. More than 20 percent of the total average Japanese household expenditure is for food, twice the proportion in the United States.

This is of no benefit to the Japanese economy, as it deters private consumption on high-gross-value-added nonfood products. High food prices contribute the overall high cost structure, as they force nonfarming industries to raise incomes beyond the productivity levels of workers so that employees can pay for food.

Yet, even while such an outrageous situation continues, the farming lobby has the audacity to ask Prime Minister Junichiro Koizumi to resist calls for tariff reduction on food products. If the prime minister is truly sincere in his calls for structural reform, a big step he should take is to resist the farming lobby, listen to the voice of consumers, and realize that structural reform, not protection, is what is needed in the farming sector of Japan.

Ko Unoki, Tokyo is a 2002 graduate of the Global Masters of Arts Program (GMAP) at The Fletcher School.