0023-6152

AA00697606

4519

Unrefereed

0023-6152

AA00697606

The Japanese rice market is an extreme example of national market protection in an industrialsed country. As a consequence of these proyrctionist policies, domestic prices average almost 4 times the world market price for comparable rice qualities. This paper discusses the obstacles on the way to political reform and to more openness of the rice trade. With the framework of a partial equilibrium model we quantify the benefits that can be expected by exhensive trade liberalisation and show that the Japanese consumer and rice producers in developing countries largely carry the burden of the current system that only conserves the highly inefficient Japanese rice farming structure. Our analysis shows that the current policies are economically not the best means to address the objectives taegeted by the "New agricultural policy" of Japan that promotes mainly food security, multifunctional aspects of agriculture and the parity of rural- urban income distribution. On the contrary, the Japanese rice policy appers to use these arguments only as oretence to justify its protectionist interventions. As an alternative, we develop an example for the conversion to a direct payment system that targets the political objectives directly and improves the competitiveness of the production in Japan.