'Japan Inc.' in the agricultural sector: reform or regression?

Abstract

‘Japan Inc.’ is manifested in the agricultural sector as a classic subgovernment consisting of the Ministry of Agriculture, Forestry and Fisheries, the Liberal Democratic Party, and the agricultural cooperative organisation (Nokyo). This three-way coalition of bureaucratic, party and producer organisations forms an ‘iron triangle’ of vested interest in agricultural support and protection. The agricultural public works component of the agricultural iron triangle is also linked to the larger iron triangle of public works, one of Japan’s most notorious interest coalitions. In the past decade, processes of electoral reform, administrative reform and financial liberalisation have presented each of the elements in the agricultural iron triangle with problems of political and organisational adjustment. At the same time, tripartite policymaking within the agricultural policy subgovernment has been institutionalised, and the LDP’s agricultural leadership is now directly penetrating the agricultural bureaucracy. Similarly, macro-policy trends such as deregulation, trade liberalization and fiscal stimulus have influenced the concessions and benefits flowing to the agricultural and rural sectors both positively and negatively. While a degree of induced marketisation and liberalisation has taken place, a defensive consolidation of the agricultural support and protection regime can be discerned with the passage of the 1999 Food, Agriculture and Rural Areas Basic Law. Moreover, the iron triangle of vested interests in agricultural and rural public works has been strengthened by policies to combat Japan’s sustained economic recession. On balance, therefore, innovation and reform are being offset by factors perpetuating the status quo and even further entrenching the agricultural support and protection regime.