Farming has always been a tough business, but it may get tougher for the small-time farmers in Japan. Japan wants to join the new Trans-Pacific Partnership trade pact (TPP). The U.S. government backs the TPP, as does Toyota Motor and Mitsubishi. Free trade, the idea is, translates to ultimately improved economic growth and prosperity for everyone.
Nevertheless, that does not mean there will not be some bumps in the road to free trade. In this case, those bumps will be felt by the smaller farms in Japan. Aya Takada and Yuriy Humber, writing for Bloomberg Businessweek (8/6/128/12/12, pp. 1314), explain the consequences:
Under the TPP agreement as it is envisioned, . . . tariffs would disappear, Japans farms, often only an acre or two in size, would then be overwhelmed by the super-efficient, large-scale agribusinesses of the U.S., New Zealand, Australia, and Canada. (p. 13)
Although tariffs have their genesis in good intentions, the big problem with them is they ultimately stifle economic prosperity. Furthermore, once nations begin playing the tariff game, it can easily escalate to a series of reactionary tariff increases and now the trade wars have begun. That harms everyone economically.
I believe tariffs have simply artificially propped up industries that were not functioning from a viable business plan. To that point, Tetsuhide Mikamo, the director of Japans largest agricultural trading house, expresses the inadequacies of the tariff system with respect to Japans smaller farmers:
What Japans agricultural policy has done so far is simply protect farmers, and that has weakened their competitiveness. (p. 14)
If Japans farmers are going to find their way through this changing trade climate, they will have to retool how they do farming, or they will have to seek an alternate occupation. As Bob Dylan once said, The times they are a changin. Any nation that wants a seat at the table in the 21st century economy must be willing to change with the times.
style=”border:none; width:450px; height:80px”>