Policy Analysis of the Liberalisation of the Rice Market in Japan

The Japanese rice market is an extreme example of national market protection in an industrialised country. As=a consequence of these protectionist policies, domestic prices average alrnost 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 equilibriuin model we quantify the benefits that can be expected by extensive trade liberalisation and show that the Japanese consum~r and rice producers in developing countries largely carry the burden of the current system that only conserves the highly inefficient Japanese rice farrning structure. Our analysis shows that the curren~ policies are economically not the best means to address the objectives targeted by the "neiv dgriculttiral policy" of Japan that promotes'inainly food security, multifunctional aspects of agriculture and the parity of rural- urban incotrie distribution. On the contrary, the Japanese rice policy appears to use these arguments only as pretence to justify its protectionist interventions. As an alternatiire, we develop･an example for the