Simulation Analysis on the Economic Evaluation of Japanese Rice Policy under the WTO Regime

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The objective of this study is to investigate the alternatives of the rice policy in Japan under the WTO regime. In 2001, various studies have been conducted by the researchers of this group concerning Japanese, foreign and iriternational rice markets. In this summary, the results on the projection of the future Japanese rice market and the set-aside pttlicy are illustrated.Even though the rate of decreasing demand for rice is getting moderate, the gross rice consumption per capita is projected to continue to decrease frorm 71.9 kg in 1999 to 60-65 kg in 2015.With this trend, the domestic rice consumption is going to debrease from 9.905 million ton in 1999 to 8.271-9.022 million ton. On this other hand, the yield of the-normal crop in 2015 is estimated to grow by four percent to 535-540 kg in 2015.With this projection of yield, the sufficient paddy field area for the futufe rice demand is to decrease to 1.39-1.53 million ha in 2015, which is 13-22 percent decrease comparing to the planted area in 2000 (1.76 million ha) The total paddy field area is estimated to decline to 2.20 million ha in 2015, which means the gap between the total paddy field area and the sufficient area for rice demand is continue to be large (0.68-0.82 ha or 35 percent). These results imply that the use of alternative crops other than rice is crucial for the rice policy. The current substantial subsidies for the alternative crops are consistent with this policy implication while there lies a distributional problem. Most of the subsidies which are divided by the cultivators and the land owners is imputed to the land owners. This makes the real land rent excessively high.