Tuesday, July 14, 2009

The Bad Rap on Ozawa-DPJ’s Agricultural Policy

I think that Ichiro Ozawa and the DPJ have received something of a bad rap for its agricultural policy, which many people have contrasted unfavorably with the LDP-MAFF’s big business-oriented, top-down-cartelistic approach. I think this is a misperception to which I have succumbed myself in the past.

Helping Ozawa beat the rap is easy: the basic fits-all-sizes, direct payment (i.e. income subsidy) approach including frills for remote locations and organic farming appears in the 2005 election manifesto, complete with the 1-trillion yen/yr price tag. So if you want to blame someone, blame Katsuya Okada, not Ozawa.

The DPJ’s alleged sins require a little more explanation, although the fact that the program had been in place before Ozawa grabbed the reins—or the rein him, it’s kind of hard to tell with Ozawa—and possibly before suggests of itself that it is grounded in genuine socio-economic policy goals and is not merely a rural version of DPJ helicopter money tactics. In fact, the DPJ’s direct income support is more market-friendly than the LDP-MAFF’s “size matters” strategy, since it basically places the outcome of the price mechanism above the judgment of politicians and bureaucrats. There’s the 1 trillion yen price tag, but we won’t be able to pass judgment on it until we see the DPJ’s FY2010 budget and its likely four-year policy program coterminous with the Lower House mandate*.

I’m not saying that one agricultural policy is inherently better than the other. In fact, both sides shy away from the third rail, which is the tax regime that incents Japanese farmers to hold on to their smallholds, so what we have here is something of a pot-v.-kettle standoff, except that both sides studiously avoid mention of their respective backsides.

* I am pretty skeptical, but maybe that’s my ex-bureaucrat bias doing the thinking. In any case, I genuinely hope they succeed; I’m not going to do a Rush Limbaugh.

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