Rice Outlook No. (RCS-0303-01) 19 pp

March 2003

Rice Sector Policies in Japan

This report provides a detailed description and analysis of policies used by Japan to support its rice producers. Domestic policies include a program offering compensation to farmers when market prices fall below specified targets, subsidized hazard insurance, and subsidies to increase the size of farm operations. At the border, a tariff-rate quota is administered by a government state-trading enterprise, which can apply markups to imported rice prices when it sells the rice inside Japan. To counter overproduction of rice, the government funds a diversion program that pays farmers to plant other crops on a third of the rice paddies. If Japan's policies were liberalized, production and/or prices of japonica rice outside Japan would rise, while prices would fall in Japan.

Keywords: Japan, rice, policies, domestic support, trade, trade liberalization, state trading, quota, PSE, producer support estimate, AMS, aggregate measurement of support

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