Channel NewsAsia

Japan's PM Abe set to unveil new growth strategy

The third arrow in his Abenomics plan involves deregulating business, bringing more women into the workforce and reforming the long-protected agricultural sector. 

TOKYO: Japanese Prime Minister Shinzo Abe is set to unveil his new growth strategy on Tuesday.

The third arrow in his Abenomics plan involves deregulating business, bringing more women into the workforce and reforming the long-protected agricultural sector.

Channel NewsAsia spoke to one of Mr Abe's key advisors about how they plan to carry out agricultural reforms when many others have failed.

Japan's farming sector has been highly protected for decades.

A powerful lobby ensures hefty subsidies for its survival, but with the industry in decline, the Abe government is hoping to reform the sector.

Measures include reducing the status of the powerful national agriculture co-operative, or JA Zenchu, the first in 60 years.

Mr Sadakazu Osaki, Head of Research at Nomura Research Institute, said: "We're recommending it should be a consultative body. Basically, we think local agricultural co-operatives should have more power and freedom to decide what they produce, what they export, how they make a profit."

Mr Osaki is one of the committee members pushing for reforms in the agricultural sector - a sector many prime ministers have wanted to change - but none have managed to accomplish.

Now, Mr Abe wants to take the sector head-on by also allowing private companies to increase their shares in farming companies by up to 50 per cent, from the current 25 per cent.

Mr Osaki said: "It will improve growth rate of agriculture sector itself but it can't have economic impact on Japanese economy as a whole. But I think it's important that Japanese policy-making is changed. There used to be lots of discussions but no implementations."

Mr Abe also wants to accelerate the export of Japanese food products by bringing together the public and private sectors for the establishment of a global food value chain.

Japan's food market is worth about US$100 trillion yen (US$98 billion). And with a shrinking population there's little hope of further domestic market growth so Japan must look beyond its own shores.

But for that to happen, many issues need to be addressed.

Mr Yoshihiro Suzuki, General Manager of International Business Development Division at House Foods Group, said: "Even though we try for quality products, there are cases where the ingredients are of a lower quality and products are damaged when they are couriered."

Stepping up logistics is another key issue.

Mr Shinya Suto, General Manager of Global Logistics Solution Division at Nippon Express, said: "This project needs to be done quickly. We aim to speed up our processes."

If Mr Abe succeeds in reforming the agriculture sector, it will be a boon for Japanese trade as agricultural subsidy is a sticking point in its Trans Pacific Partnership negotiations.

But the government still needs parliamentary approval, which may be hard to come by given strong opposition to farming reforms.

And even if the bill is passed, analysts say the economic impact of the agricultural reform will only be seen in five to 10 years. 

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