Rice Production Structure and Policy Effects in Japan

Yoshimi Kuroda holds a PhD from Stanford University, USA. He is Emeritus Professor of Economics at the University of Tsukuba, Japan, and Visiting Research Fellow at the International Centre for the Study of East Asian Development, Kitakyushu, Japan. His lifetime and representative research contributions are presented in his two-volume work entitled Production Structure and Productivity of Japanese Agriculture, published by Palgrave Macmillan in 2013.

• List of Figures List of Tables Foreword by Keijiro Otsuka Foreword by Masayoshi Honma Preface Acknowledgement List of Abbreviations Introduction PART I: THE PRODUCTION STRUCTURE OF THE RICE SECTOR OF JAPANESE AGRICULTURE DURING THE SECOND HALF OF THE 20TH CENTURY The Objective of Part I 1 Changes in Postwar Japanse Agriculture, Problems Setting up, and the Analytical Framework [Ab: Changes in Postwar Japanse Agriculture] 1.1 Introduction 1.2 Statistical Observations of Postwar Japanese Agriculture 1.2.1 Postwar Agricultural Production in Japan as a Whole 1.2.2 Postwar Movements of Farmlands in Tofuken and Tohoku 1.2.3 Postwar Movements of the Number of Farm Households in Tofuken and Tohoku 1.2.4 Postwar Movements of the Agricultural Budgets 1.2.5 Postwar Movements of the Utilization of Farmlands 1.2.6 Postwar Movements of the Public Investments in Agricultural R&D and Extension Activities 1.2.7 The Outline of the Quantitative Investigations of the Rice Production Structure and the Effects of Variable Policy Measures 2 Technology Structure of the Rice Sector of Japanese Agriculture: (I) A Translog Vari- able Cost (VC) Function Approach [Ab: Translog VC Function Approach] 2.1 Introduction 2.2 Agricultural Production in Tohoku 2.3 Analytical Framework 2.3.1 The Variable Cost (VC) Function Model 2.3.1.1 The VC Function Model (A) 2.3.1.2 The VC function Model (B) 2.3.2 Tests for the Technology Structure of Rice Production 2.3.2.1 Homotheticity 2.3.2.2 No Technological Change 2.3.2.3 Hicks Neutral Technological Change 2.3.2.4 Extended Hick Neutral Technological Change 2.3.2.5 Cobb-Douglas (C-D) Production Function 2.3.2.6 Constant Returns to Scale (CRTS) 2.3.3 Basic Economic Indicators of the Technology Structure of Postwar Rice Production 2.3.3.1 Factor Demand Elasticities and the Allen, Morishima, and McFadden (Shadow) Elas- ticities of Factor Substitutions 2.3.3.2 Returns to Scale 2.3.3.3 'Factor Inputs-Saving' and 'Output-Augmenting' Technological Change 'Rates' Based on the Parameter Estimates of the Model (A) of the VC Function 2.3.3.4 The Biases of Technological Change Bias 2.3.3.5 The Shadow Price of Paddy Land 2.4 The Data and Estimation Procedure 2.5 Empirical Results 2.5.1 Parameter Estimates of the VC Functions: Model (A) and Model (B) 2.5.2 Results of the Tests forthe Six Hypotheses 2.5.3 Various Economic Indicators Estimated Based on the Model (A) and Model (B) 2.5.3.1 Own-Price Variable Factor Demand Elasticities 2.5.3.2 Elasticities of Substitutions among Variable Factor Inputs 2.5.3.3 Estimates of the Degrees of Returns to Scale (RTS) 2.5.3.4 Estimates of the 'Rates' of 'Inputs-Saving' and 'Output-Augmenting' Technological Change (P GX and P GY ) 2.5.3.5 Estimates of the Biases of Technological Change 2.5.3.6 The Shadow Value of Paddy Land 2.6 Summary and Concluding Remarks Appendix A: Variable Definitions 3 Technology Structure of the Rice Sector of Japanese Agriculture: (II) A Translog Variable Profit Function Approach [Ab: Translog VP Function Approach] 3.1 Introduction 3.2 Analytical Framework 3.2.1 The Variable Profit (VP) Function Model 3.2.2 Tests for the Technology Structure of Rice Production 3.2.2.1 Homotheticity 3.2.2.2 No Technological Change with respect to the Stock of Technological Knowledge (ZR) 3.2.2.3 Neutral Technological Change with respect to (ZR) 3.2.2.4 Cobb-Douglas (C-D) Production Function 3.2.2.5 Constant Returns to Scale (CRTS) 3.2.3 Estimations of Output Supply and Input Demand Elasticities 3.2.3.1 Estimation of Output Supply Elasticities 3.2.3.2 Estimations of Variable Factor Input Demand Elasticities 3.2.4 Estimation of the Degrees of Returns to Scale (RT S) 3.2.5 Estimation of the Shadow Value of Land 3.3 The Data and Estimation Procedure 3.4 Empirical Results 3.4.1 Results of the Variable Profit (VP) Function 3.4.2 Results of the Tests forthe Five Hypotheses 3.4.3 Estimates of Output Supply and Input Demand Elasticities 3.4.3.1 Estimates of Rice Output Supply Elasticities 3.4.3.2 Estimates of Variable Factor Demand Elasticities 3.4.3.3 Estimates of the Degrees of Returns to Scale (RT S) 3.4.3.4 Estimates of the Shadow Value of Paddy Land 3.4.3.5 Possibilities of Land Transfer from Small- to Large-Scale Farms 3.5 Summary and Concluding Remarks Appendix B: Variable Definitions PART II: IMPACTS OF AGRICULTURAL POLICIES AND STRUCTURAL TRANS- FORMATION OF AGRICULTURE The Objective of Part II 4 The Impacts of the Rice Price-Support Programs on the Structural Transformation of the Rice Sector [Ab: Impacts of Rice Price-Support on Structural Transformation] 4.1 Introduction 4.2 Analytical Framework 4.2.1 Impacts of Changes in Rice Price on the Five Economic Indicators 4.2.1.1 Impacts of Changes in Rice Price on the Supply of Rice 4.2.1.2 Impacts of Changes in Rice Price on the Demands for the Variable Factor Inputs 4.2.1.3 Impacts of Changes in Rice Price on the Amount of Variable Profits 4.2.1.4 Impacts of Changes in Rice Price on the Degrees of Returns to Scale 4.2.1.5 Impacts of Changes in Rice Price on the Shadow Value of Land 4.3 Empirical Results 4.3.1 Impacts of Rice Price-Support Programs on the Five Economic Indicators 4.3.1.1 Impacts of Rice Price-Support Programs on the Supply of Rice 4.3.1.2 Impacts of Rice Price-Support Programs on the Demands for the Variable Factor Inputs 4.3.1.3 Impacts of Rice Price-Support Programs on the Amount of Variable Profits 4.3.1.4 Impacts of Rice Price-Support Programs on the Degrees of Returns to Scale 4.3.1.5 Impacts of Rice Price-Support Programs on the Shadow Value of Land 4.4 Summary and Concluding Remarks 5 Impacts of the Set-Aside Programs on the Agricultural Structural Transformation of the Rice Sector [Ab: Impacts of Set-Asides on Structural Transformation] 5.1 Introduction 5.2 Analytical Framework 5.2.1 Impacts of Changes in the Planted Area of Paddy Land on the Five Economic Indicators 5.2.1.1 Impacts of Changes in the Planted Area of Paddy Land on the Supply of Rice 5.2.1.2 Impacts of Changes in the Planted Area of Paddy Land on the Demands for the Variable Factor Inputs 5.2.1.3 Impacts of Changes in the Planted Area of Paddy Land on the Amount of Variable Profits 5.2.1.4 Impacts of Changes in the Planted Area of Paddy Land on the Degrees of Returns to Scale 5.2.1.5 Impacts of Changes in the Planted Area of Paddy Land on the Shadow Value of Land 5.3 Empirical Results 5.3.1 Impacts of Changes in the Set-Aside Programs on the Supply of Rice 5.3.2 Impacts of Changes in the Set-Aside Programs on the Demands for the Variable Factor Inputs 5.3.3 Impacts of Changes in the Set-Aside Programs on the Amount of Variable Profits 5.3.4 Impacts of Changes in the Set-Aside Programs on the Degrees of Returns to Scale 5.3.5 Impacts of Changes in the Set-Aside Programs on the Shadow Value of Land 5.4 Summary and Concluding Remarks 6 The Impacts of Factor Inputs-Subsidies on the Agricultural Structural Transformation of the Rice Sector [Ab: Impacts of Input-Subsidies on Structural Transformation] 6.1 Introduction 6.2 Analytical Framework 6.2.1 the Impacts of Changes in the Prices of the Variable Factor Inputs on the Five Economic Indicators 6.2.1.1 Impacts of Changes in the Prices of the Variable Factor Inputs on the Supply of Rice 6.2.1.2 Impacts of Changes in the Prices of the Variable Factor Inputs on the Demands for the Variable Factor Inputs 6.2.1.3 Impacts of Changes in the Prices of the Variable Factor Inputs on the Amount of Variable Profits 6.2.1.4 Impacts of Changes in the Prices of the Variable Factor Inputs on the Degrees of Returns to Scale 6.2.1.5 Impacts of Changes in the Prices of the Variable Factor Inputs on the Shadow Value of Paddy Land 6.3 Empirical Results 6.3.1 Impacts of Factor Inputs-Subsidies on the Five Economic Indicators 6.3.1.1 Impacts of Factor Inputs-Subsidies on the Supply of Rice 6.3.1.2 Impacts of Factor Inputs-Subsidies on the Demands for the Variable Factor Inputs 6.3.1.3 Impacts of Factor Inputs-Subsidies on the Amount of Variable Profits 6.3.1.4 Impacts of Factor Inputs-Subsidies on the Degree of Returns to Scale 6.3.1.5 Impacts of Factor Inputs-Subsidies on the Shadow Value of Paddy Land 6.4 Summary and Concluding Remarks 7 The Impacts of Public Agricultural R&D and Extension (R&E) Programs on the Agri- cultural Structural Transformation of the Rice Sector [Ab: Impacts of R&E Programs on Structural Transformation] 7.1 Introduction 7.2 Analytical Framework 7.2.1 Impacts of Changes in the Stock of Technological Knowledge (R&E) on the Five Eco- nomic Indicators 7.2.1.1 Impacts of Changes in R&E on the Supply of Rice 7.2.1.2 Impacts of Changes in R&E on the Demands for the Variable Factor Inputs 7.2.1.3 Impacts of Changes in R&E on the Amount of Variable Profits 7.2.1.4 Impacts of Changes in R&E on the Degree of Returns to Scale 7.2.1.5 Impacts of Changes in R&E on the Shadow Value of Paddy Land 7.3 Empirical Results 7.3.1 Impacts of Changes in the Stock of Technological Knowledge (R&E) on the Five Economic Indicators 7.3.1.1 Impacts of Changes in R&E on the Supply of Rice 7.3.1.2 Impacts of Changes in R&E on the Demands for the Variable Factor Inputs 7.3.1.3 Impacts of Changes in R&E on the Amount of Variable Profits 7.3.1.4 Impacts of Changes in R&E on the Degree of Returns to Scale 7.3.1.5 Impacts of Changes in R&E on the Shadow Value of Paddy Land 7.4 Summary and Concluding Remarks 8 Summary and Conclusions

'This book is full of useful information about the structure of Japanese agriculture, its transformation, and obstacles to achieve it. That is why I strongly recommend policymakers, governmental agricultural officers, agricultural specialists, and agricultural economists, including graduate students, to read this book, learn lessons from the Japanese experience, and draw socially and globally useful policy implications.' Professor Keijiro Otsuka, National Graduate Institute for Policy Studies, Tokyo, Japan 'This book is a must-read for researchers seeking to understand diverse aspects of and approaches to the study of Japanese agricultural structure, particularly in the rice sector.' Professor Masayoshi Honma, Department of Agricultural and Resource Economics, University of Tokyo, Japan