Failure of Structural Policies under the Agricultural Basic Law
If the increase in demand for agricultural protection in the course of postwar economic development stemmed from the shift in comparative advantage from agriculture to industry, was it not possible to reverse the trend by accelerating the growth rates of agricultural productivity through structural adjustments? In fact, ever since the 1961 Agricultural Basic Law was enacted with the goal of making agricultural income levels equal to those in other industries, the Japanese government has worked untiringly to achieve this target through improving the agricultural structure. As indicated by the ‘selective expansion’ slogan, this has meant policies designed to raise agricultural production efficiency and farm income by transferring resources from the production of farm products of low-income elasticities to those of high-income elasticities, and by expanding the scale of operations. Yet despite these policy efforts, it proved difficult to achieve income equalization through agricultural restructuring alone, and protective policies had to be resorted to, primarily because the rapid economic growth induced such rapid increases in non-agricultural income that agricultural restructuring and the improvements in labour productivity in agriculture could not keep pace. But was it not possible to achieve structural adjustments at a sufficiently rapid rate so that the income parity could have been achieved through an increase in agricultural productivity? What were the major impediments to the structural adjustments?
KeywordsEurope Income Marketing Explosive Expense
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