Japan Government Wants Free Trade. Japan Farmers Don’t.

The U.S. and Japanese governments want it. Mitsubishi backs it. Toyota Motor (TM) says it can’t compete without it. Yet whether Japan joins the biggest attempt at a free-trade pact may hinge on farmers like Tadashi Hirose. Hirose loses money on his 14 hectares (35 acres) of paddies in southwest Hokkaido, forcing him to take a second job at a construction company. Still, he says, if Japan joins the Trans-Pacific Partnership trade pact, or TPP, the resulting competition from abroad would destroy his family’s livelihood and economically devastate Hokkaido, the top rice-producing region.

The number of Japanese farmers, full-time and part-time, is 2.5 million—pretty large for a country that is not a major exporter of farm products. Their contribution to Japan’s $5.9 trillion gross domestic product is tiny. Yet the farmers wield disproportionate clout in Japanese politics. “Because of the rural bias in Japan’s electoral system the farming lobby is very powerful, even though as a percentage of the economy it accounts for 1 percent,” says Risaburo Nezu, a former trade negotiator for Japan’s government and now a senior executive fellow at the Fujitsu Research Institute.

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