Japanese farmers coming to a boil over Korean rice imports

Japan's powerful farmers are again at loggerheads with their government over food imports. Ostensibly the row is over a government plan for the temporary import of South Korean rice.

But the real issue is Japan's future agricultural policy. It involves such questions as just how much the government can dictate to farmers what they grow and how it can make the heavily subsidized rural sector more internationally competitive.

For some years the government has been trying to cut rice overproduction by persuading farmers to switch to other crops. It has been trying to maintain a delicate balance between supply and demand, making up for any temporary shortfalls by releasing government stocks of old rice.

But the plan came unstuck when health officials found that part of the 1978 stockpile (the last bumper harvest) was heavily contaminated with bromide, a harmful substance used for fumigation.

The food agency suspended shipment of some 100,000 tons of rice to the market. And with the rice reserve badly depleted, the government decided the only way to make up the shortfall was to buy abroad.

The most logical supplier was South Korea, which borrowed 630,000 tons of rice from Japan in 1969 and 1970 and is now repaying the debt in cash. Japan's proposal, still under negotiation, was for this to be changed to payment in kind.

There was an immediate howl from Japanese farmers. We gave in on American beef and citrus fruits out of political considerations, but we will not let you import Korean rice, they told the government in no uncertain terms.

The amount of rice is negligible - 1 percent of Japanese annual consumption - so no one in Japan will go hungry if the deal falls through.

But the issue has much broader implications. Critics see it as exposing the fallacy of the government's rice cutback program. This year, demand was estimated at 10.5 million tons and the new supply at 10.37 million tons, the difference made up from the 1978 stockpile. It only took the accidental poisoning of the latter to throw the whole program awry.

Agriculture, Forestry, and Fisheries Minister Shinjiro Yamamura says the rice cutback policy will be maintained no matter what.

It was started in the 1970s when an unacceptable glut was created through bumper harvests and change in Japanese eating habits (more bread and cakes).

Farmers were offered cash incentives to leave their fields fallow or switch to other crops. Many made the switch, albeit reluctantly. Farmers believed that rice was still the most financially stable crop due to the big subsidies the government pays in buying up the entire national output at high prices and selling it to the public at much lower ones, in order to keep inflation down.

Farmers now feel the government has gone too far. Four bad harvests in a row, with another expected this year, have more than wiped out the past glut.

The farm lobby's big concern is that the Korean import plan will set a ''bad precedent,'' meaning Japan might eventually buy rice from other countries. That really means the United States, as Californian rice is regarded as equal in quality to Japanese rice at only a quarter of the cost.

And the price gap could widen. Taking advantage of a tight supply situation, Japanese farmers are demanding an increase of 7.7 percent in the official producer price they receive from the government.

The Finance Ministry is adamant that the price must stay at last year's level. Otherwise, the government's entire austerity program to wipe out chronic budgetary deficits will be destroyed.

Officials reckon that a 1 percent increase would add $60 million to the deficit. The difference between the government purchase price and the consumer sales price for rice, wheat, barley, and rye already adds an estimated $450 million to the budgetary deficit every year.

Thus, the government's rice-price council will meet in July for its annual deliberations in a politically charged atmosphere.

The farmers, whose votes are vital to keep the ruling (pro-American) Liberal Democratic Party in office, are accusing the government of sabotaging the domestic industry through a sellout to foreign interests. They are particularly outraged at what they see as a program to destory Japanese self-sufficiency in one of the few agricultural product areas where foreign farmers haven't yet got a toehold.

The government refutes this. Agriculture Minister Yamamura has told the Diet (parliament) that the government remains committed to self-sufficiency in rice and increasing reliance on domestic farmers for as many other products as possible - assuming the price is right.