Inefficiency in rice production and land use: a panel study of Japanese rice farmers
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Inefficiency in rice production and land use: a panel study of Japanese rice farmers Kazuo Ogawa1 Received: 18 June 2018 / Revised: 26 February 2019 / Accepted: 27 February 2019 © Japanese Economic Association 2019
Abstract An empirical analysis was conducted on the behavior of Japanese rice producers from the standpoint of efficiency in production using the panel data of the Rice Production Cost Statistics by the Ministry of Agriculture, Forestry and Fisheries. The stochastic frontier production function was estimated and the inefficiency indices of production were calculated. Based on this information, the efficient and inefficient rice producers were identified, and the factor demand behavior and characteristics of the land use for rice production were compared. We find that the production-efficient certified farmers lowered the land utilization rate of paddy for rice production greatly. Keywords Stochastic frontier production function · Productivity · Factor demand · Land use · Rice production adjustment JEL Classification Q12 · Q15 · Q18
1 Introduction Japan’s consumption for rice is decreasing as a secular trend. The annual per capita consumption of rice peaked in 1962, and has exhibited a consistent tendency to decline since that time. Japanese consumed 118 kg per capita on an average in 1962, but this figure had decreased to only 55 kg per capita as of 2014. In addition, domestic consumption exhibited a tendency to decrease. Figure 1 shows the production of and consumption for rice as a staple food from 2004 to 2014. Almost every year, production exceeded consumption, and excess supply has continued. Given chronic oversupply of rice, the Japanese government has been promoting a shift of crops from production of the staple food, rice, to soybeans and grains, and in addition, a change of crops to the so-called “new demand rice”, which is mainly rice * Kazuo Ogawa [email protected] 1
College of Foreign Studies, Kansai Gaidai University, 16‑1 Nakamiyahigashino‑cho, Hirakata, Osaka 573‑1001, Japan
Published Online: 25 April 2019
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Fig. 1 Production and consumption of rice as a staple food. Source: Ministry of Agriculture, Forestry and Fisheries, Situations about Rice, Basic Principles on Demand and Supply of Rice and price Stabilization
used as animal feed. The “Basic Plan on Food, Agriculture and Rural Areas” issued in 2015 also called for the provision of the support required for achieving an expansion of the production of rice for animal feed and other such uses.1 However, even with the shift from rice as a staple food to other crops, if the farmers in charge of producing rice as a staple food are inefficient producers, it would be costlier to produce rice. In fact, it is evident that, from an international perspective, the operation scale of rice cultivation in Japan is small, and its produc
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