Media  Global Economy  2019.08.06

The House of Councillors Election Determined by Single-seat Constituencies, Farmers' Votes Hold the Key ―The Mechanism of Increasing Weight of Farmers' Votes despite Decreasing Number of Farming Households

The article was originally posted on RONZA on July 8, 2019

On July 5, the Asahi Shimbun published an article titled "Fate of Election in the Hands of Single-Seat Constituencies," stating that in the 32 single-seat constituencies of the 74 local electoral districts, "even a narrow margin of votes decides the success or failure of candidates and affects the overall outcome."

Both the ruling and opposition parties are of the same understanding. The Liberal Democratic Party (LDP) headed by Prime Minister Abe designated 16 electoral districts as "closely contested constituencies," including the 11 electoral districts in which the LDP lost seats in the previous House of Councillors election, and intends to focus on stepping up its support especially of the single-seat constituencies in the Tohoku region, where the LDP suffered more losses than wins at a ratio of five to one.

The Constitutional Democratic Party of Japan, the Democratic Party for the People, and the Japanese Communist Party are joining forces to counter the ruling bloc and avoid splitting their vote by fielding unified candidates in all 32 single-seat constituencies.

Subsequently, the Asahi Shimbun ran an article on July 6 titled "Initial Phase of Election: Severe Competition in Single-Seat Constituencies," providing an analysis showing that opposition party candidates have a lead in the single-seat constituencies of Akita, Nagano, Ehime, and Okinawa, while those in Iwate, Miyagi, Yamagata, Niigata, and Shiga are in close competition.

LDP faces struggle in conservative districts

Some of the causes of the struggle may be the military base issues in Okinawa and the opposition parties' support for popular candidates in Ehime and Shiga. However, the LDP faces a struggle in other districts of the Tohoku and Shin'etsu regions. Although Nagano traditionally has a strong opposition force, other areas of Tohoku and Niigata exude a strong conservative image. Wouldn't many people be surprised at the struggle the LDP candidates are facing in these areas?

These areas have the commonality of agriculture playing a major role and position in the local economy and society. Furthermore, the proportion of rice production to total agricultural production is higher than that of other areas.

In the last House of Councillors election, Japan's participation in the Trans-Pacific Partnership (TPP), to which the agricultural sector had been opposed, and the sharp drop in the price of rice produced in 2014 after the Abe administration took office are said to be the causes for the LDP suffering more losses than wins at a ratio of five to one in the Tohoku electoral districts.

In the previous 2013 House of Councillors election, the LDP won a landslide victory of 29 to 2 in the single-seat constituencies. However, even in this election, the LDP candidate in Yamagata barely managed to win by a thin 3% margin of 48% to 45% owing to the transfer of support to the opposing candidate by agricultural cooperatives in Yamagata that were dissatisfied with the Abe administration's decision to participate in the TPP negotiations.

In other words, farmers' votes affect elections in Tohoku and other closely contested constituencies.

Increasing weight of farmers' votes despite decreasing number of farming households

But this is a surprising fact since farmers' votes are on the decrease, and Tohoku is no exception.

The number of farming households nationwide was 6.06 million in 1960, 4.66 million in 1980, 3.12 million in 2000, and 2.16 million in 2015. The number of households has decreased to one third of that in 1960. Looking at the statistics provided on the transition of the number of farming households (called "market gardeners") that earn more than a certain amount of money by selling farm products to understand the latest trend, the number of households has decreased by half in the last twenty years from 2.34 million in 2000 to 1.13 million in 2019.

Citing Akita as an example, agricultural products account for 2.5% of gross prefectural product (0.9% for nationwide percentage; the same hereafter), farmers account for 9.0% (3.4%) of total workers, and farming households account for 12.6% (4.0%) of ordinary households. Although the prefectural percentage is higher than the nationwide percentage, the figures cannot be said to be large enough to affect the course of an election.

In Akita also, the number of farming households has decreased to 50,000 from 120,000 in 1965. The proportion of farming households to ordinary households has drastically decreased from 42.8% to 12.6% during the same period. The significance of agriculture has fallen dramatically, both economically and demographically.

So, why do farmers' votes play such a key role?

The reason lies in the aspect of the single-seat constituency much the same as the single-member district of the House of Representatives election.

Farmers' votes are loyal votes organized by the Japan Agricultural Cooperatives (JA). If candidates of the ruling and opposition parties were to compete fifty-fifty and the organized votes, though lessened to 2%, should go to the opposing candidate, the opposing candidate would get a 4% edge on the competition and win 52 to 48. This is what politicians who run for seats in the local single-member districts and single-seat constituencies fear.

If politicians lose in an election, they face unemployment. The competition is serious because their families' livelihood is at stake. For the same reason, the LDP forms a coalition with the Komeito Party. Should the Komeito Party's loyal votes go to the opposition parties, a gap of double the actual difference of votes would occur.

Vying for agricultural protection

What happens as a result is far from parties setting forth significantly different agricultural policies such as whether to protect or not protect agriculture. As candidates of both the ruling and opposition parties compete to collect farmers' votes, the election campaign ends up in a competition of agricultural protection.

In regard to rice, both the Constitutional Democratic Party of Japan and Democratic Party for the People set forth the reimplementation of the Nogyosha kobetsu shotoku hosho seido (Farmers' Door-to-door or Individual Income Compensation System), which was implemented under the administration of the Democratic Party of Japan and abolished the moment the LDP took over the administration. The system provides farmers with government subsidies of 15,000 yen per 10 are (100 m2), while maintaining high levels of rice prices by the gentan (acreage reduction) program. The "door-to-door" of the Farmers' Door-to-door Income Compensation System, named by Ichiro Ozawa who is said to excel at election administration, means to throw a lot of money at farmers.

Meanwhile, from the experience of the 2014 decline in rice prices, the LDP, which abolished the Door-to-door Income Compensation System, provides government subsidies to farmers for the production of rice for animal feed that generates next to no revenue at the same level of income farmers would have gained if they had continued growing rice as the staple food to increase production of rice for animal feed and decrease the supply of rice as staple food in an attempt to maintain higher rice prices.

Consequently, owing to the reduced supply of rice, though it is said that the "gentan (acreage reduction) program has been abolished" (fake news spread by the Abe Cabinet), restaurants complain that they cannot obtain low-priced rice for direct human consumption for business use. The Ministry of Finance has also made the criticism that the financial burden is too large. However, the Ministry of Agriculture, Forestry and Fisheries and lawmakers affiliated with farm organizations who consider "farmers above everything else" pay no heed.

On the contrary, the LDP argues that it has restored and raised higher the budget amount of agricultural public works spending (named the "Improvement of Agriculture and Agricultural Village Program") that had once been drastically reduced to one third by Ichiro Ozawa to generate funds for the Farmers' Door-to-door Income Compensation System. LDP Secretary-General, Toshihiro Nikai, happens to be the chairman of the National Federation of Land Improvement Associations, which has continued campaigning for the restoration of agricultural public works spending.

Candidates of the ruling and opposition parties also disapprove trade liberalization. Every candidate is opposed to reducing tariffs and lowering prices of agricultural and food products.

JA, which rounds up farmers' votes, is an organization that has grown into Japan's second largest megabank by keeping hold of inefficient small-scale part-time farmers with high rice prices and utilizing their dual income as deposits. Should candidates advocate to reduce prices of agricultural products, especially of rice, they would turn JA against them giving over the farmers' votes to their opposing candidates.

The LDP did not cut tariffs on major agricultural products such as rice in the TPP negotiations. Instead, it set a tariff rate quota or import quota on rice at low tariffs from the U.S. and other countries. But by adopting measures to buy rice from the domestic market in the same amount as imported rice (which means that the amount of supply and price of rice in the domestic market do not change), the LDP dealt with the negative impact of rice imports by financially shouldering the cost so that rice farmers would be completely unaffected.

Furthermore, the LDP took excessive compensatory measures, providing even prosperous benefits for beef and pork on which tariffs will be lowered. In the Japan-US trade talks currently underway, the LDP upholds not to make concessions in tariffs any more than it has in the TPP.

Candidates of the ruling and opposition parties agree on this point. Those of the opposition parties advocate provision of more benefits.

If tariffs were eliminated, the burden of higher consumption tax on the public would not increase

The policy to protect agriculture by these tariffs means nothing more than having the public and consumers buy agricultural and food products at higher prices than international pricing.

Many politicians have opposed increasing the consumption tax, questioning regressivity with the poor paying higher prices for food. A lower tax rate on food products is also scheduled to be introduced.

On the other hand, the maintaining of agricultural policies, which are like a mass of regressivity driving up food prices by tariffs, is in the national interest for politicians of the ruling and opposition parties, including those putting forward slogans such as "people's livelihood first" and "focusing on household finances."

The Organization of Economic Co-operation and Development (OECD) runs the number on Japan's agricultural protection by tariffs at 4 trillion yen. Since consumption tax of 1% is comparable to 2 trillion yen, 4 trillion yen would correspond to 2% consumption tax. In other words, if on the one hand tariffs are abolished, enabling consumers to buy agricultural and food products at low prices and alleviating their financial burden, then on the other hand, the consumption tax may be raised from 8% to 10% and contribute to fiscal reconstruction without causing any increased burden on the public.

Of course, it would be necessary to provide direct payments to full-time farmers who live only off agriculture, as the European Union (EU) has been doing. But, less than one fifth of the 400 billion yen of government subsidies for rice acreage reduction that will be abolished would suffice for the payments. Financially, it would significantly reduce the public burden.

Unfortunately, however, politics does not move this way.

The Asahi Shimbun and the University of Tokyo made an analysis on the House of Representatives election in which the LDP returned to power. They analyzed that while almost all qualified voters who voted for the LDP supported the TPP, almost all successful LDP candidates were opposed to the TPP. This is because JA strongly opposed the TPP.

As such, the desires and interests of a certain group, strongly affected by a specific policy, determine the overall policy. The current election system is not one that reflects the will of the nation. Is this the difficulty of democracy?

(This article was translated from the Japanese transcript of Dr. Yamashita's column in "RONZA" on July 8, 2019.)