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Fonterra-funded research by the New Zealand Asia Institute says Japan joining the Trans Pacific Partnership (TPP) could potentially trigger a revitalisation of its agriculture sector.
The independent research was conducted by Professors Hugh Whittaker and Rob Scollay from The University of Auckland. They investigated the potential implications of the TPP on the Japanese agricultural sector, which is a proposed free trade agreement under negotiation between 12 countries including New Zealand. Japan only joined earlier this year.
Professor Scollay said: "The Japanese agricultural sector faces a number of challenges. Many small-scale farms are uneconomic while the average age of Japanese farmers and the area of abandoned farmland are both increasing alarmingly."
Meanwhile falling per capita consumption of Japanese farm products combined with large projected future falls in Japan's population underline the need to transform Japan's agriculture into a more competitive sector with export potential.
"Our research found that participation in TPP could actually be the trigger needed to revitalise and transform Japan's agriculture into a more vibrant and productive sector with long-term growth potential."
Economic modelling indicated that increased exposure to competition through participation in the TPP, and increases in the productivity of Japanese agriculture through reform, could play complementary roles in sustaining agriculture and the food processing industries in Japan.
Fonterra's director policy and advocacy, Sarah Paterson, said Fonterra funded the research because it wanted to ascertain from an independent source the potential impacts the TPP might have on the Japanese agriculture industry after previous opposition coming from the sector.
"Importantly, the study highlights that Japan's agricultural sector could be better off as a result of TPP. We also believe that reducing trade barriers not only benefits their agricultural sector but will have flow on effects to the end consumer as well, where they'll be able to enjoy greater choice and more competitively priced food," says Paterson.
To form their research findings, the professors collaborated with agricultural experts based in Japan, met with a variety of New Zealand and Japanese companies in the sector and analysed data published by Japan's Ministry of Agriculture Forestry and Fisheries.
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