Japan’s Tobacco Farmers Stop Privatization Plan

A plan by the Japanese government to raise billions of dollars to help fund recovery efforts after the March earthquake and tsunami has been halted by opposition from Japanese tobacco farmers. The plan, approved by Prime Minister Yoshihiko Noda, would have raised $150 billion, $23 billion of which would come from the sales of the state’s 50 percent share in Japan Tobacco Inc.
The proposal, however, has upset Japanese tobacco farmers and the Liberal Democratic Party, currently Japan’s opposition party. Citing Japan’s weakening tobacco industry, which currently provides about .5% of global tobacco leaf production, tobacco farmers are worried that the sale of the government’s stake in the company could remove government protections and force them out of business.
Currently the state offers tobacco farmers valuable protections and mandates that Japan Tobacco Inc. purchase from Japanese farms.
The level of resistance offered by Japanese farmers is striking given their size. The number of Japanese tobacco farmers is expected to drop to about 6,000 this year. Their ability to mobilize political support, however, represents the extraordinary amount of political power held by Japanese farmers and the agricultural sector.
The counterproposal offered by the LDP would sell a portion of the state’s shares in Japan Tobacco, but would retain a 33 percent state ownership.
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Written by: Justin Ellison / Farm Plus Staff Writer