Question 1: Using diagrams, as appropriate, describe the methods used by the Japanese government to protect Japanese rice farmers.
The Japanese government used methods such as providing subsidies and sustaining the 778% tariff on the imports of rice, to protect Japanese rice farmers. With the government supplying subsidy payments, it will support the incomes of the rice farmers. This is important for the farmers as the demand for rice is decreasing causing a great impact on the income of farmers as well as an increase in the price of rice. Also, with the usage of substitute resources for the production of rice, it has increased payments to farmers. The government also continues to keep the 778% tariff on the imports of rice by putting taxes and taking this revenue to pay the farmers. With these methods, the Japanese government is hoping to help the rice farmers as much as they possibly can.
Question 2: Explain the reasons for the decline in demand for rice.
Reasons for the decline in demand for rice include, highest level of rice stockpiles and the aging/declines in the nation’s population. With the decrease in the nation’s population, the demand for rice would decrease as well, causing the farmers to face a shortage. Because there is a decrease in the nation’s population, less consumers are willing to buy the product thus resulting with a shortage. The aging of Japan’s population is a disadvantage to the producers because now the price of the rice has increased causing the majority of the consumers to not be able to buy the rice for its rise in price. Instead of buying these high priced rice, consumers will start to consume a substitute good for rice, possibly bread. As the demand for these bread increase, the demand for the rice will decline.
Question 3: Analyze the advantages and disadvantages of these subsidies for (a) consumers, (b) Japanese rice farmers and (c) overseas farmers.
|Consumers||Japanese Rice Farmers||Overseas Farmers|
|Advantages||————-||Able to sustain their income regardless of their overproduction of rice, and decreasing demand.||——-|
|Disadvantages||The price of the rice will remain high and they are unable to to buy the rice no more.||————-||Tarriffs the government has placed on imported rice is sustained/high thus the oversea farmers will have to pay for that price.|