1                                    56140

          Distortions to Agricultural Incentives
                     in Japan, Korea and Taiwan



                             Masayoshi Honma and Yujiro Hayami



                                           University of Tokyo
                                      ahonma@mail.ecc.u-tokyo.ac.jp



                   Foundation for Advanced Studies on International Development
                                       hayami@grips.ac.jp




Agricultural Distortions Working Paper 35, December 2007 (revised September 2008)

This is a product of a research project on Distortions to Agricultural Incentives, under the leadership of Kym
Anderson of the World Bank`s Development Research Group. The authors are grateful for helpful comments from
workshop participants, for invaluable help with data compilation by Johanna Croser, Esteban Jara, Marianne
Kurzweil, Signe Nelgen, Francesca de Nicola, Damiano Sandri and Ernesto Valenzuela, and for funding from World
Bank Trust Funds provided by the governments of Japan, the Netherlands (BNPP) and the United Kingdom (DfID)
as well as the Rockefeller Foundation for use of the Bellagio Conference Center. This paper draws on the authors`
Korea and Taiwan chapter in Distortions to Agricultural Incentives in Asia, edited by K. Anderson and W. Martin,
Washington DC: World Bank (forthcoming 2009). A revised version without the Appendix will appear as Ch. 2 in
Distortions to Agricultural Incentives: A Global Perspective, 1955 to 2007, edited by K. Anderson, London:
Palgrave Macmillan and Washington DC: World Bank (forthcoming 2009).

This is part of a Working Paper series (see www.worldbank.org/agdistortions) that is designed to promptly
disseminate the findings of work in progress for comment before they are finalized. The views expressed are the
authors` alone and not necessarily those of the World Bank and its Executive Directors, nor the countries they
represent, nor of the institutions providing funds for this research project.
    Distortions to Agricultural Incentives in Japan, Korea and Taiwan

                              Masayoshi Honma and Yujiro Hayami1



The story of agricultural policy in Northeast Asia over the past 50 years illustrates the dramatic
changes that can occur in distortions to agricultural incentives faced by producers and consumers
at different stages of economic development. In this study of Japan, the Republic of Korea (the
southern part of the peninsula, hereafter referred to as Korea) and the island of Taiwan, China
(hereafter referred to as Taiwan), we estimate the degree of distortions for key agricultural
products as well as for the agricultural sector as a whole over a period when these economies
transitioned from low- or middle- to high-income status (1955 to 2004 plus, in the case of Japan,
its experience pre- World War II) ­ the beginning of the so-called East Asian economic miracle
of dramatic industrial development.
          Theodore Schultz (1978) established that as economies advance from low- to
high-income status, agricultural policies tend to change from taxing to subsidizing agriculture,
and Japan, Korea and Taiwan are clear examples. We compare the policy evolution in these
economies and provide information on the effect of policies and underlying economic conditions
on changes in agricultural distortions. Our findings shed lights on how agricultural distortions
may change over different stages of economic development in later-developing countries.
        To begin, we give a succinct summary of core characteristics of the three economies in
terms of the nature of their economies, including their resource endowments that determined the
course of their modern economic growth and development. The evolution of agricultural policies
in the three economies is then reviewed before discussing how to measure distortions to
agricultural incentives using the methodology from Anderson et al. (2008), the focus of which is
on nominal and relative rates of assistance (NRAs and RRAs). Implications of our empirical
findings for policy reforms in the three economies are discussed in the final section, where we




1
  This chapter draws on the introductory and country chapters in Anderson and Martin (2008), with data updated
using Anderson and Valenzuela (2008).
                                                   2


also identify lessons for later-developing economies experiencing similar structural
transformations in the course of their economic growth.
       We find that significant agricultural protection growth began when these economies
entered the middle-income stage of economic development. We identify the mechanisms
underlying the growth of agricultural protection. Statistical observations are found to be
consistent with the hypothesis that the success of rapid industrialization that advanced these
economies to the middle-income stage resulted in declines in agriculture`s comparative
advantage associated with the growing income disparity between farmers and employees in
non-agricultural sectors. The demand from farmers for a reduction of farm-nonfarm income
disparity materialized in the form of increased assistance to agriculture. This was manifest
predominantly through rapid and sustained growth in border protection of agricultural products.




Economic development and structural change




The choice of agricultural policies, particularly price-distorting policies, is closely related to the
process of economic development. As identified by Schultz (1978), there are two agricultural
problems -- the food problem-- that underlie policies commonly adopted in low-income
countries that exploit or tax agriculture. These policies contrast to the policies that protect or
subsidize agriculture in many high-income countries seeking to solve the farm problem.
Schultz` hypothesis became an established paradigm among agricultural economists, finding
support in several empirical studies (Anderson and Hayami 1986; Hayami 1988; Krueger, Schiff
and Valdes 1991). More recently, Hayami (2005) and Hayami and Godo (2004) have added the
disparity problem as specific to middle-income economies. They suggest it is important to see
how distortions in agricultural incentives change in all three types of economies over their
different stages of development.
         The most distinguishing characteristic of Japan, Korea and Taiwan during the period we
study is their unusually rapid rates of economic growth and industrial development. In describing
the so-called East Asian Miracle, the World Bank (1993) depicted Japan as the front runner, and
                                                        3


Korea and Taiwan, together with Hong Kong and Singapore, as the second group.2 The ASEAN
nations and China are following behind with rapid rates of economic growth. Since the changing
nature of distortions of agricultural incentives seems to be closely related to the rate of economic
growth and structural change, we provide an overview of the development of the three economies
and associated changes in economic and agricultural structures.


Initial conditions and development strategies


Northeast Asia is characterized by regular monsoon rain, together with mountainous, undulated
topography in which irrigation water could be controlled relatively easily with efforts at the
family and community levels. This makes the region well suited to rice production by small
family farms, commonly called peasants, who were organized into village communities. The
agrarian structure -- established before the modern era -- involved smallholder farms on an
average of about one hectare, predominantly dependent on rice cultivation. It is important to
recognize that, unlike Southeast Asia, large agribusiness plantations based on hired labor were
almost completely absent not only in Japan and Korea, located in the temperate zone, but also in
Taiwan where tropical cash crops such as sugar and banana comprised a significant share of
agriculture. The rural community was traditionally stratified across landlords, land-owning
cultivators and landless tenants prior to the land reforms after the Second World War, but
agricultural laborers subsisting on hired labor wages were not a significant component of the
rural population.
            There is a high degree of similarity in the agrarian structures of Japan, Korea and
Taiwan, due in part to the fact that Japan brought its institutions to its colonies -- Taiwan since
1895 and Korea since 1910. The most fundamental institution was fee simple titles granted to
land owners through cadastral surveys, in return for their payment of land tax. Japanese efforts to
develop the colonies concentrated on agriculture, and especially on rice after Japan experienced a
shortage of supply relative to demand after the so-called Rice Riot in 1918. The promotion of rice
production through agricultural research and extension systems, and irrigation and drainage
infrastructure, plus protection from rice imports from the rest of the world (see Anderson and


2
    On the dramatic transformation of Korea and Taiwan from slow inward-looking economic growth to rapiur
                                                       4


Tyers 1992), was considered a major success from Japan`s viewpoint in that its rice imports from
the two colonies increased from 5 to 20 percent of consumption in Japan between 1915 and 1935.
          The increased export of rice and other primary commodities and the corresponding
inflow of manufactured commodities meant dependency of the Korean and Taiwanese economies
on agriculture remained high. This tendency was especially pronounced in the southern part of
Korea, because Japanese industrial development efforts on the Korean peninsula were
concentrated in the north: hydroelectric power of the Yalu River fed a complex of chemical
industries there that was larger than existed in Japan in those days. The heavy dependency on
agriculture in the south was furthered by urban destruction during the Korean War (1950-53).
          Relative to (South) Korea, commerce and industry were more active in Taiwan. This
was because the larger cash-crop sector there required larger amounts of processing and
marketing activities relative to subsistence crops such as rice and barley. The Taiwan situation
under colonial rule was somewhat akin to Japan from the mid-19th to the early 20th century. The
commercial treaties imposed by Western powers in the mid-19th century deprived Japan of tariff
autonomy. Japan consequently specialized in labor-intensive manufactures based on
farm-supplied materials such as silk reeling, tea processing, and cotton weaving. This accorded
with comparative advantage under virtual free trade. This led to a wide dispersion of small and
medium industries in rural areas in Japan. This small-scale industry in Japan and Taiwan
contrasts with the concentration of Korean industry in large-scale establishments in urban areas.
          This is not the place to discuss why Japan, Korea and Taiwan were able to achieve
remarkable success in economic development as the forerunners in the East Asian Miracle.3
Here it suffices to note that the success of these economies was due to successful borrowing of
technology from advanced economies. Gerschenkron (1962) suggests that the later is the start of
industrialization in an economy, the larger is the scope for economic growth through technology
borrowing from earlier starters. The question still remains, however, as to why Japan, Korea and
Taiwan in particular were successful in technology borrowing among the many late starters.
          One reason is the endowments of cheap but relatively well educated labor in these
resource-poor economies. This made initial borrowing of labor-intensive technologies more
efficient, and the later switching to capital/knowledge-intensive technologies smoother. Another


export-led economic growth, see for example Mason et al. (1980) and Tsiang (1980).
                                                          5


reason is the great crises faced by these economies: Japan`s defeat in the Second World War,
South Korea`s military confrontation with the North, Taiwan`s loss of the Mainland to the
communists. Those crises compelled their leaders to adopt policies to achieve economic success
for the sake of maintaining their legitimacy, instead of indulging in rent-seeking activities
(Hayami and Godo 2005, pp. 275-6).
            Despite much similarity, there were also significant differences in the industrialization
strategy adopted by the three economies, especially as between Korea and Taiwan. In Japan,
although policies were aimed at promoting the development of capital-intensive industries after
the recovery of tariff autonomy in 1911, small/medium industries continued to survive as a major
component of the industrial sector, and many of them located in rural areas. In Taiwan, although
the Nationalist Party tightly controlled formal sectors, there was little government intervention in
the activities of small/medium entrepreneurs, who were able to grow through various marketing
and financial linkages among themselves and with foreign firms. They became very
internationally competitive (Ho 1979, 1982). In contrast, government control in Korea was
stronger and more complete, especially under the military administration of Pak Chong-hui
(1961-79). All formal credits were channeled from nationalized banks to large industry, while
foreign direct investment was tightly controlled (Cole and Park 1983, Amsdae 1989). This
strategy underlay the high concentration of industrial production in a small number of large
enterprises in Korea.


Economic growth and structural transformation

We now turn to a quantitative summary of economic development in Japan, Korea and Taiwan in
the past five decades. Table 1 shows some indicators of economic development. The first three
rows indicate real GDP per capita in 2000 constant prices at purchasing power parity (PPP) in
Japan, Korea and Taiwan, taken from Heston, Summers and Aten (2006). In 1955, Japan`s GDP
per capita was more than $3,000, whereas Korea and Taiwan`s was less than $1,500. Japan
experienced economic growth thereafter, reaching $4,500 in 1960 and $5,000 in 1961. In 1960
Korea and Taiwan had per capita GDP averages of around $1,500, but they had achieved per
capita GDPs of $5,000 by 1978 in Taiwan and 1983 in Korea. Japan reached a level of per capita

3
    For our perspective on such a question, see Hayami (2005, Section 8.4) and Aoki and Hayami (1998).
                                                        6


GDP beyond $10,000 by 1970, and Taiwan and Korea reached that level by 1988 and 1991,
respectively. Roughly speaking, in terms of the growth of per-capita GDP, Japan was ahead of
Taiwan by about two decades and Taiwan was ahead of Korea by about half a decade; although
these margins decreased over time.
         It is convenient to classify the development of the economies into four stages of economic
development as follows:
         Low-income stage ($1,500 or less): 1950 for Japan and before 1960 for Korea and
         Taiwan;
         Lower middle-income stage ($1,500-$5,000): 1950-60 for Japan and 1960-80 for Korea
         and Taiwan;
         Upper middle-income stage ($5,000-$10,000): 1960-70 for Japan and 1980-90 for Korea
         and Taiwan; and
         High-income stage ($10,000 or more): after 1970 for Japan and after 1990 for Korea and
         Taiwan.
The criteria of classification are not universal but are convenient for the comparison of the
economic development in these three economies.4
         Changes in other indicators in Table 1 are closely related with changes in per capita real
GDP over the four stages. The GDP share of agriculture in Japan in 1955-- the lower
middle-income stage -- was 17 percent, which was much smaller than the shares in the
low-income stage for Korea and Taiwan, of 47 and 29 percent, respectively. By 1970 in Taiwan
and 1980 in Korea, the shares had declined to similar levels to that of Japan at the lower
middle-income stage -- 15 percent and 16 percent, respectively. Bt the time Japan entered the
high-income stage in 1970, the agricultural share of GDP had declined to 4 percent, which was
about the same as that of Korea and Taiwan in the 1990s when they entered the high-income
stage.
         Although Korea and Taiwan experienced similar changes in per capita real GDP over the
four stages, significant differences can be observed in their economic structures. The GDP share
of agriculture in 1955 in Korea was nearly 50 percent whereas that of Taiwan was below 30


4
 In terms of real GDP per capita in 2000 constant prices, for example, China exceeded $1,500 in 1990 and $5,000 in
2004 whereas Thailand passed $1,500 level in 1968 and $5,000 level in 1991. For high-income stage, the United
                                                       7


percent, and similar differences can be observed with respect to agriculture`s share of labor force
which was as high as 80 percent in Korea versus less than 55 percent in Taiwan. This reflects
Korea`s higher dependency on agriculture. In both countries, the share of agriculture in GDP
declined significantly over time -- to 3.8 percent in Korea and 1.7 percent in Taiwan by 2004 --
although Korea`s share remained at nearly double Taiwan`s.
          Historical differences can be observed in agriculture`s shares of the labor force in Korea
and Taiwan. Interestingly, however, the difference in the labor force share of agriculture
disappeared by 2004 with about 7.7 percent of Korean employment in agriculture versus 7.5
percent in Taiwan. The relatively faster declines in the labor force share of agriculture in GDP in
Korea reflect its high urban concentration of industries. In Taiwan, characterized by the wide
dispersion of industries over rural areas, farmers increased their incomes from off-farm
employment while continued to be classified as farmers. In contrast, far more rural people in
Korea had to quit farming and migrate to urban areas to obtain non-farm employment. These
differences are reflected in the much faster decreases in the share of farm household population in
total population in Korea relative to Taiwan and Japan.
        The last rows in Table 1 report the ratios of agricultural GDP per worker to the total GDP
per worker. This can be considered an indicator of the relative labor productivity of agriculture to
the total labor productivity of the whole economy. It may also be regarded as an indicator of the
income gap between the agricultural sector and the whole economy. The relative labor
productivity of agriculture in nominal terms was not very different among the three economies in
1955. But in Japan it declined sharply, from 52 percent in 1955 to nearly 25 percent in 1970 and
thereafter. It was not until 1960 that this ratio began to decline in Korea and Taiwan. In Korea it
reached 44 percent in 1980 (from 65 percent in 1960) and stayed nearly constant thereafter. In
Taiwan, the ratio continued to decline to 23 percent in 2000. That is lower than that of Japan,
reflecting the extraordinary abundance of non-farm employment opportunities for farmers in
Taiwan.
        These measures should be interpreted with great care, however. Faster declines in this
ratio in Taiwan relative to Korea appear to indicate faster growth in agricultural labor
productivity in Korea. In fact, however, the declining ratio is due to faster decreases in the


Kingdom and France exceeded $10,000 in 1960 and 1964, respectively, whereas the United States had already
                                                  8


Korean farm labor force owing to faster out-migration of farm labor to urban occupations in
Korea relative to Taiwan. Thus, growth in the labor productivity of farmers engaging in
agricultural activities relative to that of other workers would not have been slower and could have
been even faster in Taiwan if the ratio was calculated using output per hour of labor instead of
output per worker according to the official sectoral labor force classification.


Changes in the structure of agriculture


How did the structure of agriculture in Japan, Korea and Taiwan change in the course of their
economic development? In Japan as of 2004, 2.9 million farm households accounted for 2.6
million workers engaged mainly in agricultural activities. Because the number of workers
engaged mainly in agriculture is less than the number of farm households, some farm households
have no worker engaged mainly in agriculture. Japan`s Agricultural Census defines a farm
household as the one that operates 0.1 hectare or more of farmland, or annual sales of agricultural
products of 150,000 yen (US$1,250 for the exchange rate of 120 yen/$) or more. Thus, very
small units of farm operation, in which no full-time worker engages in farm production, are
classified as farm households. Indeed, full-time farm households having no family member
engaged in non-agricultural employment accounted for 15 percent of total farm households in
2004. On the other hand, non-commercial farm households, which operate less than 30 ares of
farmland or have annual sales of less than 500,000 yen, accounted for 26 percent of total farm
households. Moreover, part-time farm households whose income from non-agricultural sources
exceeds agricultural income accounted for a half of total farm households.
        The number of agricultural workers in Japan declined from 14 million in 1955 to
2.6 million in 2004, but the number of farm households declined only from 6.0 million in 1955 to
2.9 million in 2004. Slow decreases in the number of farm households, together with decreases in
agricultural land(from 6.1 to 4.7 million hectares between 1955 and 2004), resulted in a very
small increase in arable land per farm from 1.01 hectare in 1955 to 1.61 hectares in 2004 (Table
2). The average area of agricultural land per farm in Japan is very small by global standards.
Europe`s are 20 to 45 times larger, and those of the United States are 125 times larger. The slow


reached more than $10,000 in 1950.
                                                  9


growth of small-sized operation has been a key constraint on the growth of agricultural
productivity, resulting in continual declines in the comparative advantage of Japanese agriculture,
particularly of land-intensive activities, in the course of rapid industrial development.
       Table 2 shows that in 2004, 2.9 million farm households in Japan held 9.4 million people
with the average family size being 3.2 persons. In the same year, 1.2 million farm households in
Korea held 3.4 million people and 1.8 million hectares of arable land with the average family and
farm sizes being 2.8 persons and 1.5 hectares, respectively. In Taiwan, 0.72 million farm
households held 3.2 million people and 0.84 million hectares of arable land with the average
family and farm sizes being 4.5 persons and 1.2 hectares, respectively. It is notable that the
number of people in farm households in Korea declined at a much faster rate than in Japan and
Taiwan, which was the result of faster decreases in both the number of farm households and the
number of persons per household in the former than the latter. These observations reflect the
scarcity of non-farm employment opportunities in Korea`s rural areas, due to its urban-centered
industrialization. Indeed, from 1970 to 2004 the share of agricultural income in the total income
of farm households declined from 32 to 14 percent in Japan and 49 to 22 percent in Taiwan,
whereas in Korea it was as high as 76 percent in 1970 and was still 39 percent in 2004.
       Japan has lost 23 percent of its arable land area over the past 50 years, falling from 6.1
million hectares in 1955 to 4.7 million hectares in 2004. Thus decreases in arable land under
cultivation were a significant contributor to changes in farm size in Japan in terms of arable land
per farm household. Meanwhile, the arable land area in Korea deceased from 2 million hectares
in 1955 to 1.8 million hectares in 2004, and arable land in Taiwan remained almost constant
(0.87 million hectares in 1955 and 0.84 million hectares in 2004). Farm-size changes in Korea
and Taiwan were almost exclusively the result of changes in the number of farm households. In
Japan and Korea, average farm sizes increased slowly from 1.0 and 0.9 hectares in 1955 to 1.6
and 1.5 hectares in 2004, respectively, whereas the farm size in Taiwan remained almost constant
during this period. The faster increase in farm size in Korea, relative to Taiwan, was the result
again of faster out-migration of farm workers and their families to urban areas owing to more
urban-centered industrialization in Korea.
       The distinct characteristic of industrialization in Korea is clearly reflected in its high share
of agricultural income in total farm household income. In all three economies, this ratio
decreased as off-farm employment for the members of farm households increased. In Japan, the
                                                   10


ratio decreased from 70 percent in 1955 to 32 percent in 1970 and further to 14 percent in 2004,
corresponding to the shift from the lower middle-income to upper middle-income stage of
development and then to the high-income stage. In Taiwan this ratio was already below 50
percent in 1970 when its economy was in the lower middle-income stage, and it went down to 22
percent in 2004. In contrast, in Korea the ratio was 76 percent in 1970 and it was still nearly 40
percent in 2004, which is not only higher than in Taiwan but is also higher than in Japan at
comparable development stages.
          Major differences in the adjustments of agriculture to economic growth based on
industrial development are also reflected in changes in the commodity mix of farm production.
Rice was traditionally the most important crop in all three economies, but its importance declined
as per capita income increased. However, changes in its relative importance were different. From
1960 to 2004, the share of rice in the total value of agricultural production in Japan declined from
47 to 23 percent and in Korea from 59 to 28 percent. In contrast, the share of rice in Taiwan was
originally lower at 37 percent in 1960 and it decreased rapidly to as low as 7 percent by 2004.
Such a contrast reflects the fact that Taiwan`s agriculture traditionally depended less on rice
because of its greater opportunity to grow cash crops and, also, its success in achieving greater
agricultural diversification toward high-valued commodities such as vegetables, fruits, poultry
and pigmeat more efficiently than Japan and Korea in response to the shift in domestic demand
for more income-elastic commodities.




Evolution of agricultural policy




We now outline changes in agricultural policies in Japan, Korea and Taiwan after the Second
World War.


Japan5



5
    This section draws heavily on Hayami (1988).
                                                 11


Before the mid-1950s Japan tried hard to recover from the devastation of the Second World War.
The primary emphasis of agricultural policy was on increasing domestic food production and
delivering food equitably at low costs to consumers. To this end, the government invested heavily
in agricultural research, extension and land infrastructure and, at the same time, placed rigid
controls on rice procurement from farmers and delivery to consumers under the Food Control
Laws enacted during the War.
       Right after the Second World War, land reform was carried out in accordance with the
strong recommendations of the occupying authorities. The urgent need to increase agricultural
production through increased production incentives to cultivators was sufficiently strong to
overcome the opposition of landlords against strengthening of the rights of tenants through
government control of rents and land prices. During the four years from 1947 to 1950, the
government purchased 1.7 million hectares of farmland from landlords and transferred 1.9
million hectares, including state-owned land, to tenant farmers, which amounted to about 80
percent of the land under tenancy before the land reform.
       Although land reform resulted in a considerable change in the distribution of land
ownership, the size distribution of operational holdings experienced no basic changes. As a result
the traditional agrarian structure of Japan, characterized by small-scale family farms with an
average size of about l hectare, remained despite the rise and the fall of landlordism (Table 2).
There is no doubt that the land reform promoted more equal asset and income distribution among
farmers, and hence contributed to social stability in Japan`s rural sector. However, land reform
did not induce changes in the basic direction of technological developments, because small-scale
family farms continued to be the basic unit of agricultural production. Land reform contributed to
an increase in standards of living and consumption levels, but its contributions to capital
formation and productivity growth in agriculture were not significant (Kawano 1969).
       As Japan set off on its miraculous` economic growth in the mid-1950s, agriculture began
to face serious adjustment problems. The rate of growth in agricultural productivity, which was
rapid by international standards, was not rapid enough to keep up with growth in the industrial
sector. The intersectoral terms of trade did not improve for agriculture during the 1950s after the
end of the Korean War. This was partly because of the pressure of surplus agricultural
commodities in the United States and other exporting countries, and partly because the domestic
demand for major staple cereals (especially rice) approached saturation after the bumper crop of
                                                 12


1955. As a consequence, incomes and living standards of farm households lagged behind those of
urban households during the 1950s..
       In 1961 real GDP per capita in Japan exceeded $5,000, which meant Japan entered the
upper middle-income stage of economic development. Correspondingly, the major goal of
agricultural policy shifted from increased production of food staples to reducing the rural-urban
income gap. The need to assist farmers increased in the 1960s, as the rural-urban income gap
progressively widened and the out-migration of agricultural labor accelerated. The difficulty of
structural adjustment in agriculture as a result of the rapidly growing economy led to the
enactment in 1961 of the Agricultural Basic Law, a national charter for agriculture. This Law
declared that it was the government`s responsibility to raise agricultural productivity and thereby
to close the gap in income and welfare between farm and non-farm people.
       In order to raise agricultural productivity and to improve farming efficiency, it was
considered essential to increase the scale of farm operation by eliminating inefficient farm units
and by promoting cooperative operations among remaining farms. Despite such efforts at
structural adjustment, the rate of agricultural productivity growth was not increased sufficiently
to prevent the rural-urban income gap from widening further. In such a situation the Food Control
System, which was originally designed to provide food security to consumers, became the major
instrument to protect farmers. Under the Food Control System, based on the Food Control Law of
1942, most food items were placed under direct government control. However, as the Japanese
economy recovered from the war, the number of items under control was reduced so that rice
alone remained under direct control after 1952. Rice was directly controlled in its distribution.
Initially, the whole marketing process of rice from producers to consumers was under direct
control of the Food Agency and prices were regulated from the farm-gate to the retail level,
although the regulations were gradually relaxed.
       After Japan entered the upper middle-income stage in the 1960s, the Food Control System
became a powerful instrument for rice farmers, and they organized political lobbying to raise rice
prices for government purchases. Their pressure resulted in a rice price determination formula in
1960 called the Production Cost and Income Compensation Formula` under the Food Control
System. This formula was designed to reduce the gap between farm and non-farm income and
wages by raising rice prices. This goal appears to have been achieved: income per agricultural
worker compared to income per worker in manufacturing improved after 1960 following a rapid
                                                    13


rise in agricultural relative to manufacturing prices. The increase in the price of rice, which
constituted about 40 percent of the total value of agricultural output before 1970, was a major
factor in improving the domestic terms of trade for agriculture. The rise in agricultural prices,
together with increases in off-farm income, resulted in a marked reduction in the income per
capita gap between agricultural and non-agricultural households.
       Protecting rice farmers through a price policy was possible in Japan because rice trade
was completely controlled by the state-trading system. During the 1960s the price of rice was
raised not only far above the world price but also above the market equilibrium price under
autarky. At the upper middle-income stage, Japan was able to let consumers and taxpayers
shoulder the costs of agricultural protection.
       However, there was a limit on increasing agricultural protection through price policy. The
high protected prices of rice resulted in an expansion of rice production in excess of
consumption. The accumulated surplus of rice in government storage forced the government to
introduce controls on rice acreage in 1969, which are still in place today. Further, the dramatic
increase in income and wages of industrial workers after 1960 meant their diet changed. Average
consumption per industrial employee (deflated by the consumer price index) doubled in the
1955-70 period, and again in the following decade and half. Correspondingly, rice was no longer
a major wage good for industrial workers. To cope with the increasing rice surplus, the Food
Control System was revised. The direct control on rice distribution was relaxed by introducing
non-government distribution channels. Finally in 1995 the Food Control Law was replaced by the
Staple Food Law, whereby the role of government was limited to stock holding operations for
food security, although state-trading of rice is maintained for international trade.
       Real GDP per capita in Japan exceeded $10,000 after 1969. As the economy advanced to
the high-income stage, demand for agricultural protection from the farm bloc increased. Japan`s
comparative advantage continued to shift away from agriculture to industry, while internal
resistance to protectionism declined because the non-farm population became affluent and, hence,
less resistant to shouldering the cost of agricultural protection in the form of high food prices or
subsidies to farm producers. However, while internal resistance weakened, external pressures for
liberalization of agricultural imports increased.
       Under the Uruguay Round Agreement on Agriculture, Japan had to adjust agricultural
policies to be more consistent with the globalization of the economy. Following the agreement, in
                                                          14


1995 Japan converted non-tariff border measures to tariffs for 28 commodities. At the beginning
of implementation, rice was exempted from tariffication in compensation of larger minimum
access imports of rice, namely 4 percent of domestic consumption in 1995, rising to 8 percent by
2000. However, Japan adopted tarriffication for rice in 1999, so the minimum access imports
remained at 7.2 percent of domestic consumption.
          Becoming a member of the World Trade Organization (WTO) in 1995 forced the
government to reform domestic agricultural policy. In 1999 the Basic Law on Food, Agriculture
and Rural Areas was enacted as a replacement for the 1961 Agricultural Basic Law. Four years
earlier the Food Control Law was abolished in 1995 to liberalize the domestic rice market. The
1999 Basic Law obliged the government to draft a Basic Plan for Food, Agriculture and Rural
Areas for the promotion of the comprehensive and systematic implementation of policies on
food, agriculture and rural areas. The plan is supposed to be redrafted every five years. Under the
current Basic Plan, made in 2005, a key point of the new agricultural policy is to target
government assistance to farmers who satisfy certain conditions, especially on minimum farm
size. That is, it compels farmers who want to continue farming under government assistance to
expand the size of their farm operation.


Korea6


Before 1960 Korea was a low-income country, with per-capita income below $1500. Its economy
was left severely damaged by the Korean War. The agricultural policy adopted in this stage
aimed to maintain low domestic consumer prices for staple foods, notably rice and barley, as well
as for fertilizer. The Grain Management Law, enacted in 1950, gave the government the authority
to regulate the price of staple foods. However, government control was not very effective during
the 1950s since the market share of government-controlled rice was less than 10 percent. The
government was supposed to purchase grain directly from farmers, but they were unable to
purchase sufficient amounts due to budgetary constraints and upward spiraling grain prices due to
inflation in the mid-1950s. Schemes to collect rice as land tax in kind and to barter fertilizer for
rice were initiated. The former was successful but the latter was not because the implicit price of


6
    This section draws heavily on Moon and Kang (1989).
                                                       15


rice in the barter was lower than the market price. Grain imports from the United States under
Public Law 480, which amounted to 8 to 12 percent of total domestic grain during 1956-65,
helped the Korean government to keep grain prices low.
        In the 1960s, Korea began to launch in a massive way the policies of promoting
industrialization under the development autocracy of Pak Chong-hui. Agricultural policies at this
time were designed to keep the price of staple food crops low so as to maintain low costs of
living and wage rates for industrial workers, rather than maintaining adequate incomes for
farmers. The government purchase prices were below market prices, which were considered
necessary for the purpose of increasing industrial profits and capital formation. Over time, the
Korean government`s price intervention became more intense. The market share of
government-controlled rice was expanded to 20-25 percent during the 1960s, which was used
mainly for maintaining low domestic prices. These agricultural-taxing policies continued in the
beginning of the lower middle-income stage.
        As Korea`s economy quickly advanced toward the upper middle-income stage, the
direction of agricultural policy gradually moved toward supporting farmers. In the early 1970s,
the buffer-stock operation for non-cereal products was set in motion for counteracting their price
declines. In addition to chemical fertilizers, pesticides and farm machineries were added to the
list of subsidized inputs (alleviating the adverse impact on farmers of import protection to
manufacturers of those inputs). The government`s purchase prices for rice and barley were
steadily raised with the aim of increasing food production as well as reducing the urban-rural
income gap. Although the government raised the producer prices for staple food grains, it did so
without a comparable rise in the market prices of rice and barley in order to prevent the cost of
living and the wage rate of industrial workers from rising. Likewise, it assisted livestock
producers in part by using import quotas rather than tariffs to protect them from import
competition, with the rent from those quotas being captured by the producer-managed meat
import agency.7
        The implementation of the two-price system, however, conflicted with the need to
maintain financial and monetary stability. As the difference between the purchase and sale prices


7
 This drove a small wedge between the nominal rate of assistance for producers and the consumer tax equivalent for
beef (Anderson 1986). This was very similar to the scheme operating in Japan in the 1970s. On why the government
                                                         16


of rice and barley widened, the deficit of the grain management fund increased. Since a large
portion of this deficit was financed by long-term overdrafts from the Bank of Korea, this policy
became a major addition to inflationary pressure. Expansion of the government deficit due to the
two-price policy became a serious constraint on the policy.
         Upon entering the upper middle-income stage in the 1980s, the Korean government took a
step toward reducing both tariff and non-tariff protection for manufacturing industries. In
contrast, agricultural policies toward protecting farmers were strengthened. The producer prices
of farm products were increased to levels far above border prices by means of quantitative import
restrictions on most agricultural commodities.
         After Korea entered the high-income stage in the early 1990s, significant policy changes
in were mostly related to the Uruguay Round Agreement on Agriculture (URAA) stipulated in
1995. According to the provisions of the URAA, all of Korea`s quantitative restrictions were
converted to tariffs for all agricultural products except rice. In the Uruguay Round negotiations,
Korea retained the status of a developing country, which gave it special treatment in
implementing commitments to reduce border protection. The agricultural products under
tariffication were subject to a protection reduction commitment of 24 percent on average within
ten years, with the minimum cut of 10 percent. Tariff rates of Korean agricultural products were
over 60 percent on average. Tariffs on products which were considered particularly important in
Korea were cut by the minimum rate of 10 percent.
         In addition, imports of many agricultural products began under the minimum market
access commitment. This commitment required that for all agricultural products, at least
3 percent of consumption must be purchased from overseas in the first year and the import share
must increase annually up to 5 percent of consumption within ten years. Low tariff rates were
applied to the in-quota volume so as to guarantee easy market access from exporting countries.
Many key agricultural products such as rice, barley, orange, red pepper, garlic, and onion began
to be newly imported under this commitment.
         Rice, the most important item for Korean agriculture, was temporarily exempted from
tariffication as provided in Annex 5.B of the URAA. As an exception, rice was subject to an
import quota, beginning with 1 percent of total consumption and gradually increasing up to 4


chose that scheme rather than a more efficient equally-protective tariff plus a consumer subsidy funded by the tariff
                                                      17


percent in 2004, the final implementation year. If Korean rice had not been exempted from
tariffication, Korea would have complied with the standard market access commitment of from 3
percent to 5 percent. The temporary exemption from tariffication expired in 2004, but Korea
opted to continue invoking a rice exemption from tariffication for another 10 years, to 2014.


Taiwan8


After World War II Taiwan suffered from high inflation rates, serious shortages of food and other
necessities, and a heavy defense burden. The government gave the highest priority to economic
stabilization, food production increases, and the repair of war damages. To alleviate the intense
population pressure on limited land, it decided to grant incentives to farmers. Together with the
land reform program implemented between 1949 and 1953, war-damaged irrigation and drainage
facilities were repaired, fertilizers and other farm inputs were made available, and farmers`
organizations were strengthened.
        In the recovery stage of the Taiwan economy the Sino-American Joint Commission on
Rural Reconstruction (JCRR), established in Nanking in 1948, played an important role. JCRR
served as a non-permanent agency for the postwar rural reconstruction of China. From 1951 to
1965 the United States provided a total of $1.5 billion in aid. Approximately one-third went to
agriculture, which was used to build infrastructure and foster human resources for agriculture.
Also, substantial imports of U.S. aid-financed commodities and increases in domestic production,
especially of food, helped relieve demand pressures.
        In the low-income stage of economic development (before 1960), agricultural policy in
Taiwan was designed mainly to supply rice at low stable prices to non-farm population. In those
days two important taxes were imposed on farmers: the farm land tax and the hidden rice tax.
This was done by means of compulsory rice purchases and the rice-fertilizer barter system. The
compulsory purchase of paddy from landowners at official prices was another source of
government-control over rice. All the paddy lands were subject to the paddy land tax plus the
compulsory procurement of rice. The compulsory procurement was assessed on the basis of tax
units determined by land productivity. The difference between the government procurement


revenue is discussed in Hayami (1979) and Anderson (1983b).
                                                           18


prices and farmers` market prices constituted a hidden tax on paddy landowners who were mostly
farm operators after the implementation of land reform program. The hidden tax was gradually
reduced as per-capita income rose, but it continued to exist until its abolition in 1973.
          The government`s rice collection by all of these methods during 1950-70 averaged 50 to
60 percent of the total amount of rice produced minus farmers` home consumption. By 1973,
however, this share had declined to 20 percent. In subsequent years it increased again because of
the implementation of the guaranteed rice price policy. The total of this hidden rice tax was larger
than Taiwan`s total income tax before1963 and was more than twice the farm land tax before
1961, except in 1954. After 1961, when Taiwan moved to the lower middle-income stage, the
hidden rice tax decreased rapidly: the ratio of the hidden rice tax to the total income tax was only
8.5 percent in 1971 (Kuo 1975).
          Agricultural policy geared to exploit agriculture for the sake of supporting industrial
development (and military development) largely ended during the 1970s, when the shift to
subsidizing agriculture began. This was the period when Taiwan rapidly expanded its
labor-intensive light industries in response to increases in export demand. Because many light
industries such as garments and footwear were located in rural areas, non-farm incomes became
increasingly more important to farm households. Taiwan farmers were able to take advantage of
employment in manufacturing without leaving home and, also, many of them engaged in
non-farm self-employed activities in less-busy farm seasons. Therefore, the need for farmers to
rely on agricultural protection policies was smaller than in Korea.
          It was 1978 when Taiwan entered the upper middle-income stage with its real GDP per
capita exceeding $5,000. Still, to help equalize the income level of farm workers with that of the
rapidly expanding industrial sector, the government offered loans and subsidies for promoting
farm mechanization, which were designed to raise farmers` labor productivity. At this time the
growth of rice production began to slow down in response to an increased emphasis on livestock
and fishery products and high-value export crops. Increases in industrial employment also were
pushing up the costs of farm labor. Labor productivity in agriculture continued to lag behind that
of the industrial sector, and the gap between farm and non-farm per capita incomes was
increasing, especially for farmers who relied mainly on rice production. The problems faced by


8
    This section draws heavily on Mao and Schive (1995).
                                                 19


Taiwan agriculture were similar to those that many other industrial countries experienced at a
comparable development stage, especially Japan in the early 1960s and Korea in the late 1970s.
       In Taiwan, per-capita consumption of rice fell from 140 kilograms per year in 1968 to
74 kilograms in 1988. Correspondingly, an accumulation of the rice stock became a serious
problem. In order to reduce production, farm extension workers encouraged farmers to plant
other crops in rice fields, but their efforts were not successful because no economic incentive was
provided. A six-year rice-crop substitution plan was inaugurated in 1984 that gave direct
subsidies of 1 metric ton of paddy rice per hectare to farmers who shifted their rice fields to corn
or sorghum, or 1.5 metric tons of paddy rice per hectare to farmers who shifted to crops other
than corn and sorghum. In addition, corn and sorghum were purchased by the government at
guaranteed prices. Under the program, rice production declined to 1.84 million metric tons in
1988, which was smaller by 0.9 million metric tons than the peak of 1976. The paid-in-kind
subsidy was changed to a cash payment in 1988 to improve efficiency in the management of the
program.
       Taiwan entered the high-income stage in the late 1980s with its real GDP per capita
exceeding $10,000 from 1988. The most important changes in agricultural policy in Taiwan in
the high-income stage were related to its accession to the WTO that became effective on 1
January 2002. In line with the level of economic development, Taiwan agreed to bring its tariff
rates to a level between those of Japan and Korea. Taiwan agreed to reduce its tariffs from the
average nominal tariff rate of 20 percent in 2001 to 14 percent in the first year of its accession
and to gradually reduce it to 12.9 percent by 2004. The target date for tariff reductions was 2002,
except for 137 items that are under tariff rate quotas (TRQs). Of the 41 products that were under
import quota restrictions before accession, 18 were moved to tariffication after WTO accession.
Rice received a special exemption and the remaining 22 items are governed by the tariff rate
quota regime.
       Similar to Korea, the special treatment of rice is based on the rules of Annex V of the
URAA. The quota of rice imports was set in 2002 at 8 percent of the average domestic
consumption between 1990 and 1992 (144,720 tons of brown rice). By negotiation, this amount
was divided into governmental and private import quotas. The government rice quota (65 percent
of rice imports) was subject to the same treatment as rice purchased from local growers. The
imported rice cannot be exported for food aid nor can be used for animal feed. The remaining (35
                                                 20


percent) was imported by private firms and was allocated on first-come-first-serve basis. For both
private and government quotas, there is a ceiling on the price mark-up of NT$23.26 per kilogram
for rice and NT$25.59 for rice products when they are sold on the domestic market. If the sale of
quota rice is slow, the price mark-up can be cut by NT$3 every two weeks. The mark-up
reduction can be continued until all of the quantities are sold out.




Measurement of distortions to agricultural incentives




The main focus of the present that create a gap between domestic prices and what they would be
under free markets. Since it is not possible to understand the characteristics of agricultural
development with a sectoral view alone, the project`s methodology not only estimates the effects
of direct agricultural policy measures (including any distortions in the foreign exchange market),
but also generates estimates of distortions in non-agricultural sectors for comparative evaluation.
Specifically, this study computes a Nominal Rate of Assistance (NRA) for farmers including an
adjustment for direct interventions on inputs such as border protection on fertilizers. It also
generates an NRA for nonagricultural tradables, for comparison with that for agricultural
tradables via the calculation of a Relative Rate of Assistance (RRA ­ see Anderson et al. 2008).
       The commodities for which we calculate a NRA include rice, wheat, barley, soybean,
beef, pigmeat, poultry, egg, and milk for Japan and Korea. For Taiwan, we calculate estimates for
rice, wheat, beef, pigmeat, poultry, and egg. Domestic prices are converted to US dollars using
market rates of foreign exchange rates except for 1955-64 in Korea and for 1955-61 in Taiwan,
for which the shadow exchange rates estimated for Korea by Frank, Kim and Westphal (1975)
and for Taiwan by Scott (1979) are used to take into account the distortions to the foreign
exchange market in early years. Aggregate NRAs on output for each county are calculated using
weights based on domestic production of commodities valued at undistorted prices.
       In addition to the commodities above covered in this study, several other crops are
included in the calculation of RRAs for Japan and Korea. These include apple, cabbage,
cucumber, grape, mandarin, pear, spinach, strawberry, onion, and sugar for Japan, and cabbage,
red pepper, and garlic for Korea. The estimates for these products come from the OECDs
                                                        21


estimates of producer and consumer support estimates, PSEs and CSEs (OECD 2007). The data
for these crops are available only since 1986. We assume distortions of those crops prior to 1986
were at the level of 20 percent in Japan and 90 percent in Korea of the NRAs for the available
covered products.
        The percentage of agricultural output covered in this study is between 55 and 70 (valued
at undistorted prices). It is difficult to judge the levels of NRAs for the residual products. We
assume it is made up of the following share trends (at distorted prices) between 1955 and the
present: import-competing 50 to 80 percent and non-tradables 50 to 20 percent in Japan and
Korea. Distortions of the residual products are assumed to be zero for non-tradables, and the
same as that of the 11 (Japan) and 4 (Korea) OECD products for import-competing products. For
Taiwan, we assume that the distortions of all the non-covered residual products are zero, because
most of them are non-tradable or exportable.
        To compute the RRA, we estimate the NRA for non-agricultural industries. For the latter,
weighted tariffs were available in only selected years for Japan, Korea and Taiwan. We linearly
interpolated for the years between those for which the data are available. For the early years the
tariff rates are estimated as total tariff revenue divided by value of imports. Assuming the
exportable industries receive no assistance, the weighted average tariff is multiplied by the share
of import-competing industries in the value of all non-agricultural tradables. This procedure is
likely to underestimate assistance to non-agricultural industries, especially in Korea where
subsidized credits to target industries were the major form of assistance.
        The estimation results for nominal and relative rates of assistance (NRA and RRA) to
selected commodities are summarized in five-year averages in Tables 3 and 4 for Japan, Tables 5
and 6 for Korea, and Tables 7 and 8 for Taiwan.9 Annual movements of the RRA are shown in
Figure 1 to compare protection patterns in the three economies of Japan, Korea and Taiwan.


9
  The NRAs for commodities are different from those estimated by OECD. Major differences between our study for
NRA and OECD study for PSE are two-fold: (1) our domestic prices are wholesale prices whereas OECD uses
farm-gate prices for PSE and prices paid by consumers at the farm-gate level for CSE; and (2) border prices in our
calculations are based on the study in Anderson and Hayami (1986) whereas OECD uses a different set of reference
prices. . The fact that the producer price was often above the wholesale (consumer) price in the case of grains and
soybean in Japan and Korea is captured by setting the NRA equal to the measured CTE times the ratio NRA/CTE in
Anderson, Hayami with associates (1986) and Anderson (1989) for the period to 1985 and times the negative of the
ratio PSE/CSE in OECD (2007) for the period from 1986. Most differences in NRA between OECD and our
measures come from the differences in border prices. For example, our border price of rice is common for Japan and
Korea as the world import unit value adjusted by a quality coefficient. But OECD`s border price of rice in Japan is
                                                        22


        Japan`s RRA was 13 percent in 1955 when Japan was in the lower middle-income stage
of economic development. But it soon rose to the 30-40 percent range in the 1960s when Japan
entered in the upper middle-income stage. However, the RRA of Korea and Taiwan, both in the
low-income stage in the 1950s and the lower middle-income stage in the 1960s, were at very low
levels, involving negative rates for some years before the mid-1970s.
        After Japan entered the high-income stage in the 1970s, it increased its RRA steadily
except during the period of the World Food Crises in 1973-4. It reached a peak in 1994,
although this year followed a bad rice harvest (one-quarter below average). Japan`s RRA was
within the 100-150 percent range after the mid-1980s, except in 1994.
        In Korea the rapid rise of agricultural assistance began in the late 1970s when the country
moved from the lower to the upper middle-income stage. Taiwan followed Korea with an
increase in the RRA, but the difference in the level of the RRA between the two economies
continued to be significant during their upper middle-income stage. It is interesting to see that
Taiwan was behind Korea in terms of the RRA level until the mid-1990s. After this time,
however, Korea`s RRA fell. After Korea and Taiwan entered the high-income stage in the 1990s,
a relatively high RRA was maintained although there were some fluctuations in both economies.
        The wide fluctuations in the RRA in the late 1990s were caused by the currency crises in
Asia that began in 1997. This resulted in a sharp decline in the RRA in Korea in 1997 and 1998.
Sharp increases in Taiwan`s RRA in 1999 and 2000 were caused by shortages of livestock
products due to the September 1999 earthquake and reduced production of pigmeat resulting
from the spread of foot-and-mouth disease among pigs in 1997. Although the paths of the RRAs
were different during the middle-income stage, both Korea and Taiwan started at slightly
negative protection levels in the low-income stage in the 1960s and reached very high RRAs
(about 120 percent in Korea and 70 percent in Taiwan) by the beginning of the new millennium.



based on the price of rice imports by Japan and that for Korea is China`s export price of rice adjusted by
transportation costs and, from 2001, average import prices of rice from China, the U.S. and Thailand. This makes our
series of NRAs for rice more stable than that of OECD`s in recent years. This also explains the stability of our NRA
for Korean rice compared with that of OECD`s. For meat products also the border prices are different. In the
estimation of NRAs for beef, pork and chicken the OECD uses basically the meat data of the US or Canada for
border prices while we use Japan`s import price for beef and unit values for pork and chicken (or Hong Kong import
prices for the 1950s). Our approach is preferred for estimating NRAs consistently for longer time periods,
particularly for the period when Korean imports were absent or negligible. Also, our approach is preferred for
comparing the NRAs between Korea and Taiwan on a similar basis for the border prices.
                                                23


        Movements of the NRA for covered farm products are similar to those of the RRA in all
three economies until the late 1970s, when the growth of the NRA in non-agriculture was much
faster, particularly in Taiwan. In contrast to the path of the RRA, Taiwan kept pace with Korea in
terms of the growth of the NRA for agriculture, albeit about ten years behind. Taiwan then caught
up with Japan and Korea at a 150-180 percent NRA in the late 1990s.
        Japan, Korea and Taiwan maintained policies to protect covered agricultural products that
were considered politically important and sensitive. However, the importance of these covered
products declined over time with a smaller share of those commodities in the value of production.
Thus the growth in the RRA was less than that in the NRA because the RRA takes into account
the non-distorted uncovered products whose share in value of production increased.
        Fluctuations in the RRA and NRA consist mainly of changes in the NRA of individual
commodities and changes in the weight of each commodity. In Japan, Korea and Taiwan the
most important agricultural product was rice. Its protection therefore had a large influence on the
RRA. A clear upward trend in the NRA of rice was present in all three economies (Figure 2). In
Japan, the NRA for rice was as high as nearly 100 percent in the 1960s when Japan had already
entered the upper middle stage, whereas it was nearly zero in Korea and Taiwan in the lower
middle-income stage. From the late 1970s when Korea and Taiwan approached the upper
middle-income stage, the rice NRA began to rise sharply and continued to rise thereafter.
        The fastest increases in the rice NRA, however, occurred in Japan from the late 1970s. It
peaked in the late-1980s. The fast increase in the rice NRA in Japan was caused, to a large extent,
by a rapid appreciation of the Japanese yen relative to the US dollar. The border price of rice
declined sharply, but there was no transmission to domestic market prices because of the control
of rice imports by the government. The peak of the rice NRA in Japan was temporarily
interrupted by a bad rice harvest in 1993 which resulted in a shortage of Japonica rice on world
markets. This raised border prices, while domestic prices were kept relatively stable under the
Food Control System. Thereafter, further increases in rice NRA was counteracted by yen
depreciation and also by the acceptance of minimum access obligations in the URAA from 1995
and the later shift to tariffication in 1999.
        In Korea and Taiwan, the rising trend of rice continued after the 1970s. Such increases in
the NRA of rice are a major factor underlying rapid increases in the RRA in Korea during the
upper middle-income stage, because the weight of rice in agricultural production continued to be
                                                 24


high. Korea`s exemption from tariffication in the URAA allowed the NRA for rice to grow even
under the implementation of WTO commitments.
       Similar to the NRA for covered products in Figure 1, Taiwan followed Korea in the
growth of the NRA for rice with a five to eight year lag for the period from the late 1970s to the
mid-1990s. The gap in NRAs for rice between Taiwan and Korea widened in recent years, but the
protection level of rice in Taiwan appears to be maintaining a rising trend.



Consumer tax equivalents on food


The support provided to farmers in Japan, Korea and Taiwan has mostly come via food import
restrictions, but in addition there have been schemes whereby crop producer prices have been
supported above those charged to grain and soybean consumers (including feedmixers providing
livestock producers with animal feedstuffs). Thus the CTE is below the NRA for some crop
products. As a result of that, together with the different weights of various products in
consumption as compared with production, the average NRA for covered products is around 50
percent above the CTE for both Japan and Korea in 2000-04 (compare Tables 3 and 5). Thus
consumers have been spared some of the implicit tax that otherwise would have been imposed on
them had border measures alone been used to raise producer prices above international levels.




Sources of agricultural protection growth




The experiences of Japan, Korea and Taiwan are good examples of policy switching from
exploitation to protection of agriculture when economies grow through industrial development.
This shift is most clearly illustrated by the cases of Korea and Taiwan, whose agricultural
protection levels were negative in the 1950s and the 1960s and began the rise sharply from the
1970s with the success of industrial development.
       In Anderson, Hayami and Honma (1986), the growth of agricultural protection in Japan,
Korea and Taiwan is empirically documented. They draw attention to three characteristics of the
                                                     25


East Asian growth of agricultural protection, based on the nominal rates of protection for
agricultural products, in comparison with other advanced economies: first, the rapid rise over
time in protection rates in the three economies in East Asia; second, the increase in agricultural
protection in East Asia was much faster than for other industrial countries for the period of 1955
to 1980; and third, the highest level of agricultural protection the three economies reached as of
1980 was rivaled only by Switzerland. They also note that the growth of agricultural protection in
these economies during the three decades to 1980 was exceptionally rapid, compared with that of
earlier starters of industrialization in the West. That is, East Asia was not exceptional in having
increasing agricultural protection, but was exceptional in its speed in reaching the world`s highest
level. Figures 1 and 2 indicate that the protection growth in terms of RRA and NRA continued at
the same speed for about 20 years after the previous study period.
        The rapid growth of agricultural protection in industrializing economies was largely
explained by the shift in comparative advantage away from agriculture to industry as the result of
successful industrialization. The decline in agriculture`s comparative advantage increased the
intersectoral resource adjustment costs that had to be shouldered by farmers if left to the
competitive market mechanism. That boosted their demand for agricultural protection. This
problem typically applies where industrial growth has been so rapid that intersectoral adjustments
are not fast enough under free markets to prevent a widening rural-urban income disparity.10
        The association between the rise in agricultural protection and the decline in agriculture`s
comparative advantage was tested in Honma and Hayami (1986) using multiple regression
analysis and a pooled data set for 15 countries at 6 points of time ending in 1980. A strong
correlation was found between the level of aggregate NRP11 and the index of agriculture`s labor
productivity relative to total economy`s labor productivity. According to those results, Honma
and Hayami conclude that the high level of agricultural protection in East Asia resulted not so
much from factors unique to East Asia but mainly from factors common to all industrial
countries.
        However, it should be noted that there are differences in the process of the intersectoral
resource adjustment between Japan and other two economies. In 1955, the first year for our


10
  For more on agricultural policies in the process of economic development, see Hayami (2005) Hayami and Godo
(2004).
                                                         26


investigation, Japan was already in the middle-income stage of economic development and
entering the so-called High Growth Era characterized by extremely rapid industrialization.12
This was associated with a widening income gap between rural and urban households. Japan
increased its agricultural protection soon after it entered the High Growth Era, an era in which
Japan moved from a middle-income to a high-income economy in less than two decades. Japan`s
agricultural protection was raised to a level comparable with that of the European Community
during the 1960s.
         Meanwhile, Korea and Taiwan were still in the low-income stage of economic
development in the 1950s. They entered the middle-income stage early in the 1960s. In the
middle-income stage, productivity growth in agriculture tended to lag behind that of
non-agriculture as a result of successful industrialization. With delays in labor out-migration
from farming, farmers` income levels tended to decline relative to those of non-farmers.
Nevertheless, it was impossible for the government in the middle-income stage to secure
sufficient finance from non-agricultural sectors to raise support for farmers to the extent needed
to close the income gap. This is because agriculture was too large a sector in terms of its shares of
both national income and the labor force. Thus despite growing rural-urban income disparity,
Korea and Taiwan retained low levels of agricultural protection until the late 1970s and the early
1980s, respectively.
         The agricultural problem confronted by middle-income economies like Korea and Taiwan
in the 1960s and 1970s has been called the disparity problem by Hayami (2005) and Hayami
and Godo (2004), referring to the income disparity between farm and on-farm households. The
problem is a lag in productivity growth in agriculture relative to non-agriculture, brought about
by insufficient labor out-migration from farming in response to the successful industrialization
that raised these economies to the middle-income stage. Farmers, who observe non-farm
workers` rapid escape from poverty, begin to realize how relatively poor they are, even if their


11
   Actual data used for the level of agricultural protection in the regression analysis are the nominal protection
coefficients (NPC = 1+NRP/100).
12
   Indeed Japan`s tariff protection for rice began in 1904 and, after 1918 included its colonies of Korea and Taiwan
in what became an imperial rice self sufficiency policy. An earlier set of estimates of the nominal rate of rice
protection suggests it grew from 9 percent in 1903-07 to 21 percent in 1908-12 and 27 percent in 1913-17. It then fell
to an average of 13 percent in 1918-27 with the greater inflow of rice from the colonies, before rising again to 26
percent in 1928-32, 45 percent in 1933-37 and 84 percent in 1938, according to Anderson, Hayami and Honma
(1986). See also Table 7 below for new estimates for an even longer period.
                                                  27


income level did not decrease from the previous stage. The resulting dissatisfaction among
farmers often becomes a significant source of social instability. Once an economy reaches the
middle-income stage, that dissatisfaction becomes a prime concern of policymakers who might
adopt agricultural protection measures to appease farmers and prevent the dissatisfaction
elevating into a serious anti-governmental movement.
       That protection may not be strong enough to close the income gap between farmers and
urban workers until the country graduates from the lower middle-income stage, however.
Because the shares of agriculture in both national income and the labor force are still large, it is
difficult to either (a) raise sufficient revenue from the non-farm sectors to close the growing
farm-nonfarm income gap with direct support payments or (b) pass on the cost of agricultural
protection to consumers by raising food import barriers, because increases in food prices erode
real wages paid by the large number of small-scale enterprises that rely heavily on cheap labor.
Faced with the disparity problem, policymakers in middle-income countries are forced to search
for ways and means to protect farmers within the constraint of the food problem that is still
binding because a large number of urban workers are still absolutely poor and so still have a high
share of food in their household expenditure.
       In the early 1990s when all three Northeast Asian economies entered the high-income
stage, the decline in relative agricultural income (in terms of agricultural GDP per worker divided
by total GDP per worker) stopped in Japan and Korea. In Taiwan, the relative agricultural income
continued to decline until recently (Table 1), despite the high level of agricultural protection. The
reason why Taiwan`s relative agricultural income continued to decline was that Taiwan increased
its total economy`s labor productivity more rapidly than agriculture`s labor productivity even
after 1990.
       Agricultural protection in Korea rose faster and to higher levels than in Taiwan and Japan
during the upper-middle income stage. The RRAs in Korea are located significantly above those
of Taiwan and Japan for the same levels of per-capita incomes throughout their upper
middle-income stage (Figure 3). The difference could reflect the different costs of intersectoral
adjustment (corresponding to changes in comparative advantage) that farmers had to shoulder. In
Korea the shift of labor from agriculture to non-agriculture involved the migration for workers
from rural to urban areas, whereas in Taiwan and Japan much of the shift was done by farmers`
increased non-farm activities while continuing to live in their home villages and towns and
                                                       28


farming part-time. Correspondingly, both the pecuniary and psychological costs of intersectoral
labor reallocation were much higher for farmers in Korea.
        In Japan the decline in relative agricultural income ceased in the 1970s when Japan
reached the high-income stage. This was due to a deceleration in the growth of labor productivity
in the total economy after reaching the high-income stage. The Korean experience after 1990 is
likely to be explained by fast increases in agricultural labor productivity resulting from the rapid
out-migration of agricultural labor to urban activities (Table 1).
        The relationship between relative agricultural income and the RRA in Japan, Korea and
Taiwan for 1955-2004 is shown in Figure 4.13 There is a negative correlation for all countries and
all periods, except Korea in 1990 and 2000. The correlation is, however, weak when relative
agricultural income is around 40 percent or more. This corresponds to the low-income and lower
middle-income stages of economic development.
        Korea and Taiwan strengthened their agricultural protection policies in the 1980s when
both economies entered in the upper middle-income stage. This followed Japan`s protection
pattern in the 1960s when the income gap was widening and protection measures were deemed
necessary to close it. Under such circumstances in the upper middle-income economies,
politicians were not able to resist pressure from the farm lobby and thus instituted policies to
prevent farmers` incomes from lagging behind those of non-farm workers.
        In addition, Korea may have had a specific reason for strengthening agricultural
protection, particularly at the farm-gate level. The constant threat of communist aggression from
the north prompted commercial and industrial interests to support farmers and thereby maintain
political stability.
        If the income gap was adequately dealt with during the middle-income stage, problems
caused by agricultural protection in the following upper middle-income stage might have been
avoided. Yet, in academic and policy debate, the disparity problem in the middle-income stage
has received relatively little attention, despite the fact that there are today many economies
attempting to reach the upper middle and high-income stage through industrialization. The
growing income disparity between farm and non-farm populations could become a major source


13
   RRA of 1955-59 average is paired with agricultural GDP per worker relative to total GDP per worker in 1955 and
so on.
                                                        29


of social and political instability elsewhere in Asia, from ASEAN to China and eventually to
South Asia, particularly India.
        In the analysis by Honma and Hayami (1986), it was found that political power in the
agricultural sector is maximized when the share of agriculture declines to 4 to 5 percent of GDP
or 5 to 8 percent of the labor force. Japan has passed this range, Korea recently entered this peak
zone in terms of both GDP and labor force, as did Taiwan in terms of the labor share (having
passed over this zone in 1990 in terms of GDP share). Political economy factors may well
underlie the rise of agricultural protectionism in Korea at the high-income stage after 1990, as
observed in terms of the NRA at the farm-gate level despite no apparent further increase in its
agricultural comparative disadvantage.14




Japan's pre-Second World War experience




          The pattern of agricultural protection growth in Japan, Korea and Taiwan in the era of
East Asian Economic Miracle, as outlined in the previous section, was very consistent with the
hypothesis that rapid protection growth occurred when these economies were in the
middle-income stage under the dictate of the disparity problem described above. Under the
disparity problem, when farmers` income levels tend to decline relative to non-farmers`, the
economy is often characterized by a dual structure: a formal sector consisting of large modern
enterprises and government agencies, and an informal sector consisting of agriculture and other
small/medium-scale enterprises. That was the case for Japan in the half-century before the
Second World War. In this period Japan advanced from the low-income to the middle-income
stage of economic development.
         Japan set upon modern economic growth with the Meiji restoration of 1868 that
transformed its political structure. Japan went from a union of feudal fiefs under the hegemony of
Tokugawa shogun (Tycoon) to a modern nation state in the form of the constitutional monarchy

14
  The shares of Korean agriculture in GDP and the labor force were 3.8 percent and 7.7 percent, respectively, in
2004, while those in Taiwan were 1.7 percent of GDP and 7.5 percent of the labor force in that year (Table 1, rows 2
and 3).
                                                30


under an emperor who was a symbol of national unification without actual ruling power. The
immediate impetus for this political reorganization was the threat of colonization by western
powers that became obvious through the gunboat diplomacy of the United States and the use of
Admiral Perry`s fleet. The national slogan of the Meiji state was to establish fukoku kyouhei (a
wealthy nation and strong army) for the sake of preserving national independence. To achieve
this prime goal, economic policies in Meiji Japan were aimed at the promotion of modern
industries to catch up to the economic power of western nations. Japan at that time was deprived
of the freedom to set import and export duties above 5 percent ad valorem levels according to
unequal commercial treaties signed by the Tokugawa tycoon with Western powers in the
mid-19th century. Thus, industrial promotion policy relied mainly on subsidies in areas such as
the import of machines and factories and the purchase of their designs, the employment of
engineers and skilled workers, and the collection and dissemination of information on overseas
technologies and markets. It was mainly through taxation of agriculture -- through the newly
established land tax system -- that subsidies for industrial promotion as well as for other
modernization measures were financed.
       As the data in Table 6 show, in the early Meiji period (before 1900) the agricultural sector
shouldered about 90 percent of the total direct tax burden, which amounted to about 15 percent of
agricultural GDP. At this time agriculture`s share of the national government`s subsidy amounted
to less than one-quarter, which was less than 5 percent of agricultural GDP. Evidently, at the
beginning of its modern economic growth, Japan adhered to the strategy of promoting modern
sectors through the exploitation of the traditional sectors, which is a strategy commonly practiced
by developing economies when they became independent of colonial powers around the early
1960s. Imbalanced taxation and subsidization as between agriculture and non-agriculture was
even greater than the data of Table 6 reveal, as a disproportionately high share of the population
educated at publicly-financed schools were from non-farm households.
       Under strong promotion by the government, industrialization progressed rapidly in Japan,
especially in the area of labor-intensive manufacturing. Comparative advantage in this sector was
unhampered owing to virtual free trade in the absence of tariff autonomy in Japan.
      Changes in the position of agriculture in the total economy over the course of modern
economic development under the Meiji restoration are summarized in Table 7. The series of real
GDP per capita show that the Japanese economy moved from the low-income to the
                                                 31


middle-income stage by the beginning of the 20th century, with the share of agriculture in GDP
at about 40 percent. This is roughly comparable to Korea and Taiwan`s share of agriculture in
GDP when they advanced to the middle-income stage. Thereafter, Japan remained at the status of
a lower-middle-income economy until the Second World War. Meanwhile, the growth of labor
productivity in agriculture lagged behind that of industry, resulting in a continual decline in the
ratio of labor productivity in agriculture to labor productivity in industry (column 6). This reflects
successful industrial development (as in Korea and Taiwan during the era of East Asia`s
Economic Miracle). Nevertheless, because the terms of trade did not improve for agriculture
throughout the inter-war period (column7), income per-capita in farm households continued to
decline relative to that of farm employees` households, parallel to the declines in
agriculture/industry real productivity ratio (column 8 of Table 7).
      Growing dissatisfaction among farmers in Japan gave rise to strong political lobbying --
organized by the politically powerful landlords -- for reduced tax burdens and increased support
to agriculture. The result was a significant reduction in the tax burden and a greater allocation of
government subsidies to agriculture in the first half of the 20th century. Before the beginning of
the 20th century, landlords were largely satisfied by the government`s support to agricultural
research and extension services and land infrastructure improvements such as irrigation and
drainage systems, which proved to be highly effective in raising rice yields per hectare and
thereby raising land prices and land rents for the benefits of landlords (Hayami and Yamada 1991,
pp. 68-77). However, as comparative advantage continued to be lost from agriculture -- owing to
rapid industrial development -- landlords` demands began to shift toward border protection on
agricultural commodities, especially rice. Their strong lobbying achieved the installation of a rice
tariff at 15 percent ad valorem in the first year of the Russo-Japanese War (1904-05). This tariff
was approved under the excuse of raising government revenue to finance the war. It was
supposed to be terminated at the War`s end, but the landed interests lobbied extensively to make
it permanent in the form of a specific duty. Thereafter, the rice tariff became an issue of a major
public controversy in Japan -- similar to the controversy caused by the Corn Laws in the UK a
century earlier and German grain tariffs a half century later. The imperial Agricultural Society,
representing the landed interests, and the Tokyo Chamber of Commerce, representing the
interests of manufacturers and traders of export commodities, lobbied strongly for opposite ends.
                                                  32


The battle ended with a victory to the landed interests and the successful imposition of a specific
duty on rice at one yen per 60 kilograms.
      This outcome contrasts with the victory of the bourgeoisie in the UK and the repeal of the
Corn Laws in 1846; and resembles the situation in Germany in which tariff protection was
installed on food grains (wheat and rye) in 1879 under Bismarck. Unlike the UK, which was able
to establish itself as the workshop of the world, the comparative advantage of industry was less
certain in Germany, so that industrialists found it advantageous to seek protection on their
products while approving some protections on agriculture. In addition, the rapid growth of the
Social Democratic Party -- a labor party initially based on orthodox Marxist doctrine -- was
considered a common menace by the Junkers and the Industrialists. In fact, the installment of the
grain tariffs and iron and steel tariffs in Germany at the same time was the result of a united
campaign of landlords in Eastern Germany (Junkers) and Industrialists in West Germany
(Gerschenkron 1943). This experience was repeated by other late starters of industrialization such
as France and Italy who tried to match the UK in industrial strength (Kindleberger 1951). Japan`s
protectionist policies were similar: after tariff autonomy was recovered in 1911, Japanese
industrialists actively lobbied for industrial protection, especially in heavy and chemical
industries. They also campaigned for reductions in tariffs on imports of industrial raw materials
such as raw cotton and iron ore (Little, Scitovsky and Scott 1970; Yamazawa 1984).
      As a result, Japan saw the emergence of tariff escalation, with lower rates applied to
materials for industrial processing and higher rates applied to its imports of processed final
products. Although agricultural production was raised by means of increases in food tariff rates,
this was largely paralleled by increases in industrial tariff rates, which can be inferred from the
movements in the average tariff rate for all products compared with the movements in just the
rice tariff rate (columns 4 and 5 of Table 7). However, tariffs were largely exempt on the imports
of raw materials for industrial production, so effective rates of industrial protection were much
higher than the nominal rates implied by the tariff rates. In particular, a zero tariff on raw cotton
was instrumental in making the cotton spinning industry the top foreign exchange earner in Japan
and, at the same time, completely eradicated domestic cotton farming.
      Although the rice tariff was raised successively from 14 percent ad valorem in 1910 to 41
percent in 1935, which with quantitative import restrictions increased the nominal rate of
protection on rice from 21 percent in 1900 to 134 percent in 1935, improvement in the terms of
                                                 33


trade for agriculture was slower than the decline in the agriculture/industry labor productivity
ratio. This resulted in the continual decline of farmers` household income per capita relative to
that of non-farmers` throughout the inter-war period (Table 7). Although agricultural protection
began to increase significantly during this period, it was evidently insufficient to counteract the
loss of agriculture`s comparative advantage owing to rapid industrial development. To undertake
agricultural protection at a scale sufficient to close the widening income disparity, Japan waited
until after the Second World War when the Japanese economy advanced to the upper
middle-income and the high-income stages so that non-agricultural sectors could bear the cost of
agricultural protection. In the early 20th century, the share of food in household consumption
expenditure (the Engel coefficient) was higher than 60 percent. This implies that the elevation of
food prices had a large effect on the cost of living and, hence, on the wage rate of workers, which
caused serious damage to labor-intensive industries, which were then at the center of the
Japanese economy. Indeed, as mentioned earlier, the fear that high food prices would damage
industrial development was a major motive in the Government`s decision to launch rice
development programs in Korea and Taiwan following the rice riot in 1918. This is despite
opposition from landlords in Japan against policies fostering competitors to Japanese rice
farming. The importation of Japonica rice free of tariffs from the two colonies became a major
factor aggravating agricultural depression in Japan during the 1930s.
      The situation changed dramatically after Japan advanced to the upper middle-income stage
in the 1960s as a forerunner of the East Asian Miracle. Although supports on agricultural product
prices were raised rapidly, industrial wage rates were raised even faster, so that the Engel
coefficient fell from 52 percent in 1955 to 31 percent in 1980 and further to 17 percent in 1995
(Hayami and Godo 2002, p. 132). Meanwhile, the center of gravity in Japanese industry moved
from labor-intensive manufacturing to capital- and knowledge-intensive activities. Under this
environment, Japanese industrialists were able to tolerate increases in food prices so as to prevent
farm-nonfarm income disparity from widening. Industrialists found it was to their advantage to
support farmers, to keep them as allies against organized labor and left-wing activities under the
cold war regime (similar to the attitude of German industrialists toward the grain tariff campaign
a century earlier). The major surge of Japan`s agricultural protectionism continued until it was
counteracted by the serious trade frictions with food-exporting countries, particularly the United
States.
                                                 34




Concluding remarks




This chapter examines changes in distortions to agricultural incentives in terms of price
distortions in Japan, Korea and Taiwan in a manner consistent with the methodology in Anderson
et al (2008). Rates of assistance to the agricultural sector are estimated for Japan and Korea for
1955-2004 and for Taiwan for 1955-2002. These are based on estimates of the nominal rates of
assistance for selected individual commodities and the relative rates of assistance (RRA) as
between agricultural and industry. The estimates show that the growth of agricultural protection
in Northeast Asia, together with the decline of industrial protection rates, caused the RRA to rise
there over the five post-War decades under investigation.
       The experience in these three economies can be explained by factors common to rapidly
industrializing economies, especially the high cost of industrial adjustment shouldered by farm
producers in the process of rapid industrial development. However, the agricultural protection
level continued to grow even after 1980 in all the three economies despite apparently decreased
needs for agricultural support to prevent widening rural-urban income disparity.
       All the three economies suffered problems commonly observed in the high-income stage
of economic development, notably a widening income gap between agricultural and
non-agricultural sectors as the economy entered the middle-income stage. If the income gap had
been dealt with more appropriately at the middle-income stage, problems caused by agricultural
protection in the following high-income stage could have been significantly reduced.
       Greater attention needs to be paid to the agricultural problem in the middle-income stage,
the so-called disparity problem. The challenge at that stage of development is to find a
compromise between the conflicting needs to reduce the farm-nonfarm income gap on the one
hand, and the supply of low-cost food to a large number of workers in urban areas on the other,
when the government`s capacity to raise sufficient revenue from non-agricultural sectors is weak
and food import restrictions effectively tax net buyers of food. The somewhat contrasting patterns
of agricultural and industrial growth between Korea and Taiwan led to different solutions to that
problem, which may provide insights for some later-developing economies.
                                               35




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                                                  39


Figure 1: Relative rate of assistance to agricultural versus non-agricultural tradables,a Japan,
Korea and Taiwan, 1955 to 2007

                                               (percent)

              250

              200

              150

              100

               50

                0

              -50

             -100
                 1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007


                                       Korea           Taiw an      Japan




a
 The RRA is defined as 100*[(100+NRAagt)/(100+NRAnonagt)-1], where NRAagt and
NRAnonagt are the percentage NRAs for the tradables parts of the agricultural and
non-agricultural sectors, respectively.

Source: Authors` spreadsheet
                                               40


Figure 2: Nominal rate of assistance to rice, Japan, Korea and Taiwan, 1955 to 2007

                                            (percent)



             900


             700


             500


             300


             100


            -100
                1955 1959 1963 1967 1971 1975 1979 1983 1987 1991 1995 1999 2003 2007


                                    Korea           Taiw an     Japan



Source: Authors` spreadsheet
                                                     41


Figure 3: Relative rate of assistance to agriculture and real GDP per capita, Japan, Korea and
Taiwan, 1955 to 2004

                                 (percent and 2000 constant $ prices)

               250


               200


               150
     RRA (%)




               100                                                                               Japan
                                                                                                 Korea
               50
                                                                                                 Taiwan

                0


               -50                    Real GDP per capita at 2000 constant prices ($)
                     0   5,000        10,000           15,000            20,000         25,000            30,000




Source: Authors` computations
                                                42


Figure 4: Relative rate of assistance to agriculture and relative GDP per agricultural worker,
Japan, Korea and Taiwan, 1955 to 2004

                               (percent and 2000 constant $ prices)




Source: Authors` computations
                                                  43


Table 1: Economic growth and structural transformation in Japan, Korea and Taiwan, 1955 to
2004

                                           1955        1960      1970      1980      1990      2000
Real GDP per capita in       Japan        3,128        4,509   11,391     15,520    21,703    23,971
2000 constant $ pricesa      Korea        1,429        1,458    2,552      4,497     9,593    15,702
                             Taiwan       1,241        1,444    2,846      5,963    11,248    19,184
Share of agriculture in      Japan         17.4         9.0        4.2        2.4       1.7       1.1
GDP (percent)                Korea         46.9         39.1     29.2       16.2        8.9       4.9
                             Taiwan        28.9         28.2     15.3         7.5     4.0       2.0
Share of agriculture in      Japan         33.8         26.8     15.9         9.1       6.2     4.5
economically active          Korea         79.7         60.2     49.1       37.1      18.1     10.0
population (percent)a        Taiwan        53.6         50.2     36.7       19.5      12.8        8.9
Share of farm                Japan         40.7         36.5     25.1       18.3         14       8.2
household popn in total      Korea         61.9         58.2     44.7       28.4      15.5        8.6
population (percent)         Taiwan        50.7         49.8     40.9       30.3      21.1      16.5
Agricultural GDP per         Japan        51.5         33.6     26.4       26.4      27.4      24.4
worker / total GDP per       Korea        58.8         65.0     59.5       43.7      49.2      49.0
worker (percent)             Taiwan       53.9         56.2     41.7       38.5      31.3      22.5

a
    Shares of agriculture in GDP and labor force include forestry and fisheries.

Sources: Heston, Summers and Aten (2006); JMAFF, Nogyo Hakusho Fuzoku Tokei-hyo
(Statistical Appendix of Agricultural White Paper), various issues; Korean Government, Major
Statistics of Agriculture, Forestry and Fisheries, various issues. Taiwan Government, Taiwan
Agricultural Yearbook, various issues.
                                              44


Table 2: Changes in agricultural structure in Japan, Korea and Taiwan, 1955 to 2004

                                  1955     1960      1970      1980     1990      2000       2004
 Number of farm       Japan      6,043     6,057    5,342     4,661     3,835    3,120       2,934
 households (000)     Korea      2,218     2,350    2,483     2,155     1,768    1,383       1,240
                      Taiwan       733       786      880       891       860      721         721
 Population in farm   Japan     36,347    34,411   26,282    21,366    17,296   10,467       9,400
 households (000)     Korea     13,300    14,559   14,422    10,827     6,661    4,031       3,415
                      Taiwan     4,603     5,373    5,997     5,389     4,289    3,669       3,225
 Persons per farm     Japan       6.01      5.68     4.92      4.58      4.51     3.35        3.20
 household            Korea       6.00      6.20     5.81      5.02      3.77     2.91        2.75
                      Taiwan      6.28      6.84     6.81      6.05      4.99     5.09        4.47
 Arable land          Japan      6,095     6,071    5,796     5,461     5,243    4,830       4,714
 (000ha)              Korea      1,995     2,025    2,298     2,196     2,109    1,918       1,836
                      Taiwan       873       869      905       907       890      852         836
 Arable land per      Japan       1.01      1.00     1.08      1.17      1.37     1.55        1.61
 farm household       Korea       0.90      0.86     0.93      1.02      1.19     1.39        1.48
 (ha)
                      Taiwan      1.19      1.11     1.03      1.02      1.03     1.18        1.16
 Share of agric       Japan       70.7      49.5     31.9      17.0      13.8     13.1        14.3
 income in total      Korea         na        na     75.8      65.2      56.8     47.2        39.3
 farm household
 income ( percent)    Taiwan        na        na      48.7     24.8      20.1         17.6    22.0
 Share of rice in     Japan         na      47.4      37.9     30.0      27.8         25.4    22.8
 value of agric.      Korea         na      59.3      37.3     34.1      36.9         32.9    27.6
 production
 (percent)            Taiwan      37.4      36.5      25.7     19.8      12.1          9.6     7.1

Sources: JMAFF, Nogyo Hakusho Fuzoku Tokei-hyo (Statistical Appendix of Agricultural
White Paper); Korean Government, Major Statistics of Agriculture, Forestry and Fisheries;
Taiwan Government, Taiwan Agricultural Yearbook; various issues.
                                                                       45



Table 3: Nominal rates of assistance to selected agricultural products, Japan, Korea and Taiwan, 1955 to 2007 (percent)
(a) Japan
                                     1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99      2000-04   2005-07
Import-competing products               53.7      66.5      79.9      77.8     110.8     111.8     153.1     149.3        147.3     146.5     124.3
Rice                                    72.5      91.0     122.9     164.9     210.8     267.2     591.6     656.2        535.4     607.0     362.8
Barley                                  35.7      38.7      16.5      10.1      63.1      88.6     203.6     141.7        129.0     121.5     197.6
Wheat                                   36.1      39.1      42.4      25.4      76.2     111.8     170.3     200.4        204.2     128.6     269.5
Beef                                    27.4      68.3     130.8     106.0     215.3     136.7     208.9     177.0        191.8     149.1      39.3
Pigmeat                                 17.9      59.8      12.4      -3.4       2.9      12.6       0.5       5.7         10.3       5.5     138.0
Poultry                                 33.1      42.8      33.5      36.7      31.1      16.8      17.6      25.1         41.4      74.0      11.7
Egg                                      3.0      -3.3      -5.3      -2.8      -3.3       1.4      19.9      23.2         33.8      27.6      17.1
Milk                                    44.2      96.2     162.1     165.4     385.7     211.5     365.2     280.3        238.0     273.2     101.0
Apple                                     na        na        na        na        na        na      32.0      24.1         27.7      31.4      17.3
Cabbage                                   na        na        na        na        na        na      10.3      31.1        127.5     177.5     204.6
Cucumber                                  na        na        na        na        na        na      57.1      17.4         29.8      43.2      31.1
Grape                                     na        na        na        na        na        na      87.2      82.2        117.7     177.4     178.6
Mandarin                                  na        na        na        na        na        na      21.1      44.8         47.3      32.4      46.4
Pear                                      na        na        na        na        na        na      35.0      24.0         64.2     157.3     128.7
Spinach                                   na        na        na        na        na        na      89.2     138.0        236.7     134.4      32.3
Strawberry                                na        na        na        na        na        na      11.0      25.1         26.5      16.8       7.2
Onion                                     na        na        na        na        na        na      55.3      80.8        144.4     284.2     294.9
Soybean                                   na        na        na        na        na     410.7     259.4      21.3         42.2      67.2      68.5
Sugar                                     na        na        na        na        na     229.6     198.3     158.4        159.0     154.7     106.6

Exportables                            n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.        n.ap.     n.ap.     n.ap.

Total of covered products               53.7      66.5      79.9      77.8     110.8     111.8     153.1     149.3        147.3     146.5     107.4
 -- from domestic measures              -0.4       3.1      10.0       9.2      10.9       9.6       8.0       6.0          4.5       4.5       4.0
 -- from border (import) measures       54.1      63.4      69.9      68.6      99.9     102.1     145.2     143.3        142.8     142.0     102.9
Dispersion of covered products b        39.4      40.3      69.4      82.2     156.1     142.6     175.3     161.5        136.1     142.5     116.0
% coverage (at undistorted prices)        69        65       59         55       55         56        69        68           67        67        76




                                                                                                                                                45
                                                                       46



 Table 3 (continued): Nominal rates of assistance to selected agricultural products, Japan, Korea and Taiwan, 1955 to 2007
                                                                     (percent)
(b) Korea
                                      1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99      2000-04   2005-07
                            a
Import-competing products                -3.9       4.4      16.6      47.6      73.8     122.8     166.7     201.9     182.9        213.6     116.4
Rice                                     -8.2      -7.0      -5.4      31.3      59.6     118.4     214.4     265.9     294.3        385.9     213.3
Barley                                   41.2      83.5      72.3     120.3     101.2     165.9     357.0     524.3     543.0        562.8     275.6
Wheat                                   -43.0     -26.7     -11.2       0.4      26.5      92.2     144.4     216.0     122.8        135.4        na
Beef                                     38.8      34.4      64.9      73.9     162.6     163.2     126.2     200.8     159.9        167.8     182.3
Pigmeat                                 -15.2      21.7     158.7     204.1     202.9     169.1     124.7     149.3     116.2        134.4     103.1
Poultry                                 -11.8       6.9     131.4     103.5     161.7      94.2      86.6     155.6     171.7        179.2      55.7
Egg                                     -27.1     -24.7      23.0       0.1      -7.5      14.9      19.4      28.0      26.6         54.3      31.6
Milk                                       na        na     173.3     108.8     189.0     179.8     185.2     203.7     140.7        149.8     137.0
Cabbage                                    na        na        na        na        na        na      30.0      30.0      29.1         27.6      27.0
Pepper                                     na        na        na        na        na        na     175.0     245.4     145.5        197.0     235.7
Soybean                                 -13.0      18.8      58.8      80.0     122.2     253.0     361.8     508.2     625.6        757.4     729.2
Garlic                                     na        na        na        na        na        na     250.3     288.8     213.3        122.6     128.1

              a
Exportables                             n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.        n.ap.     n.ap.

Total of covered products                -3.9       4.4      16.6      47.6      73.8     122.8     166.7     201.9     182.9        213.6     147.3
 -- from domestic measures               -0.2      -0.4       0.9       4.2       7.1       5.3       5.5       5.9          6.1       5.2       4.4
 -- from border (import) measures        -3.7       4.7      15.7      43.4      66.7     117.5     161.2     196.0     176.9        208.5     143.0
Dispersion of covered products b         34.1      40.5      85.0      82.5      89.0      80.1     114.8     164.2     200.1        225.4     206.0
% coverage (at undistorted prices)        48        57        67        65        65        61        60        57           51        46        55




                                                                                                                                                 46
                                                                          47



 Table 3 (continued): Nominal rates of assistance to selected agricultural products, Japan, Korea and Taiwan, 1955 to 2007
                                                                     (percent)
(c) Taiwan
                                         1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-02   2003-07
    Exportables a                          -23.5       7.5       5.7      20.7      13.4      35.9      89.5     161.4     167.6     203.1      n.a.
    Rice                                   -29.6      -6.6     -17.9      -9.4      -7.6      32.5     103.3     161.4     167.6     203.1      n.a.
    Pigmeat d                               -8.1      64.0      99.7      98.3      60.6      42.6      64.8     n.ap.     n.ap.     n.ap.      n.a.


    Import-competing products a            -33.0       5.3      21.7      26.7      32.5      49.1      55.4      93.6     126.3     160.0      n.a.
    Wheat                                   48.2      36.0      39.4      32.2      57.2      92.3      n.a.      n.a.      n.a.      n.a.      n.a.
    Beef                                    13.7      41.2      28.8      22.0      79.6      77.0     101.3      98.5      82.6      72.8      n.a.
    Pigmeat d                              n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     n.ap.     107.1     131.3     173.2      n.a.
    Poultry                                -47.5      -3.7      21.2      27.1      30.0      63.6      84.6     143.0     228.7     279.5      n.a.
    Egg e                                  n.ap.     n.ap.     n.ap.     n.ap.     n.ap.       0.7      26.8      23.9      17.9      24.7      n.a.


    Nontradable a                            0.0       0.0       0.0       0.0       0.0       0.0     n.ap.     n.ap.     n.ap.     n.ap.      n.a.
           e
    Egg                                      0.0       0.0       0.0       0.0       0.0       0.0     n.ap.     n.ap.     n.ap.     n.ap.      n.a.


    Total of covered products a            -23.2       7.2       6.2      20.0      14.0      35.1      76.1     109.5     134.0     167.8      n.a.
    Dispersion of covered products b        33.4      35.3      47.5      40.5      40.5      34.5      56.9      66.1      86.9     106.4      n.a.
    % coverage (at undistorted prices)       53        49        49        48        50        42        35        34        35        36       n.a.
a
  Weighted averages, with weights based on the unassisted value of production.
b
  Dispersion is a simple 5-year average of the annual standard deviation around the weighted mean of NRAs of covered products.
c
  n.a. = data not available; n.ap. = not applicable.
d
  Pigmeat changed trade status in 1989, from import-competing to exportable. The period average reported here corresponds to 1985-88 for the
import-competing product, and 1989-94 for the exportable product.
e
  Eggs were assumed to be a non-tradable with zero distortions prior to 1983.
f
  n.a. = data not available; n.ap. = not applicable (because shown elsewhere in the table with the opposite trade status).
Source: Anderson and Valenzuela (2008), based on authors` spreadsheet.



                                                                                                                                                 47
                                                                        48



Table 4: Nominal rates of assistance to agricultural relative to non-agricultural industries,e Japan, Korea and Taiwan, 1955 to 2007
                                                                      (percent)
(a) Japan

                                       1955-59 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04 2005-07
Covered products                           53.7    66.5    79.9    77.8  110.8   111.8   153.1   149.3   147.3   146.5   107.4
Non-covered products                        5.3     6.5     7.7     8.0    12.1    13.0    23.7    26.7    42.0    50.5    18.6
All agriculture (excl NPS)                 38.8    45.8    50.4    46.9    65.9    68.3  112.4   110.5   112.8   115.2     70.9
    All importables                        46.1    55.0    62.1    58.1    81.2    82.1  127.5   124.4   127.6   129.1   124.3
    All exportables                          na      na      na      na      na      na      na      na      na      na      na
    All nontradables                        0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0    40.8
    TBI                                   -0.32   -0.35   -0.38   -0.37   -0.45   -0.45   -0.56   -0.55   -0.56   -0.56   -0.55

Non-product specific (NPS)                   na         na         na          na      4.8        4.0       6.4        5.8        6.8     5.1      3.3
    Inputs                                   na         na         na          na      4.8        4.0       6.4        5.8        6.8     5.1      3.3
    Other                                    na         na         na          na      0.0        0.0       0.0        0.0        0.0     0.0      0.0
All agriculture (incl NPS)                 38.8       45.8       50.4        46.9     66.8       72.3     118.8      116.3      119.6   120.4     74.3

Decoupled payments                          0.0        0.0        0.0         0.0      3.6       15.1       7.1        2.5        2.7     4.6      5.0
All agriculture (incl NPS & dec)           38.8       45.8       50.4        46.9     70.4       87.4     125.9      118.9      122.3   124.9     79.3

All agricultral tradables (incl NPS)       46.1       55.0       62.1        58.1     87.6       86.1     133.8      130.2      134.4   134.2    127.7
All nonag tradables                         2.5        3.9        3.8         2.8      1.6        1.1       1.3        1.1        0.8     0.7      0.6
Relative rate of assistance, RRA d         42.5       49.1       56.2        53.7     84.6       84.0     130.9      127.6      132.4   132.7    126.4




                                                                                                                                            48
                                                                        49



Table 4 (continued): Nominal rates of assistance to agricultural relative to non-agricultural industries,e Japan, Korea and Taiwan, 1955 to 2007
                                                                      (percent)
(b) Korea

                                       1955-59 1960-64 1965-69 1970-74 1975-79 1980-84 1985-89 1990-94 1995-99 2000-04 2005-07
Covered products                           -3.9     4.4    16.6    47.6    73.8  122.8   166.7   201.9   182.9   213.6   147.3
Non-covered products                       -1.7    -0.2     7.0    15.3    25.3    37.4    64.3    88.0    74.6    71.7    49.3
All agriculture (excl NPS)                 -3.2     4.0    13.4    35.7    56.3    89.4  126.1   152.8   129.8   137.3     80.6
    All importables                        -3.3     4.9    16.3    46.1    71.8  118.6   159.8   197.6   164.8   171.9   116.4
    All exportables                          na      na      na      na      na      na      na      na      na      na      na
    All nontradables                        0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0     0.0
    All nontradables                      0.03    -0.05   -0.14   -0.32   -0.42   -0.54   -0.62   -0.66   -0.62   -0.63   -0.54

Non-product specific (NPS)                    na        na         na          na      0.6        0.7       2.2        7.1       7.3        4.4           3.9
    Inputs                                    na        na         na          na      0.6        0.7       2.2        7.1       7.3        4.4           3.9
    Other                                     na        na         na          na      0.0        0.0       0.0        0.0       0.0        0.0           0.0
All agriculture (incl NPS)                  -3.2       4.0       13.4        35.7     56.4       90.1     128.1      159.8     137.0      141.7          84.4

Decoupled payments                           0.0       0.0        0.0         0.0      0.1        0.4       0.5        5.3       2.7        7.2          12.3
All agriculture (incl NPS & dec)            -3.2       4.0       13.4        35.7     56.4       90.5     128.6      165.2     139.7      148.8          96.8

All agricultral tradables (incl NPS)       -3.3        4.9       16.3        46.1     71.9     119.3      161.7      204.7     171.9      176.3         120.3
All nonag tradables                        45.6       37.1       22.3        11.4     11.7       6.8        5.7        3.3       2.3        1.7           1.5
Relative rate of assistance, RRA d        -32.6      -21.4       -4.8        30.5     54.0     105.4      147.8      195.0     165.8      171.6         117.0




                                                                                                                                                   49
                                                                                   50



Table 4 (continued): Nominal rates of assistance to agricultural relative to non-agricultural industries,e Japan, Korea and Taiwan, 1955 to 2007
                                                                      (percent)
(c) Taiwan)

                                            1955-59     1960-64    1965-69    1970-74     1975-79     1980-84     1985-89     1990-94     1995-99     2000-02     2003-07
    Covered products a                         -23.2         7.2        6.2       20.0        14.0        35.1        76.1      109.5       134.0       167.8         n.a.
    Non-covered products                         0.0         0.0        0.0        0.0         0.0         0.0         0.0         0.0         0.0         0.0        n.a.
    All agricultural products a                -11.8         3.5        3.0        9.2         7.0        14.6        26.4        37.2        45.5        60.0        n.a.
    Non-product specific (NPS) assistance        n.a.       n.a.       n.a.        n.a.        n.a.        n.a.        n.a.        n.a.        n.a.        n.a.       n.a.
    Total agricultural NRA (incl. NPS) b       -11.8         3.5        3.0        9.2         7.0        14.6        26.4        37.2        45.5        60.0        n.a.
    Trade bias index c                        -0.15        0.05       0.02       0.12        0.05        0.15        0.27        0.11        0.02        0.00         n.a.

    Assistance to just tradables:
      All agricultural tradables               -15.8         4.7        3.9       12.0         8.9        18.5        32.7        45.0        53.6        69.2        n.a.
      All non-agricultural tradables             8.8         9.3        8.8        7.5         7.0         5.2         4.5         2.6         1.8         1.1        n.a.
    Relative rate of assistance, RRA d         -22.5        -4.2       -4.5        4.2         1.7        12.7        27.0        41.3        51.0        67.3        n.a.

a
  NRAs including product-specific input subsidies.
b
  NRAs including product-specific input subsidies and non-product-specific (NPS) assistance. Total of assistance to primary factors and
intermediate inputs divided to total value of primary agriculture production at undistorted prices (%).
c
  Trade bias index is TBI = (1+NRAagx/100)/(1+NRAagm/100) ­ 1, where NRAagm and NRAagx are the average percentage NRAs for the
import-competing and exportable parts of the agricultural sector.
d
  The RRA is defined as 100*[(100+NRAagt)/(100+NRAnonagt)-1], where NRAagt and NRAnonagt are the percentage NRAs for the tradables
parts of the agricultural and non-agricultural sectors, respectively.
e
  n.a. = data not available; n.ap. = not applicable.

Source: Anderson and Valenzuela (2008), based on authors` spreadsheet.




                                                                                                                                                                         50
                                                                               51


Table 5: Consumer tax equivalents for selected agricultural products, Japan, Korea and Taiwan, 1955 to 2007
                                                              (percent)
(a) Japan
                             1955-59   1960-64   1965-69   1970-74   1975-79   1980-84     1985-89   1990-94   1995-99   2000-04   2005-07
Apple                             na        na        na        na        na        na        30.8      23.8      27.5      31.0      17.0
Barley                          34.9      32.6      10.2       5.8      20.3      29.1       158.1     131.9     118.9     105.9     114.3
Beef                            27.4      68.3     130.8     106.0     215.3     136.7       208.9     177.0     191.8     149.1      38.5
Cabbage                           na        na        na        na        na        na         9.2      30.8     127.0     176.6     204.0
Cucumber                          na        na        na        na        na        na        56.4      17.2      29.7      42.9      30.9
Egg                              3.0      -3.3      -5.3      -2.8      -3.3       1.4        19.7      22.9      33.6      27.2      17.0
Grape                             na        na        na        na        na        na        85.3      81.6     117.2     176.3     177.8
Mandarin                          na        na        na        na        na        na        20.0      44.5      47.0      32.0      46.0
Milk                            44.2      96.2     162.1     165.4     385.7     211.5       365.2     280.3     238.0     273.2      93.5
Onion                             na        na        na        na        na        na        54.0      80.4     143.9     282.9     294.0
Pear                              na        na        na        na        na        na        35.0      24.0      64.2     157.3     103.4
Pigmeat                         17.9      59.8      12.4      -3.4       2.9      12.6         0.5       5.7      10.3       5.5     138.0
Poultry                         33.1      42.8      33.5      36.7      31.1      16.8        17.6      25.1      41.4      74.0      11.7
Rice                            73.1      85.7     103.9     137.3     179.6     232.6       548.5     613.2     506.4     574.6     348.6
Soybean                           na        na        na        na        na       0.0         0.0       0.0       0.0       0.0       0.0
Spinach                           na        na        na        na        na        na        89.2     138.0     236.7     134.4      32.3
Strawberry                        na        na        na        na        na        na        10.0      24.8      26.2      16.4       7.0
Sugar                             na        na        na        na        na     167.0       185.9     154.8     155.4     151.6     119.6
Wheat                           35.9      33.0      27.4      14.1      26.7      37.2       136.1     108.4      73.4      68.7      73.6



All covered products            53.0      62.2      66.8      67.6      93.2        98.8     134.9     119.3     116.1     106.6      81.0
     Import-competing           53.0      62.2      66.8      67.6      93.2        98.8     134.9     119.3     116.1     106.6      86.9
     Exportables                  na        na        na        na        na          na        na        na        na        na        na
Dispersion, cov. productsb      39.1      39.6      66.5      75.0     144.0        97.2     154.5     149.3     130.0     141.8     108.3




                                                                                                                                             51
                                                                              52


Table 5 (continued): Consumer tax equivalents for selected agricultural products, Japan, Korea and Taiwan, 1955 to 2007
                                                             (percent)
(b) Korea
Korea                       1955-59   1960-64   1965-69   1970-74   1975-79   1980-84   1985-89   1990-94   1995-99   2000-04   2005-07
Wheat                         -46.2     -22.5     -11.1       1.1      16.2      46.0     132.8     167.4      80.5      80.6        na
Barley                         40.8      77.8      64.9      96.6      57.3     119.6     325.6     411.5     341.2     327.5     174.4
Rice                           -7.7      -5.5      -5.0      29.1      54.5     113.4     211.5     261.7     290.8     385.3     213.3
Beef                           38.8      34.4      64.9      73.9     162.6     163.2     122.1     200.7     153.9     167.7     182.3
Pigmeat                       -15.2      21.7     158.7     204.1     202.9     169.1     124.7     149.3     116.2     134.4     103.1
Poultry                       -11.8       6.9     131.4     103.5     161.7      94.2      86.6     155.6     171.7     179.2      55.7
Egg                           -27.1     -24.7      23.0       0.1      -7.5      14.9      19.4      28.0      26.6      54.3      31.6
Milk                             na        na     173.3     108.8     189.0     179.8     185.2     203.7     140.7     149.8     137.0
Cabbage                          na        na        na        na        na        na      30.0      30.0      29.1      27.6      27.0
Pepper                           na        na        na        na        na        na     175.0     245.4     145.5     197.0     235.7
Soybean                       -19.8       8.2      51.6      63.2      95.2     245.4     112.2      75.5      63.6      66.8      91.9
Garlic                           na        na        na        na        na        na     250.3     288.8     213.3     122.6     128.1

All covered products           -5.0       5.4      14.5      39.7      63.9     114.3     148.5     176.4     144.9     154.1     135.1
    Import-competing           -5.0       5.4      14.5      39.7      63.9     114.3     148.5     176.4     144.9     154.1     115.7
    Exportables                  na        na        na        na        na        na        na        na        na        na        na
Dispersion, cov productsb      34.7      37.6      85.3      81.1      92.3      82.3      95.1     118.1     107.3     116.2      81.7




                                                                                                                                          52
                                                                                  53


Table 5 (continued): Consumer tax equivalents for selected agricultural products, Japan, Korea and Taiwan, 1955 to 2007
                                                             (percent)
(c) Taiwan
                                1955-59   1960-64   1965-69   1970-74   1975-79    1980-84    1985-89   1990-94   1995-99   2000-02   2003-07


    Rice                          -29.6      -6.6     -17.9      -9.4      -7.6        32.5    103.3     161.4     167.6     203.1        na
    Wheat                         38.3      16.4      29.6      14.6       -1.6        -0.3       na        na        na        na        na
    Beef                          13.7      41.2      28.8      22.0      79.6         77.0    101.3      98.5      82.6      72.8        na
    Pigmeat                        -8.1     64.0      99.7      98.3      60.6         42.6     76.5     103.9     131.3     173.2        na
    Poultry                       -47.5      -3.7     21.2      27.1      30.0         63.6     84.6     143.0     228.7     279.5        na
    Egg                             0.0       0.0       0.0       0.0       0.0         0.7     26.8      23.9      17.9      24.7        na
    All covered products a        -21.1       7.7       6.9     19.0      15.2         38.4     82.7     116.5     136.8     166.5        na
       Import-competing            -6.1     13.2      26.0      23.3      27.3         49.0     74.7     102.1     129.1     159.5        na
       Exportables                -23.7       7.0       5.2     19.1      13.7         36.2     89.6     161.4     167.6     203.1        na
    Dispersion, cov productsb     33.3      35.9      47.2      40.6      40.2         32.2     34.1      56.2      87.1     106.0        na
a
  Weighted averages, with weights based on the unassisted value of consumption where consumption is derived using the value of
production and self-sufficiency ratios (derived from the FAOSTAT Database) as production/consumption.
b
  Dispersion is a simple 5-year average of the annual standard deviation around the weighted mean of CTEs of covered products.
c
  n.a. = data not available; n.ap. = not applicable.
Source: Anderson and Valenzuela (2008), based on authors` spreadsheet.




                                                                                                                                                53
                                               54


Table 6: Changes in direct tax burdens and the allocations of national government subsidies to
agricultural and non-agricultural sectors, Japan, 1978 to 1937

   (a) Tax burdens
                       Direct tax burdena                           Direct tax rateb
                Agriculture          Non-agriculture        Agriculture     Non-agriculture
             (million    (% of      (million (% of
                                                                (%)                (%)
               yen)      total)       yen)    total)
1878-82           63.6        91         6.3        9
1888-92           58.5        86         9.8      14               14.9                   2.0
1898-02           99.1        74        35.4      26               11.7                   2.7
1908-12         153.4         54       132.2      46               11.2                   5.5
1918-22         295.7         41       431.1      59                7.5                   4.8
1928-32         205.5         33       421.3      67                8.1                   3.8
1933-37         197.3         26       559.2      74                6.5                   4.0

   (b) Subsidy allocations
                         Subsidy receiptc                            Subsidy rated
                Agriculture          Non-agriculture        Agriculture    Non-agriculture
            (million     (% of      (million (% of
                                                                (%)                (%)
              yen)       total)       yen)    total)
1881                 0          0         0.7    100
1891                 0          0         2.5    100                  0                  0.49
1901               0.4          2        18.7     98               0.05                  1.41
1911               0.3          1        27.8     99               0.02                  1.09
1921               0.6          1        51.8     99               0.02                  0.55
1931             21.4         17       101.5      83               1.17                  1.11
1934             28.3         28         71.0     72               1.14                  0.58

a Includes both national tax and local rates.
b Direct tax burden divided by sectoral NDP
c National government subsidies.
d Subsidy receipt divided by sectoral NDP.
Source: Tobata and Ohkawa (1956) for tax and subsidy data; Ohkawa and Shinohara for sectoral
        NDP data.




                                                                                                 54
                                                                55


        Table 7: Farm-nonfarm income disparity in Japan's economic development, 1885 to 2000

                                                                                                                    Farm /
                                                                                     Agriculture/ Agriculture/    non-farm
                 GDP        Share of    Nominal         Tariff                         industry   manufacturing     house-
               per capita  agriculture   rate of         rate          Average          labour      terms of         hold
             (ppp at 2000)  in GDP     protection       of rice       tariff rate,   productivity     trade        income
                                        for rice                     all products        ratio                       ratio
                  (1)          (2)         (3)            (4)             (5)             (6)          (7)            (8)
                 US$           %            %              %               %               %       1885=100            %

      1885       1,092           45          15            -               -             75           100              76
      1890       1,285           48          34            -               -             67           115              87
      1900       1,498           39          21            -              3.7            49           102              52
      1910       1,656           32          35           14             16.2            37            98              47
      1920       2,154           30          16           10             10.7            50            99              48
      1930       2,350           18          57           14             22.6            31           104              32
      1935       2,693           18          134          41             23.8            24           136              38

    1955      3,519           21        49           -           3.5              55          163                       77
    1960      5,063           13        98           -           6.5              39          169                       70
    1970     12,337            6        150          -           6.9              25          303                       94
    1980     17,056            4        205          -           2.5              25          342                      116
    1990     23,580            2        481          -           2.7              26          379                      115
    2000     26,220            1        560        778           2.1              22          347                      101
Notes:
(1) GDP per capita in PPP at 2000 from World Bank (2006), linked with the series from OECD (2003).


(2)   The share of agriculture in nominal GDP for 1885-1935 and share in NNP for 1885-1935 are from Ohkawa and
      Shinohara (1979, pp.273-81) 1960-2000 data are from World Bank (2006).
(3)   Nominal rates of protection for rice for 1885-1960 are calculated by the difference between the domestic wholesale
      price of rice and the unit value of imported rice as percentage of the latter. For 1970-2000, it is calculated by the
      difference between the domestic wholesale price of rice and unit value of world rice imports multiplied by 1.18,
      expressed as a percentage of the latter. Data are from Kayo (1977) and Bank of Japan, Yearbook of Wholesale Price
      Indexes, various years for domestic wholesale price of rice, and Nihon Boeki Seiran, Toyo Keizai Shinposha, 1935,
      Yearbook of Japan Foreign Trade Statistics, Japan Tariff Association, and FAOSTAT, FAO for border prices.
(4)   Tariffs for 1910, 1920, 1930 and 1935 are tariffs in 1908, 1918, 1928 and 1933, respectively, from Ohkawa,
      Shinohara and Umenura (1967). Tariff rate for 2000 is ad valorem tariff equivalent of specific duty, 341 yen/kg,
      which was reported to the WTO by the Japanese government.
(5)   Tariffs for 1900, 1910, 1920, 1930 and 1935 are tariffs in 1898, 1908, 1918, 1928 and 1933, respectively, from
      Ohkawa, Shinohara and Umenura (1967). Tariffs for 1955-2000 are average tariffs calculated by total tariff
      revenue as percentage of total import cif value in the Ministry of Finance, Monthly Report of Financial Statistics,
      various issues.




                                                                                                                  55
                                                            56


(6)   The ratio of real GDP per worker in agriculture (including forestry and fishery) to real GDP per worker in industry
      (including mining). 1885-1970 from Hayami (1986, p.120). 1980-2000 values are extended from 1970 using real
      GDPs and the numbers of employed persons from Annual Reports of National Accounts.

(7)   1985-1960: the ratio between the price index of agricultural products and the price index of manufacturing products
      in Ohkawa, Shinohara and Umenura (1967, pp.165 and192-3). 1970-80 extended from 1960 using the Ministry of
      Agriculture, Forestry and Fishery`s price index of agricultural products and the Bank of Japan`s domestic corporate
      goods price index for manufacturing industry products.

(8)   1885-1935: the ratio in household income per household member between farm and non-farm households in Otsuki
      and Takamatsu (1982). 1955-2000 values are the ratio in per-capita income between farm households and
      employees` households based on the Ministry of Agriculture`s Farm Household Economy Survey and the Ministry
      of Internal Affairs` National Survey of Family Income and Expenditure. Farm households in 1990-2000 exclude
      non-commercial farm households.


        Sources: Authors` compilation drawing on data sources noted above




                                                                                                                 56
                                              57


Appendix Table A1: Annual distortion estimates, Japan, 1955 to 2007
(a) Nominal rates of assistance to covered products
                                       (percent)
                               Cabba   Cucu                        Mand
       Apple   Barley   Beef      ge   mber         Egg    Grape    arin   Milk   Onion   Pear
1955      na       26     -5      na     na        -63.5      na      na    49       na     na
1956      na       27     44      na     na         17.9      na      na    47       na     na
1957      na       31     43      na     na         42.6      na      na    41       na     na
1958      na       50     38      na     na         18.2      na      na    52       na     na
1959      na       44     18      na     na          0.0      na      na    31       na     na
1960      na       61     44      na     na          0.0      na      na    51       na     na
1961      na       55     65      na     na           -6      na      na    75       na     na
1962      na       24     79      na     na            4      na      na    92       na     na
1963      na       30     90      na     na           -9      na      na   125       na     na
1964      na       24     63      na     na           -6      na      na   137       na     na
1965      na       17    122      na     na          -11      na      na   112       na     na
1966      na        5    115      na     na           -2      na      na   103       na     na
1967      na       10    115      na     na           -2      na      na   112       na     na
1968      na       23    136      na     na           -1      na      na   199       na     na
1969      na       27    167      na     na           -9      na      na   284       na     na
1970      na       38    128      na     na           -1      na      na   266       na     na
1971      na       10    106      na     na           -9      na      na   157       na     na
1972      na       71    112      na     na            3      na      na    92       na     na
1973      na      -14    114      na     na           -9      na      na   167       na     na
1974      na      -54     69      na     na            3      na      na   145       na     na
1975      na       na    205      na     na            5      na      na   144       na     na
1976      na        4    203      na     na          -14      na      na   337       na     na
1977      na       43    242      na     na           -5      na      na   502       na     na
1978      na     134     266      na     na            1      na      na   545       na     na
1979      na       72    159      na     na           -4      na      na   400       na     na
1980      na       44    138      na     na           -3      na      na   259       na     na
1981      na       62    138      na     na           13      na      na   173       na     na
1982      na       41    123      na     na           -3      na      na   146       na     na
1983      na     155     139      na     na           -2      na      na   214       na     na
1984      na     142     146      na     na            2      na      na   265       na     na
1985      na     226     156      na     na           16      na      na   308       na     na
1986     64      227     252       5     24           52      53     20    453       83    42
1987     20      255     230       5     24           -4      55     20    494       83    23
1988     23      181     227      25     28           16      61     23    364       27    38
1989     20      130     179       5    154           20     180     20    206       27    38
1990     21        94    168       6      5           19      88     21    230       30      8
1991     20      115     164       5     17           37      64     20    268       49    28
1992     20      134     143       5      7            6      56     26    254       33    38
1993     39      146     183       5     44           16      81     20    290      128      8
1994     20      220     228     135     14           38     123    137    360      165    38
1995     27      151     183     136     24           55     121     60    295       94    83
1996     19        72    196      79     14           27     107     88    208       83    29
1997     19        90    200     113     32           25      86     19    205      106    16
1998     56      129     196     162     33            6     117     52    200      207    87
1999     18      203     184     148     45           56     158     18    281      232   106
2000     44      154     174     193     44           63     158     42    296      222   219
2001     57      119     206     153     50           28     155     17    185      261   199
2002     18      125     105     166     39           22     174     25    324      302   224
2003     17      102      98     153     42            2     196     20    305      294    61
2004     21      108     163     223     40           23     205     57    256      342    84
2005     17      284      40     240     47           17     203     37    119      344    76
2006     17      258     39     187     38           17     176      85    118     286    233
2007     17       51     39     187      8           17     157      17     65     255     77




                                                                                          57
                                            58


                                                           Strawbe                        All
       Pigmeat   Poultry   Rice   Soybean        Spinach        rry   Sugar   Wheat   covered
1955         3      -40      51        na             na         na      na      34        23
1956        -3      -41      67        na             na         na      na      31        50
1957         2       93      77        na             na         na      na      31        63
1958         0       59      79        na             na         na      na      42        65
1959        87       95      88        na             na         na      na      42        68
1960        94       99      94        na             na         na      na      44        75
1961        89       37      87        na             na         na      na      41        64
1962        55       13      66        na             na         na      na      36        53
1963        28       33    102         na             na         na      na      42        69
1964        33       31    107         na             na         na      na      33        71
1965        23       34    127         na             na         na      na      44        77
1966        17       27    128         na             na         na      na      40        79
1967         0       37    118         na             na         na      na      32        75
1968        11       45    115         na             na         na      na      43        82
1969        10       25    126         na             na         na      na      52        86
1970       -10       24    166         na             na         na      na      57        91
1971         3       53    193         na             na         na      na      56        87
1972         3       45    257         na             na         na      na      97      100
1973        -2       38    169         na             na         na      na      -8        79
1974       -12       24      39        na             na         na      na     -75        31
1975         4       26      94        na             na         na      na     -85        64
1976        -5       35    175         na             na         na      na       4        91
1977        -7       37    229         na             na         na      na    156       116
1978        20       40    285         na             na         na      na    212       156
1979         4       17    271        547             na         na     107      94      127
1980         6       22    227        391             na         na     100      66      100
1981        18       24    225        415             na         na     224      84      105
1982         7       12    248        533             na         na     243      93        97
1983        13       20    303        282             na         na     258    149       120
1984        19         6   332        433             na         na     323    167       136
1985        -1         7   413        631             na         na     310    182       148
1986        -5       29    645        264            103        10      215    172       168
1987         1       21    718        205            103        10      191    198       160
1988         7       23    637        119            147        13      159    163       157
1989         1         7   546         78              5        10      116    136       133
1990        -4       11    518         48              5        11      151    138       119
1991        11       14    544         34             33        10      156    226       127
1992        16       19    638         17            119        12      164    182       142
1993         1       44    818          0            103        32      168    212       149
1994         4       37    762          7            430        61      153    244       209
1995         8       31    758         13            140        46      148    290       177
1996         7       36    523         21            583        22      143    155       142
1997         8       32    441         43            234        19      135    174       130
1998        16       39    411         65             54        11      175    180       127
1999        12       69    544         68            173        33      194    222       160
2000        13      108    597         39            199        34      150    185       173
2001        16       73    597         41            108        20      152    153       146
2002         9       71    624         79            112          9     147    111       142
2003       -11       73    629         79            134        11      175    102       128
2004         1       45    588         98            119          9     150      92      143
2005        94       12    521         76             91          9     152    387       129
2006      162        12    318       109              3          6     109     358       109
2007      159        12    249        20              3          6      59      63         85




                                                                                          58
                                                         59


  Appendix Table A1 (continued): Annual distortion estimates, Japan, 1955 to 2007
  (b) Nominal and relative rates of assistance to alla agricultural products, to exportableb
  and import-competing b agricultural industries, and relativec to non-agricultural
  industries                                              (percent)
                  NRA, all agric products,a by component                  NRA, agric tradables
                               NRA,         NRA,
       NRA,        NRA,       non-prod       all ag  NRA, all ag
       covere      non-co uct-specif product           products             NRA, ag        NRA, all      NRA, all
          d         vered    ic support     s (incl   (incl NPS   NRA, ag    import-         agric        non-ag
       produc      produc        (3)         NPS)        and      export-    competi       tradable      tradable
          ts          ts                   (4)=1+2   decoupled)    ables        ng          goods c       goods      RRAb
         (1)         (2)                      +3          (5)       (6)        (7)         (8)=6+7          (9)       (10)
1955         23           2          na           17           17       na         20               20           2       17
1956         50           5          na           34           34       na         41               41           2       39
1957         63           6          na           43           43       na         53               53           2       50
1958         65           6          na           49           49       na         57               57           3       52
1959         68           7          na           52           52       na         60               60           3       55
1960         75           8          na           55           55       na         64               64           4       59
1961         64           6          na           47           47       na         55               55           4       50
1962         53           5          na           36           36       na         44               44           4       38
1963         69           7          na           47           47       na         57               57           4       51
1964         71           6          na           44           44       na         55               55           4       48
1965         77           7          na           49           49       na         60               60           4       54
1966         79           8          na           48           48       na         60               60           4       54
1967         75           7          na           45           45       na         57               57           4       51
1968         82           8          na           54           54       na         65               65           4       59
1969         86           9          na           56           56       na         68               68           4       62
1970         91          10          na           57           57       na         70               70           4       65
1971         87           9          na           54           54       na         66               66           3       61
1972       100           10          na           59           59       na         74               74           3       69
1973         79           8          na           45           45       na         57               57           2       53
1974         31           3          na           19           19       na         23               23           1       22
1975         64           7          na           39           39       na         48               75           1       73
1976         91          10          na           54           54       na         67               67           2       64
1977       116           13          na           72           72       na         88               88           2       84
1978       156           17          na           89           89       na        112              112           2      108
1979       127           14           4           79           97       na         92               96           1       93
1980       100           12           4           63           80       na         73               76           1       75
1981       105           12           4           68           83       na         77               81           1       79
1982         97          11           4           65           81       na         73               77           1       75
1983       120           14           4           77           92       na         87               92           1       90
1984       136           16           4           88          102       na        100              104           1      102
1985       148           17           5           96          110       na        109              114           1      111
1986       168           27           7          137          143       na        145              152           1      149
1987       160           23           8          131          136       na        137              145           1      142
1988       157           25           7          124          129       na        132              139           1      136
1989       133           26           6          106          111       na        113              119           1      117
1990       119           15           5           90           93       na         96              101           1       99
1991       127           19           5           95           98       na        102              107           1      105
1992       142           21           6          112          115       na        118              124           1      121
1993       149           29           7          112          114       na        121              128           1      125
1994       209           50           7          172          174       na        186              192           1      189
1995       177           43           8          140          142       na        151              159           1      156
1996       142           39           6          116          119       na        123              130           1      127
1997       130           34           6          106          109       na        111              118           1      116
1998       127           46           7          105          108       na        113              119           1      118
1999       160           49           7          131          133       na        140              147           1      145
2000       173           55           6          141          145       na        152              159           1      157
2001       146           50           5          119          124       na        129              134           1      132
2002       142           49           5          115          120       na        124              129           1      128
2003       128           46           5          103          108       na        111              115           1      114
2004       143           53           4          123          127       na        130              134           1      133
2005       129            0           3           88           93       na        148              151           1      150
2006       109           31           3           75           79       na        124              127           1      126
2007         85          24           4           60           65       na        101              104           1      103
  a. NRAs including assistance to nontradables and non-product specific assistance.


                                                                                                              59
                                         60


b. NRAs including products specific input subsidies.
c. The Relative Rate of Assistance (RRA) is defined as 100*[(100+NRAagt)/
(100+NRAnonagt)-1], where NRAagt and NRAnonagt are the percentage NRAs for
the tradables parts of the agricultural and non-agricultural sectors, respectively.




                                                                                      60
                                           61


Appendix Table A2.1 (continued): Annual distortion estimates, Japan, 1955 to 2007
(c) Value shares of primary production of covereda and non-covered products,
                                      (percent)
                                Cabba   Cucu                  Mand
        Apple   Barley   Beef      ge   mber    Egg   Grape    arin   Milk   Onion   Pear
 1955      na        4      2      na     na     14      na      na      2      na     na
 1956      na        5      2      na     na      6      na      na      3      na     na
 1957      na        4      2      na     na      5      na      na      4      na     na
 1958      na        4      2      na     na      6      na      na      5      na     na
 1959      na        4      3      na     na      7      na      na      5      na     na
 1960      na        3      2      na     na      8      na      na      5      na     na
 1961      na        3      2      na     na     12      na      na      5      na     na
 1962      na        2      2      na     na     10      na      na      4      na     na
 1963      na        2      2      na     na     13      na      na      4      na     na
 1964      na        1      3      na     na     12      na      na      4      na     na
 1965      na        1      2      na     na     13      na      na      5      na     na
 1966      na        1      2      na     na     11      na      na      4      na     na
 1967      na        1      2      na     na      9      na      na      4      na     na
 1968      na        1      2      na     na     10      na      na      3      na     na
 1969      na        1      2      na     na     12      na      na      3      na     na
 1970      na        0      3      na     na     11      na      na      3      na     na
 1971      na        0      4      na     na     12      na      na      5      na     na
 1972      na        0      4      na     na     11      na      na      7      na     na
 1973      na        0      4      na     na     10      na      na      4      na     na
 1974      na        0      4      na     na      7      na      na      4      na     na
 1975      na       na      3      na     na      8      na      na      5      na     na
 1976      na        0      3      na     na     10      na      na      3      na     na
 1977      na        0      3      na     na     10      na      na      3      na     na
 1978      na        0      3      na     na      9      na      na      3      na     na
 1979      na        0      5      na     na      8      na      na      4      na     na
 1980      na        0      5      na     na     10      na      na      5      na     na
 1981      na        0      5      na     na      9      na      na      6      na     na
 1982      na        0      6      na     na      8      na      na      7      na     na
 1983      na        0      6      na     na      8      na      na      6      na     na
 1984      na        0      6      na     na      8      na      na      5      na     na
 1985      na        0      6      na     na      8      na      na      5      na     na
 1986       2        0      6       2      3      8       1       3      5       1      1
 1987       2        0      7       2      3      9       1       3      5       1      2
 1988       2        0      7       2      3      7       1       3      6       2      1
 1989       2        0      7       1      1      7       1       3      8       2      1
 1990       2        0      6       2      3      7       1       3      7       2      2
 1991       2        0      6       2      3      7       1       4      6       2      1
 1992       3        0      7       1      3      7       1       3      7       2      2
 1993       2        0      6       2      3      7       1       3      7       1      2
 1994       3        0      6       1      4      7       1       2      7       2      2
 1995       3        0      7       1      3      7       1       3      8       1      1
 1996       3        0      6       1      3      8       1       3      9       1      2
 1997       2        0      6       1      3      8       1       3      9       1      2
 1998       2        0      5       1      3      8       1       3      9       1      1
 1999       3        0      7       1      3      7       1       3      8       1      1
 2000       2        0      8       1      3      7       1       3      9       1      1
 2001       2        0      5       1      2      8       1       3    11        1      1
 2002       2        0      7       1      3      8       1       3      7       1      1
 2003       2        0      8       1      2      8       1       3      7       1      1
 2004       3        0      8       1      2      9       1       2      9       1      1
 2005       3        0      8       1      3     10       1       3      8       1      1
 2006       3        0      8       1      3      9       1       2      8       1      1
 2007       3        0      7       1      3      8       1       3      9       1      1




                                                                                     61
                                                    62


                                                                   Strawberr                   Non-cove
           Pigmeat    Poultry      Rice   Soybean        Spinach           y   Sugar   Wheat        red
   1955          2          1        44        na             na         na       na       3         28
   1956          3          2        40        na             na         na       na       3         37
   1957          3          0        44        na             na         na       na       3         34
   1958          3          1        50        na             na         na       na       3         28
   1959          2          1        48        na             na         na       na       3         27
   1960          2          1        45        na             na         na       na       3         30
   1961          2          2        41        na             na         na       na       3         30
   1962          3          3        39        na             na         na       na       2         35
   1963          5          3        35        na             na         na       na       1         35
   1964          5          2        29        na             na         na       na       2         43
   1965          6          3        29        na             na         na       na       1         40
   1966          6          3        28        na             na         na       na       1         44
   1967          8          3        29        na             na         na       na       1         44
   1968          8          3        33        na             na         na       na       1         38
   1969          9          4        31        na             na         na       na       1         39
   1970        11           4        24        na             na         na       na       0         42
   1971        12           4        18        na             na         na       na       0         43
   1972        12           5        16        na             na         na       na       0         45
   1973        12           5        17        na             na         na       na       0         48
   1974        11           4        25        na             na         na       na       1         44
   1975        12           4        25        na             na         na       na       1         43
   1976        14           5        19        na             na         na       na       0         46
   1977        16           6        20        na             na         na       na       0         43
   1978        14           6        18        na             na         na       na       0         48
   1979        14           6        16         0             na         na        0       0         46
   1980        14           6        14         0             na         na        0       0         46
   1981        13           6        16         0             na         na        0       0         44
   1982        14           7        15         0             na         na        0       0         42
   1983        14           7        14         0             na         na        0       0         45
   1984        13           8        15         0             na         na        0       0         44
   1985        15           8        13         0             na         na        0       0         44
   1986        19           7        11         0              1           2       1       0         27
   1987        17           7        10         0              1           3       1       0         27
   1988        15           6        10         0              1           3       1       0         30
   1989        13           7        10         0              2           3       1       0         31
   1990        13           6         9         0              2           2       1       0         32
   1991        11           6         8         0              2           3       1       0         34
   1992        12           6         9         0              1           3       1       0         30
   1993        12           5         6         0              1           3       1       0         36
   1994        14           6        12         0              1           3       1       0         27
   1995        12           6         8         0              1           3       1       0         33
   1996        12           6        10         0              0           3       1       0         31
   1997        11           6        10         0              1           3       1       0         32
   1998        10           6         9         0              2           3       1       0         35
   1999        12           6         9         0              1           3       1       0         33
   2000        12           5         8         1              1           4       1       0         33
   2001        12           6         7         1              1           4       1       0         33
   2002        13           6         7         0              1           4       1       0         34
   2003        13           5         6         0              1           4       1       0         36
   2004        14           7         8         0              1           4       1       0         27
   2005          7          4         9         0              1           4       1       1         34
   2006          5          5        11         0              3           4       1       0         34
   2007          4          4        12         1              2           4       1       1         34
Source: Anderson and Valenzuela (2008), from authors` spreadsheet a. At farmgate undistorted prices


                                                                                                      62
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Appendix Table A2: Annual distortion estimates, Korea, 1955 to 2007
(a) Nominal rates of assistance to covered products
                                             (percent)
                                                                                                 All
        Barl           Cab         Garli          Pepp      Pig   Poul           Soyb   Whe     cove
          ey   Beef   bage   Egg      c    Milk     ers    meat     try   Rice    ean      at    red
 1955    -11      7     na    na     na     na      na      -42    -43     -42    -33    -56     -38
 1956     36     36     na    na     na     na      na      -39    -31      -6    -28    -41      -4
 1957     90     54     na    na     na     na      na      -15      -6     26     -5    -32      27
 1958     63     62     na   -16     na     na      na       29       9     -6    -11    -43       3
 1959     27     35     na   -38     na     na      na       -8     13     -12     12    -43      -7
 1960     65     53     na   -45     na     na      na       -2       6     -4     29    -41       1
 1961     19     -3     na   -50     na     na      na      -41    -33     -44    -33    -56     -36
 1962     19     21     na   -40     na     na      na       16    -13     -44    -23    -45     -32
 1963   144      61     na   -13     na     na      na       68     12      25     61     -8      36
 1964   171      40     na    25     na     na      na       67     62      32     60     16      52
 1965     61     39     na    25     na     na      na      108     81      -2     44    -19      16
 1966     43     26     na    24     na     na      na      114     81     -10     55    -15       7
 1967     68     30     na    34     na    105      na      145    134     -14    104    -10      10
 1968     85     87     na    30     na    210      na      235    203     -11     38     -6      19
 1969   105     143     na     2     na    205      na      191    158       9     53     -6      32
 1970   144     119     na    28     na    216      na      207    152      39    131     10      64
 1971   149     120     na     9     na    133      na      286    153      63     76     17      82
 1972   198      85     na    -8     na     41      na      222     80      88    102     25      95
 1973     74     18     na    -7     na     60      na      193     52      11     48    -20      23
 1974     36     28     na   -21     na     94      na      112     80     -44     43    -31     -27
 1975     59     80     na   -17     na    133      na      154    107      -4     59    -20      13
 1976     76    128     na   -14     na    187      na      189    144      48    108     -4      60
 1977   112     218     na   -11     na    189      na      169    182      65    118     53      76
 1978   131     224     na    -2     na    175      na      270    212      66    174     61      89
 1979   129     162     na     6     na    261      na      232    164    123     152     42     131
 1980     57    137     na    12     na    223      na      181     90    109     199     89     112
 1981   125     186     na     4     na    194      na      285    122      98    252     86     119
 1982   170     190     na     8     na    169      na      196     90    122     290     92     131
 1983   241     159     na    36     na    153      na      106     87    130     292   110      129
 1984   238     144     na    14     na    160      na       78     82    133     232     84     123
 1985   293      68     na    23     na    128      na      164     75    169     275     69     144
 1986   399      97     30    11    250    211     175      144     64    196     302     99     158
 1987   417      93     30     3    250    238     175      100     57    222     415   171      161
 1988   336     178     30     7    250    162     175      119    112    226     410   204      177
 1989   341     195     30    54    250    187     175       97    126    259     407   178      195
 1990   363     207     30    39    250    152     175      190    142    276     459   222      209
 1991   494     223     30     9    250    289     175      172    136    254     461   265      200
 1992   461     206     30    40    250    158     175       95    138    254     508   201      184
 1993   534     171     30    12    310    197     281      116    165    283     554   195      198
 1994   769     197     30    39    383    222     421      173    198    262     559   197      219
 1995   632     223     30    59    210    154     204      130    171    340     734   200      214
 1996   403     200     29    15     44    128     108      138    185    336     604   134      186
 1997   635     144     29    17    232    147     153       88    161    284     453     99     177
 1998   449      71     29     7    373    118      87       60    135    199     393     64     127
 1999   596     162     29    35    207    157     176      166    206    313     945   116      210
 2000   740     139     28    30     30    205     192      124    220    390     908   157      216
 2001   412     175     28    42      8    105     221       93    201    374     702   137      194
 2002   561     254     28    40     88    154     144      122    164    422     780   130      221
 2003   572     142     27    55    205    139     267      134    131    395     750   129      211
 2004   528     129     27   105    282    145     162      199    180    350     647   124      226



                                                                                                       63
                                           64


2005   320   164   27   33   245   149   154     82   58   226   791   na   147
2006   322   200   27   28   116   173   335    125   75   205   813   na   159
2007   185   183   27   35    23    89   218    102   34   210   584   na   137




                                                                                  64
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  Appendix Table A2 (continued): Annual distortion estimates, Korea, 1955 to 2007
     (b) Nominal and relative rates of assistance to alla agricultural products, to exportableb and
         import-competing b agricultural industries, and relativec to non-agricultural industries
                                     (percent)
              NRA, all agric products,a by component                  NRA, agric tradables
                           NRA,         NRA,
       NRA,    NRA,       non-prod       all ag  NRA, all ag
       covere non-co uct-specif product            products               NRA, ag      NRA, all    NRA, all
          d    vered     ic support     s (incl   (incl NPS     NRA, ag   import-        agric      non-ag
       produc produc         (3)         NPS)        and        export-   competi      tradable    tradable
          ts     ts                    (4)=1+2   decoupled)      ables      ng          goods c     goods     RRAb
         (1)    (2)                       +3          (5)         (6)       (7)        (8)=6+7        (9)      (10)
1955     -38       -17          na        -28           -28          na       -36            -36        48     -57
1956      -4         0          na         -2            -2          na        -2             -2        35     -28
1957      27        10          na         17            17          na        26             26        35      -7
1958       3         1          na          2             2          na         3              3        41     -27
1959      -7        -3          na         -5            -5          na        -7             -7        69     -45
1960       1         0          na          1             1          na         1              1        66     -39
1961     -36       -17          na        -27           -27          na       -33            -33        37     -51
1962     -32       -14          na        -23           -23          na       -29            -29        34     -47
1963      36        13          na         27            27          na        35             35        26       7
1964      52        17          na         42            42          na        51             51        23      23
1965      16         6          na         13            13          na        15             15        27      -9
1966       7         3          na          6             6          na         7              7        23     -13
1967      10         4          na          8             8          na         9              9        23     -11
1968      19         9          na         15            15          na        19             19        21      -2
1969      32        13          na         25            25          na        31             31        18      11
1970      64        22          na         48            48          na        62             62        17      38
1971      82        26          na         61            61          na        79             79        12      60
1972      95        27          na         72            72          na        91             91        12      71
1973      23         9          na         18            18          na        22             22         9      12
1974     -27        -7          na        -21           -21          na       -24            -24         8     -29
1975      13         5          na         10            10          na        12             12         9       3
1976      60        23          na         48            48          na        58             58        11      43
1977      76        28          na         59            59          na        75             75        17      50
1978      89        33          na         66            66          na        86             86        12      66
1979     131        37           0         99            99          na       128            129        10     108
1980     112        34           1         80            81          na       107            108         8      93
1981     119        37           0         90            91          na       116            116         6     103
1982     131        39           1         97            97          na       127            128         7     114
1983     129        39           1         93            94          na       125            125         7     110
1984     123        38           1         90            90          na       119            120         6     107
1985     144        46           1        101           101          na       138            139         6     126
1986     158        69           1        127           127          na       156            156         6     141
1987     161        67           2        126           127          na       155            157         6     141
1988     177        69           3        141           141          na       169            172         6     157
1989     195        70           4        145           145          na       180            184         4     173
1990     209        76           6        160           166          na       196            201         4     190
1991     200        77           6        151           157          na       187            193         4     183
1992     184        81           6        149           155          na       179            186         3     176
1993     198        96           8        161           166          na       200            209         3     200
1994     219       109           9        178           182          na       226            235         3     226
1995     214        87          10        158           162          na       198            208         2     200
1996     186        50           7        124           127          na       145            153         3     146
1997     177        77           8        137           139          na       164            171         2     165
1998     127        75           6        111           113          na       129            134         2     129
1999     210        83           5        155           158          na       188            194         2     188
2000     216        60           5        138           142          na       166            171         2     166
2001     194        56           4        127           134          na       150            154         2     149
2002     221        66           5        139           146          na       168            173         2     168
2003     211        85           4        146           155          na       181            185         2     180
2004     226        91           3        159           166          na       196            199         1     195


                                                                                                                      65
                                                66


2005   147     49        4      87        102        na   114        117        2   114
2006   159     53        4      89        102        na   136        139        2   136
2007   137     46        4      76         86        na   100        104        2   101
  a. NRAs including assistance to nontradables and non-product specific assistance.
  b. NRAs including products specific input subsidies.
  c. The Relative Rate of Assistance (RRA) is defined as 100*[(100+NRAagt)/
  (100+NRAnonagt)-1], where NRAagt and NRAnonagt are the percentage NRAs for the tradables
  parts of the agricultural and non-agricultural sectors, respectively.




                                                                                          66
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Appendix Table A2 (continued): Annual distortion estimates, Korea, 1955 to 2007
(c) Value shares of primary production of covereda and non-covered products,
                                            (percent)
                                                                                                         Non-c
                        Cabba                         Peppe     Pigme    Poultr          Soybe           overe
        Barley   Beef      ge   Egg   Garlic   Milk      rs         at       y    Rice      an   Wheat      d
 1955       6      1      na     na      na     na         na       4        2     39       1       1      48
 1956       7      1      na     na      na     na         na       4        1     31       1       1      54
 1957       5      1      na     na      na     na         na       3        1     30       1       1      58
 1958       4      1      na      1      na     na         na       3        1     35       1       1      53
 1959       5      2      na      3      na     na         na       4        1     34       1       1      50
 1960       4      2      na      4      na     na         na       4        1     32       1       1      51
 1961       7      1      na      1      na     na         na       2        1     39       1       1      47
 1962       7      1      na      2      na     na         na       1        1     38       1       1      49
 1963       5      1      na      2      na     na         na       2        1     47       1       1      40
 1964       9      2      na      2      na     na         na       2        1     52       2       1      28
 1965      11      2      na      2      na     na         na       2        1     46       2       1      33
 1966      12      2      na      2      na     na         na       2        1     48       1       1      32
 1967      10      2      na      2      na      0         na       2        1     47       2       1      35
 1968      10      2      na      2      na      0         na       1        1     47       2       1      33
 1969       8      2      na      4      na      0         na       2        1     48       1       1      33
 1970       8      2      na      4      na      0         na       2        1     41       2       1      38
 1971       9      3      na      5      na      0         na       2        2     40       2       1      37
 1972       8      3      na      6      na      0         na       2        2     41       2       1      35
 1973       7      4      na      4      na      0         na       2        2     45       2       0      34
 1974       5      2      na      3      na      0         na       1        1     53       1       0      33
 1975       7      3      na      4      na      0         na       2        1     51       2       0      29
 1976       7      3      na      5      na      0         na       2        1     46       2       0      33
 1977       3      2      na      5      na      1         na       3        1     47       2       0      36
 1978       3      3      na      4      na      1         na       3        1     43       1       0      41
 1979       4      5      na      4      na      1         na       5        2     43       1       0      35
 1980       3      6      na      5      na      1         na       7        2     33       1       0      42
 1981       3      5      na      4      na      1         na       5        1     43       1       0      36
 1982       2      5      na      5      na      1         na       7        2     39       1       0      38
 1983       2      5      na      4      na      2         na       8        2     36       1       0      40
 1984       2      5      na      5      na      2         na       8        2     35       1       0      40
 1985       2      8      na      4      na      3         na       7        2     31       1       0      43
 1986       1      7       3      4       2      2          4       6        3     31       1       0      36
 1987       1      7       4      5       1      2          3       6        3     27       1       0      38
 1988       1      5       5      4       2      3          4       6        3     30       1       0      36
 1989       1      4       5      4       2      3          1       6        3     26       1       0      44
 1990       1      4       4      4       3      4          2       7        3     26       1       0      41
 1991       1      5       4      5       3      2          3       7        3     23       0       0      45
 1992       1      6       3      4       3      3          4       9        3     22       0       0      41
 1993       1      6       4      4       2      3          3      10        3     19       0       0      44
 1994       0      6       4      4       2      3          2       8        3     21       0       0      46
 1995       0      5       3      4       4      3          4       8        3     15       0       0      52
 1996       0      4       3      4       4      3          5       7        3     16       0       0      51
 1997       0      5       3      4       2      3          3       9        3     19       0       0      48
 1998       0      6       3      5       2      3          4      10        3     21       0       0      42
 1999       0      6       3      4       2      3          3       9        3     19       0       0      48
 2000       0      5       3      3       3      3          3       7        2     16       0       0      53
 2001       0      4       3      4       4      4          3       8        2     16       0       0      52
 2002       0      3       3      4       2      4          3       8        3     13       0       0      56
 2003       0      5       4      4       1      4          2       9        3     14       0       0      55
 2004       0      4       3      4       1      4          3       9        3     17       0       0      53



                                                                                                                 67
                                                 68


    2005     0      7     2      5    1      4        2   12    4   18   0   na   43
    2006     0      7     3      5    1      4        1   10    4   19   0   na   46
    2007     0      7     3      4    3      5        2    8    4   17   0   na   47
a
    At undistorted farmgate prices   Source: Authors` spreadsheet




                                                                                       68
                                                   69


Appendix Table A2 (continued): Annual distortion estimates, Korea, 1955 to 2007
(d) Trade statusa of covered products

        Barle          Cabb         Garli          Pepp   Pigm    Poult          Soyb   Whea
            y   Beef    age   Egg      c    Milk     er     eat     ry    Rice    ean      t
 1955     M       M      na    na     na     na      na      M      M       M      M      M
 1956     M       M      na    na     na     na      na      M      M       M      M      M
 1957     M       M      na    na     na     na      na      M      M       M      M      M
 1958     M       M      na    M      na     na      na      M      M       M      M      M
 1959     M       M      na    M      na     na      na      M      M       M      M      M
 1960     M       M      na    M      na     na      na      M      M       M      M      M
 1961     M       M      na    M      na     na      na      M      M       M      M      M
 1962     M       M      na    M      na     na      na      M      M       M      M      M
 1963     M       M      na    M      na     na      na      M      M       M      M      M
 1964     M       M      na    M      na     na      na      M      M       M      M      M
 1965     M       M      na    M      na     na      na      M      M       M      M      M
 1966     M       M      na    M      na     na      na      M      M       M      M      M
 1967     M       M      na    M      na      M      na      M      M       M      M      M
 1968     M       M      na    M      na      M      na      M      M       M      M      M
 1969     M       M      na    M      na      M      na      M      M       M      M      M
 1970     M       M      na    M      na      M      na      M      M       M      M      M
 1971     M       M      na    M      na      M      na      M      M       M      M      M
 1972     M       M      na    M      na      M      na      M      M       M      M      M
 1973     M       M      na    M      na      M      na      M      M       M      M      M
 1974     M       M      na    M      na      M      na      M      M       M      M      M
 1975     M       M      na    M      na      M      na      M      M       M      M      M
 1976     M       M      na    M      na      M      na      M      M       M      M      M
 1977     M       M      na    M      na      M      na      M      M       M      M      M
 1978     M       M      na    M      na      M      na      M      M       M      M      M
 1979     M       M      na    M      na      M      na      M      M       M      M      M
 1980     M       M      na    M      na      M      na      M      M       M      M      M
 1981     M       M      na    M      na      M      na      M      M       M      M      M
 1982     M       M      na    M      na      M      na      M      M       M      M      M
 1983     M       M      na    M      na      M      na      M      M       M      M      M
 1984     M       M      na    M      na      M      na      M      M       M      M      M
 1985     M       M      na    M      na      M      na      M      M       M      M      M
 1986     M       M      M     M      M       M      M       M      M       M      M      M
 1987     M       M      M     M      M       M      M       M      M       M      M      M
 1988     M       M      M     M      M       M      M       M      M       M      M      M
 1989     M       M      M     M      M       M      M       M      M       M      M      M
 1990     M       M      M     M      M       M      M       M      M       M      M      M
 1991     M       M      M     M      M       M      M       M      M       M      M      M
 1992     M       M      M     M      M       M      M       M      M       M      M      M
 1993     M       M      M     M      M       M      M       M      M       M      M      M
 1994     M       M      M     M      M       M      M       M      M       M      M      M
 1995     M       M      M     M      M       M      M       M      M       M      M      M
 1996     M       M      M     M      M       M      M       M      M       M      M      M
 1997     M       M      M     M      M       M      M       M      M       M      M      M
 1998     M       M      M     M      M       M      M       M      M       M      M      M
 1999     M       M      M     M      M       M      M       M      M       M      M      M
 2000     M       M      M     M      M       M      M       M      M       M      M      M
 2001     M       M      M     M      M       M      M       M      M       M      M      M
 2002     M       M      M     M      M       M      M       M      M       M      M      M
 2003     M       M      M     M      M       M      M       M      M       M      M      M
 2004     M       M      M     M      M       M      M       M      M       M      M      M
 2005     M       M       H    M      M       M       H      M      M       H      M      M


                                                                                               69
                                             70


    2006   M    M     H     M      M     M        H   M     M      H    M   M
    2007   M    M     H     M      M     M        H   M     M      H    M   M
a
 Exportable (X), import-competing (M) and nontradables (H).
Source: Anderson and Valenzuela (2008), based on authors` spreadsheet




                                                                                70
                                               71


Appendix Table A3: Annual distortion estimates, Taiwan, 1955 to 2002
(a) Nominal rates of assistance to covered products (percent)
              Beef         Egg       Pigmeat        Poultry     Rice   Wheat   All
  1955         -23           0           -39           -68       -49     96    -47
  1956          52           0            10           -37       -11     31     -6
  1957          47           0             9           -30        -3     38      1
  1958         -10           0           -20           -55       -48     53    -41
  1959           3           0            -1           -46       -37     23    -25
  1960          20           0            14           -34        -9     31     -3
  1961          49           0            24           -14         3     34      8
  1962          48           0            73              2      -13     32      2
  1963          51           0           120              4       -7     41     16
  1964          39           0            88            25        -7     42     13
  1965          66           0           118            20        -8     43     16
  1966          51           0           112            14       -14     30     11
  1967           4           0            87            18       -21     36      2
  1968           0           0           113            31       -24     43      2
  1969          24           0            69            23       -21     45      1
  1970          14           0            82            19         0     55     21
  1971          29           0           109            29         0     39     31
  1972          50           0           114            39         2     65     35
  1973          -4           0           111            27       -24      8     16
  1974          22           0            74            22       -25     -6      0
  1975         105           0           125            22       -15      0     15
  1976          73           0            57            20         3     29     20
  1977          89           0            45            42       -10     84     13
  1978          91           0            49            35       -19     90      9
  1979          41           0            28            31         3     83     15
  1980          54           0            46            39        17     81     29
  1981          72           0            48            65         8     81     27
  1982          75           0            44            63        29    115     37
  1983          88           1            41            85        46     na     46
  1984          96           2            33            66        63     na     47
  1985          95           9            41            57        73     na     53
  1986         104          19            56            70        84     na     64
  1987         108          17            72            87      110      na     81
  1988         102          27            90            98      108      na     93
  1989          97          61           123           110      142      na    122
  1990          97           9           112           107      146      na    112
  1991          97          -1            76           112      144      na     93
  1992          95          41            93           149      170      na    115
  1993          99          30           100           168      191      na    126
  1994         106          40           138           178      156      na    140
  1995          66          33           108           167      208      na    131
  1996          97           2           124           167      174      na    126
  1997         101          -1            94           195      149      na    114
  1998          85          11           108           242      134      na    128
  1999          63          44           221           372      174      na    212
  2000          44          33           201           347      189      na    202
  2001          95          22           168           254      195      na    169
  2002          79          19           150           237      226      na    164




                                                                               71
                                                         72


Appendix Table A3 (continued): Annual distortion estimates, Taiwan, 1955 to 2002
(b) Nominal and relative rates of assistance to alla agricultural products, to exportableb and
import-competing b agricultural industries, and relativec to non-agricultural industries
                          (percent)
                        Total ag NRA                       Ag tradables NRA
             Covered                         All
             products                     products                                    Non-agric
                            Non-covered    (incl                    Import-           tradables
         Inputs   Outputs    products      NPS)      Exportables   competing    All     NRA       RRA
  1955       0        -47             0       -22            -35          -7    -30           7    -35
  1956       0         -6             0        -3             -4          -3     -4           8    -11
  1957       0          1             0         0              1          -2      0           8     -7
  1958       0        -41             0       -20            -31          -3    -27          10    -33
  1959       0        -25             0       -14            -21          -3    -18          10    -26
  1960       0         -3             0        -1             -2          -1     -2           9    -10
  1961       0          8             0         4              7          -1      5           9     -3
  1962       0          2             0         1              1            1     1          10     -8
  1963       0         16             0         8             13            1    11           9      1
  1964       0         13             0         6             10            2     8           9     -1
  1965       0         16             0         7             12            2    10           9      0
  1966       0         11             0         5              8            2     7          10     -2
  1967       0          2             0         1              1            2     1           8     -7
  1968       0          2             0         1              1            3     1           9     -7
  1969       0          1             0         1              0            3     1           8     -7
  1970       0         21             0        10             16            2    13           8      5
  1971       0         31             0        14             23            3    18           7     10
  1972       0         35             0        16             26            5    20           8     11
  1973       0         16             0         7             12            3     9           8      1
  1974       0          0             0         0             -1            3     0           7     -6
  1975       0         15             0         7             12            3     9           7      2
  1976       0         20             0        10             16            4    13           7      6
  1977       0         13             0         7              9            8     8           7      1
  1978       0          9             0         4              5            6     5           7     -2
  1979       0         15             0         7             10            5     9           7      2
  1980       0         29             0        12             21            6    15           5      9
  1981       0         27             0        11             17            9    14           5      8
  1982       0         37             0        14             25            8    19           5     13
  1983       0         46             0        19             31          12     23           5     17
  1984       0         47             0        19             33          10     23           5     17
  1985       0         53             0        20             37            9    25           5     19
  1986       0         64             0        23             44          11     29           5     23
  1987       0         81             0        26             53          13     33           5     27
  1988       0         93             0        28             58          13     35           4     30
  1989       0       122              0        38             53          45     47           4     41
  1990       0       112              0        41             60          45     50           4     45
  1991       0         93             0        34             57          34     41           3     37
  1992       0       115              0        37             56          40     45           2     41
  1993       0       126              0        38             61          41     46           2     43
  1994       0       140              0        41             51          50     50           2     47
  1995       0       131              0        39             60          43     47           2     45
  1996       0       126              0        42             55          48     50           2     47
  1997       0       114              0        43             58          48     50           2     48
  1998       0       128              0        45             51          54     53           2     50
  1999       0       212              0        63             61          79     74           2     72
  2000       0       202              0        69             70          83     80           1     78
  2001       0       169              0        60             66          70     69           1     67
  2002       0       164              0        55             75          60     63           1     62
a. NRAs including assistance to nontradables and non-product specific assistance.
b. NRAs including products specific input subsidies.



                                                                                                         72
                                           73


c. The Relative Rate of Assistance (RRA) is defined as 100*[(100+NRAagt)/
(100+NRAnonagt)-1], where NRAagt and NRAnonagt are the percentage NRAs for the tradables
parts of the agricultural and non-agricultural sectors, respectively.




                                                                                      73
                                              74


Appendix Table A3 (continued): Annual distortion estimates, Taiwan, 1955 to 2002
(c) Value shares of primary production of covereda and non-covered products,
                                            (percent)
              Beef         Egg      Pigmeat        Poultry      Rice        Wheat   Non-covered
    1955         0           0          12               1        34            0            52
    1956         0           0          15               1        40            0            43
    1957         0           0          16               1        35            0            48
    1958         0           0          12               1        36            0            50
    1959         0           1          17               1        37            0            43
    1960         0           1          13               1        33            0            53
    1961         0           1          13               2        35            0            49
    1962         0           1            8              1        40            0            49
    1963         0           1            9              2        38            0            50
    1964         0           1            9              1        35            0            54
    1965         0           1            9              1        36            0            53
    1966         0           1            9              1        37            0            52
    1967         0           1          10               2        37            0            51
    1968         0           1            9              1        39            0            50
    1969         0           1          11               2        35            0            50
    1970         0           1          12               2        32            0            53
    1971         0           1          12               2        29            0            55
    1972         0           2          12               3        28            0            55
    1973         0           1          12               3        29            0            54
    1974         0           1          12               2        38            0            46
    1975         0           2          10               2        36            0            50
    1976         0           2          15               3        31            0            49
    1977         0           2          17               4        26            0            51
    1978         0           3          16               4        26            0            52
    1979         0           2          18               4        22            0            54
    1980         0           2          14               4        21            0            58
    1981         0           2          14               4        21            0            59
    1982         0           2          15               4        18            0            61
    1983         0           3          16               5        17            0            59
    1984         0           3          16               5        15            0            60
    1985         0           3          16               5        14            0            62
    1986         0           3          17               5        11            0            64
    1987         0           2          16               5         9            0            68
    1988         0           2          14               5        10            0            69
    1989         0           2          14               6         9            0            69
    1990         0           3          17               6        10            0            63
    1991         0           3          19               5         9            0            64
    1992         0           3          17               5         7            0            68
    1993         0           3          15               5         7            0            70
    1994         0           3          14               5         7            0            70
    1995         0           3          16               5         6            0            70
    1996         0           4          17               6         7            0            67
    1997         0           5          17               7         8            0            62
    1998         0           5          14               7         8            0            65
    1999         0           5          11               6         8            0            70
    2000         0           5          14               7         8            0            66
    2001         0           5          16               7         7            0            64
    2002         0           5          14               7         7            0            67
a
 At undistorted farmgate prices
Source: Anderson and Valenzuela (2008), updated from authors` spreadsheet



                                                                                            74
                                              75


Appendix Table A4: Consumer tax equivalents for covered agricultural products, Japan, 1955 to
2007
                                        (percent)
           Apple   Barley    Beef   Cabbage   Cucumber   Egg    Grape   Mandarin   Milk   Onion
  1955        na       27      -5       na          na   -64       na        na     49       na
  1956        na       27      44       na          na    18       na        na     47       na
  1957        na       30      43       na          na    43       na        na     41       na
  1958        na       49      38       na          na    18       na        na     52       na
  1959        na       42      18       na          na     0       na        na     31       na
  1960        na       57      44       na          na     0       na        na     51       na
  1961        na       47      65       na          na    -6       na        na     75       na
  1962        na       19      79       na          na     4       na        na     92       na
  1963        na       23      90       na          na    -9       na        na    125       na
  1964        na       18      63       na          na    -6       na        na    137       na
  1965        na       12     122       na          na   -11       na        na    112       na
  1966        na        3     115       na          na    -2       na        na    103       na
  1967        na        6     115       na          na    -2       na        na    112       na
  1968        na       14     136       na          na    -1       na        na    199       na
  1969        na       15     167       na          na    -9       na        na    284       na
  1970        na       20     128       na          na    -1       na        na    266       na
  1971        na        5     106       na          na    -9       na        na    157       na
  1972        na       34     112       na          na     3       na        na     92       na
  1973        na       -7     114       na          na    -9       na        na    167       na
  1974        na      -23      69       na          na     3       na        na    145       na
  1975        na       na     205       na          na     5       na        na    144       na
  1976        na        1     203       na          na   -14       na        na    337       na
  1977        na       14     242       na          na    -5       na        na    502       na
  1978        na       42     266       na          na     1       na        na    545       na
  1979        na       24     159       na          na    -4       na        na    400       na
  1980        na       14     138       na          na    -3       na        na    259       na
  1981        na       21     138       na          na    13       na        na    173       na
  1982        na       14     123       na          na    -3       na        na    146       na
  1983        na       51     139       na          na    -2       na        na    214       na
  1984        na       46     146       na          na     2       na        na    265       na
  1985        na       74     156       na          na    16       na        na    308       na
  1986       63      186      252        5          23    51       52        20    453       83
  1987       20      225      230        5          23    -4       54        20    494       83
  1988       20      178      227       22          26    16       56        20    364       24
  1989       20      128      179        5         153    20      179        20    206       27
  1990       20        90     168        5           5    19       87        20    230       29
  1991       20      107      164        5          17    37       64        20    268       48
  1992       20      124      143        5           7     6       56        26    254       32
  1993       39      134      183        5          44    15       80        20    290      128
  1994       20      205      228      134          14    37      122       137    360      164
  1995       27      153      183      135          24    54      120        59    295       93
  1996       19        70     196       78          14    27      106        88    208       83
  1997       19        83     200      112          32    25       86        19    205      106
  1998       55      110      196      161          33     6      116        51    200      206
  1999       18      178      184      148          45    56      158        18    281      232
  2000       44      135      174      192          44    62      157        42    296      222
  2001       56      103      206      153          50    27      154        17    185      260
  2002       17      111      105      165          39    22      172        25    324      300
  2003       17        88      98      152          42     2      195        20    305      292
  2004       21        93     163      222          40    23      203        56    256      341
   2005      17      244       39      239          47    17      202        37    112      342



                                                                                            75
                            76


2006   17   83   39   186        37   17   175   84   110   285
2007   17   16   39   187         8   17   157   17    59   255




                                                            76
                                              77


Appendix Table A4 (continued)
           Pear   Pigmeat   Poultry   Rice   Soybean    Spinach   Strawb.   Sugar   Wheat   Total
 1955        na        3       -40      49         na       na        na       na      35     24
 1956        na       -3       -41      65         na       na        na       na      32     48
 1957        na        2        93      76         na       na        na       na      30     59
 1958        na        0        59      83         na       na        na       na      41     65
 1959        na       87        95      93         na       na        na       na      41     69
 1960        na       94        99      98         na       na        na       na      42     75
 1961        na       89        37      85         na       na        na       na      35     62
 1962        na       55        13      66         na       na        na       na      29     52
 1963        na       28        33      93         na       na        na       na      33     63
 1964        na       33        31      85         na       na        na       na      25     59
 1965        na       23        34    109          na       na        na       na      32     67
 1966        na       17        27    109          na       na        na       na      27     67
 1967        na        0        37      91         na       na        na       na      21     58
 1968        na       11        45      97         na       na        na       na      26     67
 1969        na       10        25    115          na       na        na       na      31     74
 1970        na      -10        24    150          na       na        na       na      32     81
 1971        na        3        53    168          na       na        na       na      30     82
 1972        na        3        45    211          na       na        na       na      48     90
 1973        na       -2        38    128          na       na        na       na      -5     63
 1974        na      -12        24      29         na       na        na       na     -35     22
 1975        na        4        26      73         na       na        na       na     -27     50
 1976        na       -5        35    142          na       na        na       na       2     74
 1977        na       -7        37    197          na       na        na       na      54     98
 1978        na       20        40    244          na       na        na       na      71    135
 1979        na        4        17    242           0       na        na       59      34    109
 1980        na        6        22    205           0       na        na       56      22     92
 1981        na       18        24    191           0       na        na      118      28     92
 1982        na        7        12    215           0       na        na      145      30     86
 1983        na       13        20    264           0       na        na      204      50    108
 1984        na       19          6   289           0       na        na      312      56    115
 1985        na       -1          7   359           0       na        na      276      61    126
 1986       42        -5        29    590           0      103        10      205    155     146
 1987       23         1        21    683           0      103        10      183    209     146
 1988       38         7        23    600           0      147        10      153    161     141
 1989       38         1          7   510           0        5        10      113      95    116
 1990         8       -4        11    481           0        5        10      148    101     103
 1991       28        11        14    504           0       33        10      152    136     112
 1992       38        16        19    597           0      119        12      161      98    111
 1993         8        1        44    754           0      103        32      164    103     124
 1994       38         4        37    729           0      430        60      149    103     147
 1995       83         8        31    717           0      140        46      145      97    129
 1996       29         7        36    501           0      583        22      139      43    105
 1997       16         8        32    410           0      234        19      131      60    107
 1998       87        16        39    389           0       54        11      172      68    112
 1999      106        12        69    514           0      173        33      190      98    128
 2000      219        13       108    560           0      199        34      149    103     124
 2001      199        16        73    559           0      108        20      150      68    110
 2002      224         9        71    587           0      112         9      144      60    100
 2003       61       -11        73    601           0      134        10      170      60     91
 2004       84         1        45    565           0      119         9      145      52    107
  2005        0       94        12    501           0       91         9      142    207     100
  2006     233       162        12    303           0        3         6      136      13     82
  2007      77       159        12    242           0        3         6       81       0     62




                                                                                             77
                                                       78


Appendix Table A5: Consumer tax equivalents for covered agricultural products, Korea, 1955 to
2007 (percent)

                                                                                                   All
        Barle          Cabb         Garli          Pepp     Pigm    Poult          Soyb   Whea   cover
            y   Beef    age   Egg      c    Milk     ers      eat     ry    Rice    ean      t      ed
 1955    -12      7     na     na    na      na     na      -42     -43     -39    -40     -62    -37
 1956     37     36     na     na    na      na     na      -39     -31      -6    -36     -44     -6
 1957     90     54     na     na    na      na     na      -15      -6      23    -11     -36     23
 1958     63     62     na    -16    na      na     na       29       9      -6    -18     -47      2
 1959     26     35     na    -38    na      na     na       -8      13     -11      6     -42     -7
 1960     62     53     na    -45    na      na     na       -2       6      -4     25     -32      1
 1961     18     -3     na    -50    na      na     na      -41     -33     -39    -41     -53    -31
 1962     18     21     na    -40    na      na     na       16     -13     -39    -31     -36    -28
 1963    133     61     na    -13    na      na     na       68      12      24     35      -5     33
 1964    158     40     na     25    na      na     na       67      62      31     53      14     51
 1965     56     39     na     25    na      na     na      108      81      -2     37     -18     15
 1966     41     26     na     24    na      na     na      114      81      -9     50     -17      8
 1967     63     30     na     34    na     105     na      145     134     -13     97      -9      8
 1968     77     87     na     30    na     210     na      235     203     -10     24      -5     15
 1969     88    143     na      2    na     205     na      191     158       8     50      -6     28
 1970    122    119     na     28    na     216     na      207     152      32    120       9     51
 1971    134    120     na      9    na     133     na      286     153      53     65      13     67
 1972    153     85     na     -8    na      41     na      222      80      81     90      23     81
 1973     51     18     na     -7    na      60     na      193      52       9     25     -13     16
 1974     23     28     na    -21    na      94     na      112      80     -29     16     -25    -16
 1975     37     80     na    -17    na     133     na      154     107      -3     38     -15      9
 1976     50    128     na    -14    na     187     na      189     144      44     89      -2     48
 1977     65    218     na    -11    na     189     na      169     182      59     87      32     67
 1978     72    224     na     -2    na     175     na      270     212      58    146      38     80
 1979     63    162     na      6    na     261     na      232     164     115    116      29    115
 1980     24    137     na     12    na     223     na      181      90      97    173      43     96
 1981     72    186     na      4    na     194     na      285     122      97    246      47    113
 1982    109    190     na      8    na     169     na      196      90     119    301      44    126
 1983    192    159     na     36    na     153     na      106      87     126    295      52    124
 1984    201    144     na     14    na     160     na       78      82     127    212      45    113
 1985    246     68     na     23    na     128     na      164      75     157    252      44    128
 1986    322     92     30     11   250     211    175      144      64     195     56      80    133
 1987    381     84     30      3   250     238    175      100      57     222     77     157    146
 1988    336    174     30      7   250     162    175      119     112     226     83     204    163
 1989    343    193     30     54   250     187    175       97     126     257     92     179    174
 1990    342    207     30     39   250     152    175      190     142     274     96     209    190
 1991    380    223     30      9   250     289    175      172     136     254     51     204    179
 1992    397    206     30     40   250     158    175       95     138     252     68     173    166
 1993    409    171     30     12   310     197    281      116     165     276     87     150    173
 1994    529    197     30     39   383     222    421      173     198     253     75     102    174
 1995    435    222     30     59   210     154    204      130     171     329     87     138    182
 1996    305    199     29     15    44     128    108      138     185     333     67     101    154
 1997    302    130     29     17   232     147    153       88     161     282     42      47    130
 1998    254     55     29      7   373     118     87       60     135     198     40      36     96
 1999    411    162     29     35   207     157    176      166     206     312     83      80    162
 2000    364    139     28     30    30     205    192      124     220     389     79      77    162
 2001    312    175     28     42     8     105    221       93     201     372     73     104    154
 2002    362    254     28     40    88     154    144      122     164     420     67      84    168
 2003    301    142     27     55   205     139    267      134     131     395     57      68    148
 2004    299    129     27    105   282     145    162      199     180     350     57      70    139



                                                                                                         78
                                             79


 2005   217   164   27    33   245   149   154     82   58   226   113   na   135
 2006   167   200   27    28   116   173   335    125   75   205   110   na   147
 2007   139   183   27    35    23    89   218    102   34   210    52   na   123
Source: Authors` spreadsheet




                                                                                    79
                                               80


Appendix Table A6: Consumer tax equivalents for covered agricultural products, Taiwan, 1955
to 2002
                                        (percent)
               Beef         Egg      Pigmeat        Poultry      Rice       Wheat   All covered
  1955          -23           0          -39           -68        -49          na            -47
  1956           52           0           10           -37        -11          37             -3
  1957           47           0            9           -30         -3          na              0
  1958          -10           0          -20           -55        -48          46            -35
  1959            3           0           -1           -46        -37          32            -21
  1960           20           0           14           -34         -9          36              0
  1961           49           0           24           -14          3          25              9
  1962           48           0           73              2       -13          20              3
  1963           51           0          120              4        -7          21             16
  1964           39           0           88            25         -7         -20             11
  1965           66           0          118            20         -8          27             16
  1966           51           0          112            14        -14          27             12
  1967            4           0           87            18        -21          29              3
  1968            0           0          113            31        -24          31              3
  1969           24           0           69            23        -21          34              2
  1970           14           0           82            19          0          34             21
  1971           29           0          109            29          0          31             29
  1972           50           0          114            39          2          35             33
  1973           -4           0          111            27        -24           3             13
  1974           22           0           74            22        -25         -30             -2
  1975          105           0          125            22        -15          -4             14
  1976           73           0           57            20          3           0             21
  1977           89           0           45            42        -10           2             16
  1978           91           0           49            35        -19          -6             10
  1979           41           0           28            31          3           0             15
  1980           54           0           46            39         17           6             29
  1981           72           0           48            65          8          -3             28
  1982           75           0           44            63         29          -4             37
  1983           88           1           41            85         46          na             49
  1984           96           2           33            66         63          na             49
  1985           95           9           41            57         73          na             53
  1986          104          19           56            70         84          na             66
  1987          108          17           72            87       110           na             82
  1988          102          27           90            98       108           na             93
  1989           97          61          123           110       142           na           120
  1990           97           9          112           107       146           na           110
  1991           97          -1           76           112       144           na             94
  1992           95          41           93           149       170           na           116
  1993           99          30          100           168       191           na           125
  1994          106          40          138           178       156           na           137
  1995           66          33          108           167       208           na           127
  1996           97           2          124           167       174           na           125
  1997          101          -1           94           195       149           na           112
  1998           85          11          108           242       134           na           124
  1999           63          44          221           372       174           na           196
  2000           44          33          201           347       189           na           184
  2001           95          22          168           254       195           na           163
  2002           79          19          150           237       226           na           153
Source: Anderson and Valenzuela (2008), based on authors` spreadsheet




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