Goals and Consequences of Rice Policy in Japan, 1965–80

The change in welfare of producers and consumers, government cost, and the deadweight loss arising from the various forms of government interventions into the rice market in order to protect domestic producers in Japan are estimated in a partial equilibrium framework. Results of the quantitative analysis indicate that the motivation of the government was to minimize budget costs in achieving the target level of producer price support, while consumer welfare had an insignificant weight in the government's objective function. It is aiso found that acreage control is a “second best” policy to reduce social inefficiency produced from other forms of market distortions.