	japan farm reform a key to trimming  surplus basic reform of japan s protected farm sector is a key to shifting its economy away from export to domestic led growth a vital step if it is to trim its  surplus securities analysts said the farm sector which is protected by import tariffs and quotas propped up by subsidies and price supports and sheltered by the tax system has ample room for change they said in economic terms reform would be a plus said christopher chew of brokerage firm james capel and co the ultimate cost of the existing system is food prices twice those in europe and two to three times those in the u s the analysts said spending on food accounts for about one quarter of the average household s budget and roughly pct of the gross national product gnp according to a study by chew reducing these prices could increase household spending power by five pct his study said the money could be spent on products which would have a more direct impact in boosting domestic growth it added there s a lot of slack a u s government official in tokyo said all that money could be spent on something else direct central government subsidies to the farm sector amount to some five billion dlrs per year independent estimates put total subsidies from all sources as high as billion and the analysts said much of that money is wasted changing tax laws to encourage city residents who only farm on weekends to put their land up for sale for residential development would also give a boost to domestic spending economists said housing construction is the key strategic variable in the expansion of domestic demand wrote chihiro nakajima professor at kyoto gakuen university japanese business groups are calling for staged farm reform to shift some of the burden of  friction and economic restructuring away from the manufacturing sector and onto the farm sector employers groups also want change if you really want to expand domestic demand the way to do it is not to raise wages recklessly but to reduce commodity prices bumpei otsuki president of the japan federation of employers associations told a recent press conference external pressures are rising as the u s and europe seek removal of tariffs and quotas to help reduce their  deficits with japan but vested japanese interests opposed to change remain well entrenched dimming prospects for quick reform analysts said although the full time farm population is falling and there are signs the ldp is paying more attention to urban constituencies the ruling party remains heavily dependent on farm votes in the rural areas one rural vote is worth several city votes due to the pattern of constituency borders the ldp is already in political trouble over its tax reform plan and does not want to raise another sticky issue so soon the analysts said consumer groups are politically weak and tend to accept the traditional view that higher prices are a small fee to pay for national food security they said powerful agricultural cooperatives are fiercely opposed to import liberalisation but are more flexible about reforms aimed at stepping up productivity they said reform when it comes will be in response to specific pressure rather than an all embracing program said chew reuter 
