Preventive Effect of the Measure of Direct Payment in Hilly and Mountainous Areas on Abandonment of Farmlands: Evidence from the Paddy and Upland Areas of Hokkaido

Abstract

The Measure of Direct Payment in Hilly and Mountainous Areas (HMAs) was introduced in 2000 for the first time in the history of agricultural policy in Japan. The main objectives of the measure are to prevent the abandonment of farmlands and revitalize rural communities to maintain and enhance the multi-functionality of agriculture. Participation in the measure is voluntary, mainly through community-based agreements. The measure is revised every 5 years, and the third phase has been operational since April 2010. The aim of this study was to evaluate the degree to which the measure has slowed the acceleration of abandonment of farmlands. For the first phase of the measure (between 2000 and 2004), limited data availability limited our focus to the paddy and upland fields of Hokkaido as a whole and of the Kamikawa and Sorachi subprefectures in particular. Among the 212 cities, towns, and villages in Hokkaido, 117 were eligible for the measure, and 106 of these participated during the first phase. Over 95% of the targeted HMAs in Hokkaido were covered by the measure. The data used were gathered from the 2000 World Census of Agriculture and Forestry and the 2005 Census of Agriculture and Forestry. All of the agricultural communities in Hokkaido recorded in the census were classified into two groups, namely, treated and untreated. The former consisted of rural communities in participating municipalities that had paddy and/or upland fields as well as HMAs, whereas the latter included all of the remaining communities, other than those without paddy and upland fields. By using the difference-in-differences estimation method, we found that, in the treated communities in both Hokkaido overall and the Kamikawa and Sorachi subprefectures, the measure slowed the rate of increase in abandonment of cultivated lands by about 0.8% points.