The Peculiar Rationality of Beef Import Quotas in Japan

Abstract

Extract: Japan's current protection of livestock producers via import quotas could be provided by a deficiency payment scheme in which the producer price support is financed by an import tariff. This would save Japan hundreds of millions of dollars annually. However, such a policy change may reduce revenues of both wholesale distributors of imported beef and the government importing agency by a similar amount. It is politically unlikely that consumer gains would be shared with these losers. A more limited liberalization involving no change in wholesaler and import agency revenue would be possible only if the beef demand elasticity exceeds (-) 1.5.