Report of the OTO Advisory Council (April 12, 1993)

3-(10) Relaxing import procedures on feed grains

1. Complainant: the U.S. Embassy

2. Ministry concerned: Ministry of Agriculture, Forestry and Fisheries

3. Complaint:

Corn imported for livestock feed is exempted from customs duties in order to promote the livestock industry. But to prevent its diversion to other uses, it must be either steam-flaked or mixed with certain secondary ingredients such as bran, seed cake. As regards barley, all barley is under government administration, according to the provisions of the Food Control Law. The complainant believes that these measures push up the price of feed and constitute an import barrier, and that they should be abolished.

4. Results of deliberation:

This issue has been discussed by Japan and the U.S. for many years and the complainant and the ministries or agency concerned have been unable to reach a conclusion because of the considerable differences of understandings on the matter.

In this regard, it is necessary to give due consideration to the possibility that a misunderstanding that our markets are closed could be created, despite the fact that Japan imports virtually all feed grains, if this matter is further repeatedly brought up as a market access problem.

To cope with this situation it is considered to be necessary for the ministry or agency and the U.S. embassy, together with private sector parties, to continue to discuss the issue in order to share understanding on whether the current import systems on corn for livestock feed as to whether the current systems do indeed constitute an import barrier.

The sluggish growth of corn imports is basically due to the increased imports of meat as a result of beef import liberalization, which have put a damper on the increase in the number of heads of livestock raised in Japan. However, in the background to the complaint there seems to be the perception on the part of the complainant and some livestock farmers that steam-flaking processing of corn for single ingredient feed constitutes an unreasonable restriction on livestock farmers' feeding methods. Therefore, in ministry or agency concerned should continue to explain the necessity for this processing.

Government decision (May 27, 1993)

With regard to the current systems for feed grains, it is necessary for the ministry or agency concerned to continue discussions with the claimant, together with private sector parties, in order to share a common understanding of the issue.