Transformation of Japan’s rice policy toward innovation creation for a sustainable development

This research clarifies the necessity to transform Japan’s rice policy toward the creation of innovation, particularly to market-creating innovation. We introduced two analytical methods in the research. One is a survey of existing research on Japan’s rice policy and innovation in paddy field management, and the other is the case analysis of innovation by focusing on the spread of rice flour and organic rice cultivation. We obtained the following conclusions from the analysis. Rice policy (pushing institutions) so far is not having the desired effects on creating and sustaining well-functioning system in Japan’s rice sector. Although rice production adjustment was officially abolished, it still exists in the form of game equilibrium and customary institutions. Even if there are structural reform conditions (liquidation measures) in the economic domain, a major innovation has not occur due to Peasantism as the cultural belief system was dominant in the political and social domains for institutions. Therefore, to change such a situation and realize a sustainable development of rice sector, a policy transformation toward innovation creation, particularly to ‘market-creating innovation’ is called for. In addition, it is important to consider innovation as a process of organizational learning that involves the drastic change of collective cognition among producers, consumers and governments. Market-creating innovations can change the culture of the entire society, including the cognition of producers and consumers toward rice, rice products and rice cultivation. Furthermore, policy for promoting environment-friendly rice cultivation should pay attention to the public concern over economic impacts on the quality of the global commons that implies de facto gradual transfer of environment rights from the corporate sector to the community at large.