[matter omitted] [1]

Item five was S.C.A.P.'s request for comments on the Japanese
Government's proposals for rural land reform. Derevyanko
criticised these proposals very strongly. The full text of his
statement will be sent by bag when available. I made the following
statement:

In the two working days available for the examination of this item
on the agenda, I regret that I have not been able to make a
careful enough study of the material to enable me to make any
confident o[r] [2] final comment. However, I here set down certain
observations which represent my first thoughts on the issues
raised. I hope they may be of some help to the Council in its
discussions.

1. The average maximum area o[f] land which may be held by non-
operation owners should be reduced from 5 to 3 cho, or possibly
less. (Note: An average holding of 5 cho is high for Japan. The
total area of land held by owners possessing more than 5 cho is
approximately 1,800,000 cho and if from this area is deducted the
land worked by owners plus the permissible maximum of 5 cho per
resident non-operating owner, the amount of land actually
available for distribution might well be less than 1,000,000 cho
or less than one third of the tenant cultivated land. Reduction of
the maximum average from 5 cho to 3 cho or less would increase
considerably the area of land available for transfer to tenants
and avoid the danger of the scheme being substantially
ineffective.)
2. The method of arranging the transfer should be such as to
protect the tenants' interests equally with those of the
landlords. (Note: Under the existing act initial [negotiations are
carried out between the] landlord and the tenant. If agreement is
not reached, the question is referred, firstly, to the local Rural
Land Commission and then to the Prefectural Rural Land Commission.

The tenant's position is so much weaker than the landlord's that
there is considerable danger of his being forced into an
unsatisfactory agreement as a result of direct negotiation with
the landlord. [If] the proposed sale is referred to the local
Rural Land Commission the constitution of these Commissions under
the Act appears to weight the scales heavily in favour of the
landlord's point of view.)
3. The position of tenant farmers should be protected by
legislation, designed to enforce the following-
1. Fair rents,
2. Payment of rent in cash if requested by the tenant,
3. Written tenancy contracts.

(Note: [Even] if the reform were completely effective, the problem
of tenant proprietor[ship would remain for some] years until all
transfer were completed. With a partly effective reform, which
must be the reasonable planning assumption, there will still
remain a large number of tenants. It is important, therefore, that
efforts should be made to improve conditions of tenants.)
4. Reform of rural taxation should be linked with the plan for
land reform. (Note: At present farmers are taxed more heavily than
merchants and manufacturers. This heavy taxation is a serious
obstacle to any substantial increase in the economic stability and
standard of living of the rural population.)
5. In order to promote the economic security of farmers it is
important to ensure not only stable prices for their products, but
price control of essential raw materials, particularly
fertilisers. (Note: Fertilisers account, on the average, for 20 to
25% of the cost of production for farmers.)
6. Every possible measure should be taken to foster the
development of rural co-operative activities as they are an
important factor in stabilising incomes and reducing farm costs.