Japan: Imports made forest growth abundant, yet debt on planted forests outrageously high

Neo-liberal leave-everything-to-the-market policies would be Japan’s salvation, the Prime Minister declared, presenting himself as the  apostle of reform after four and a half years in office without a  single reform in place. Under timber “liberalization” policies adopted a quarter century ago, the price of cedar logs plummeted from 23,000 yen per cubic meter (in 1980) to 4,400 yen per cubic meter (in 2004) as cheap, imported Canadian, Russian, Southeast Asian forests were felled to feed Japan’s demand.

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Japan’s forests still cover around two-thirds of the country, but
their condition has deteriorated steadily as the agencies responsible
for them run up debt and reduce forest workers. Today, forest-related
public debt throughout the country is put at about 1.2 trillion yen.
In this typhoon, flood, and earthquake-prone land, the wisdom and
sustainability of leaving everything to the market is open to

Shiga Prefecture is surrounded by woods and mountains, and
abounds with nature, with Lake Biwa nestled at its center. The forests
not only supply abundant water to Lake Biwa, nourishing life, but also
serve as a natural dam to shield residents and their properties
against floods and landslides. Furthermore, they serve extremely
important functions as habitats for diversified flora and fauna.

But the public forestry corporations that have continued to protect and
cultivate these irreplaceably precious natural assets have accrued
towering debts. The two public corporations in Shiga Prefecture have a
combined debt of 100 billion yen. They are not alone. In fact, the
total debt of the 42 public forestry corporations in 38 prefectures
across Japan tops 1.2 trillion yen, making it difficult for them to
sustain themselves. The public corporations were established as part
of a national project to plant trees.

The project aimed to meet the
skyrocketing demand for timber prompted by the rapid economic growth
of the late 1950s and early 1960s. It took advantage of a special
measures law for forestry profit-sharing. In accordance with the law,
private land owners signed an agreement with the corporations to
divide the proceeds from lumber operations. The corporations
shouldered the cost of maintaining the forests during the 50 years it
takes before they are ready to be felled.

These maintenance expenses were covered with loans from the Agriculture, Forestry and Fisheries Finance Corp., as well as some from the individual prefectures. The government also took the initiative to afforest mountainous areas where it is difficult for land owners to plant trees. In total, over 430,000 hectares of new forest have been planted to date. But with the liberalization of timber imports, starting around 1960, and the influx of cheap imports as a result, the price of domestic timber plummeted. This caused serious problems for public corporations, which had counted on proceeds from lumber to recover their investments and repay their loans.

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