April 28, 2017 0205 GMT
Postwar institutional reforms
There were various obstacles that hampered economic recovery, but with the introduction of the necessary reforms they were overcome one after another. These reforms helped establish the basic framework of postwar Japanese economy, and it also helped prepare the ground for the rapid economic growth that would occur later on.
One of these reforms was in the field of landlord-tenant relationship, called Land Reform.
The main objective of Land Reform was the dissolution of the landlord-tenant relationship and the establishment of an independent landholding farming class, said Professor Watanabe.
GHQ (General Headquarters) viewed the prewar feudal-like structure of agriculture as a system that had failed to stop Japan from sliding into war and now was holding back efforts to democratize Japan; therefore, with their encouragement, agriculture was reformed.
“However, reform did not just come ‘from above’; even in the prewar period there were movements in this direction. The landlord system was perhaps suitable up to a certain point, but as the economy grew, it became more and more of a constraint on society. Indeed, in place of the system of landlords and tenants, a large number of small independent farmers were established. Since they owned the land, the new system gave incentives to boost agricultural production,” Professor Watanabe explained.
In the new system, the farmers were not left to themselves. The government introduced protective policies towards agriculture. Also a body was established to manage and supervise the production of food. This raised farmers’ incomes (elimination of income inequality), which increased purchasing power of the farmers and in turn increased domestic demand, she said.