The United States and the European Union have grabbed most of the headlines during the WTO ministerial conference in Hong Kong for their perceived intransigence on the issue of agricultural subsidies and domestic support mechanisms. While the world's two largest economies incur the wrath of the developing world, two Asian countries equally culpable for this agricultural protectionism have flown lower under the radar. Japan and South Korea have much in common when it comes to their agriculture sectors, most obviously rice. The diminutive grain enjoys almost mystical status among consumers and has done for centuries, while hot-button issues such as conservation of rural traditions and food security continue to dominate their respective domestic politics. Both countries' consumers also currently pay over the odds for the 'superior' taste of the homegrown produce, four times as much as in international markets in South Korea and even more in Japan, thanks to a cocktail of tariffs and price supports that increase the price by more than 500 per cent. This combination of factors has created an international perception that neither country is ever likely to budge from its protectionist stance, which arguably explains the relative lack of attention in Hong Kong - militant Korean farmers notwithstanding. But in relative baby steps, the status quo in both nations is altering in favour of liberalisation. While tariff-free imports are not just around the corner, there are signs South Korea and Japan are beginning to lay the groundwork. Public opinion is playing an inherent part in the change. 'There are signs that public opinion is shifting,' said the consul for economic affairs at South Korea's Hong Kong consulate, Jessy Yeunju Jang, ahead of this week's conference. 'Up until the 1990s farmers enjoyed huge domestic support because many of the migrants to the cities still had families living on and running farms. 'But especially since the Asian financial crisis there has been a growing awareness in Korea that the country has to remain competitive within a global trading system, and that has shed a different perspective on the issue of agricultural subsidies.' Any political breathing space is welcome for the government in a country where the rural vote frequently tips the balance between the Grand National Party and the ruling Uri Party. Last month, the parliament finally passed a bill that would open the local market to more rice imports and see foreign rice appearing in South Korean supermarkets for the first time. The changes amount to a trickle at best, with foreign rice on supermarket shelves accounting for only 0.5 per cent of total consumption, said Suh Jin-kyo, a researcher at the Korea Rural Economic Institute. A further minimum market access provision requires that South Korea imports 225,500 tonnes of rice in 2005, rising to 408,000 (8 per cent of consumption) by 2014, after which the market would become fully liberalised. Mr Suh said the impact of the government's policy was already being felt via a 15 per cent decline in domestic rice prices. 'Domestic rice prices are currently four times those of international markets, so full liberalisation is quite clearly a significant step that needs to be planned for,' Mr Suh said. The grace period is regarded as a necessary concession to allow the agricultural sector to impose structural reforms necessary to be competitive in an open market. 'Food security will always be a political issue in Korea, and increasing the competitiveness of the agricultural sector is a large part of that,' Mr Suh said. 'Rural people are getting much older and there will be significant structural changes in the next two decades. More than 50 per cent of farm managers are currently over 50 and the agricultural population currently makes up 8 per cent of the population, but I predict that proportion will halve and provide a big opportunity to increasing farming scale in Korea.' Large-scale operations currently account for 5 per cent of all farms but 20 per cent of the output, but the Rural Economic Institute predicts large-scale farms will come to account for 15 to 20 per cent of the total by 2015 and account for 60 per cent of production. Mr Suh is also urging the government to introduce programmes to increase the income and number of younger people entering the farming industry, including training for high-school students in rural areas and loans to young farmers to boost capacity and productivity. In Japan, more than a decade of economic recession and stagnation in the 1990s is said to have had a similar effect on consumers as in South Korea as people flock to low-cost restaurants such as Yoshinoya that have succeeded in removing at least part of the stigma attached to overseas foodstuffs. That trend has led to Japan becoming the largest net food importer in the world in terms of value, with Japanese consumers gaining at least 50 per cent of their calorie consumption from overseas products. Those statistics ensure that the fate of Japan's rural communities in such places as Shikoku and Kyushu remains a 'political hot potato' for a ruling Liberal Democratic Party long reliant on the agricultural lobby for support. But according to Tokyo-based Morgan Stanley economist Robert Feldman, 'the politics behind Japanese agriculture protection is changing rapidly'. A major driver of this change is the fact that farming accounts for only 1 per cent of the country's gross domestic product. Japan's domestic agriculture protection has a long way to reform before it will be acceptable to other World Trade Organisation members. Data from the Organisation for Economic Co-operation and Development shows Japanese farmers effectively receive 56 per cent of their annual revenue from aid. A recent proposal currently under discussion at the Ministry of Agriculture and scheduled for implementation in 2007 would see a major structural change in an ailing sector where the average age of farmers in many areas is more than 65 years. The proposals include further deregulation of corporate farming to encourage smaller farmers to sell their land to commercial farms and help eliminate the abandonment or under-use of small plot holdings; linking farming assistance to farms over 4 hectares to encourage larger-scale farming; and removing price support in favour of direct income support - regarded as less trade-distorting under WTO rules. 'In fact the trend of liberalisation has already been around for some time,' said Kuga Nobunori, a researcher at the Policy Research Institute at Japan's Ministry of Agriculture. 'The government has long been attempting to reduce the tariffs and price support and the new policy framework is really an extension of that same trend.' But even as the policy document comes up with some far-reaching conclusions about the need for greater efficiency in Japan's agricultural sector as it gradually opens to competition under WTO rules, it also shows that hot-button political issues will not fade away any time soon. While the plan calls for increased agricultural exports to countries such as China, it also pushes for a significant increase in domestic self-sufficiency in agricultural production on both a calorie and value basis to 45 per cent and 76 per cent respectively by 2015. The more things change, the more things stay the same.