JAPAN MINISTRY SAYS OPEN FARM TRADE WOULD HIT U.S. Japan's Agriculture Ministry, angered by U.S. Demands that Japan open its farm products market, will tell U.S. Officials at talks later this month that liberalisation would harm existing U.S. Farm exports to Japan, a senior ministry official said. "Imports from the U.S. Would drop due to active sales drives by other suppliers," the official, who declined to be named, said. "Japan is the largest customer for U.S. Farm products and it is not reasonable for the U.S. To demand Japan liberalise its farm import market," he said. Agriculture Minister Mutsuki Kato has said if the U.S. Insists Japan open its protected rice market it will also open its wheat market, where volume and origin are regulated to protect local farmers. Australia and Canada could then increase their wheat exports as they are more competitive than the U.S., He said. End-users would also buy other origins, grain traders said. U.S. Agriculture Secretary Richard Lyng, who is due to visit Japan for talks between April 16-27, has said he will ask Japan to offer a share of its rice market to U.S. Suppliers and remove quotas on U.S. Beef and citrus imports. Other countries are already cutting into the U.S. Market share here. Australia, the largest beef supplier to Japan, has been trying to boost exports prior to the expiry of a four-year beef accord next March 31. Imports of U.S. Corn have fallen due to increased sales from China and South America, while Japanese soybean imports from Brazil are expected to rise sharply this year, although the U.S. Will remain the largest supplier. U.S. Feedgrain sales will also drop if Japan opens up its beef imports, since Japan depends almost entirely on feedgrain imports, mainly from the U.S., Japanese officials said. An indication of the U.S. Position came last December when Under Secretary of Agriculture Daniel Amstutz said Japan has the potential to provide one of the largest boosts to U.S. Agricultural exports, with the beef market alone representing some one billion dlrs in new business. The U.S. Has also asked the General Agreement on Tariffs and Trade to investigate the legality of Japanese import controls on 12 other farm products, including fruit juices, purees and pulp, tomato juice, ketchup and sauce, peanuts, prepared beef products and miscellaneous beans. To help calm heated trade relations with the U.S., Japan's top business group Keidanren has urged the government to remove residual import restrictions on agricultural products. But Agriculture Minister Kato has ruled out any emotional reaction, and the senior ministry official said the farm issue should not become a scapegoat for trade pressure in the industrial sector. "Japan is the largest buyer of U.S. Farm products, and these issues should not be discussed on the same table," the official said.