Japan’s Short-term Food Crisis Overshadows More Prolonged Emerging Challenge

25 March 2011 FDI Team

Background

As Japan grapples with an immediate food and water crisis as a result of the earthquake, more concerning for the government is the loss of up to 70 per cent of its farmers over the next 5-10 years as “baby-boomers” leave their farms. The age demographic realities of the farming population will make it extremely difficult for the country to maintain its self-sufficiency – let alone increase its self sufficiency as the government plans. The government may need to concede that its self-sufficiency ideals are unsustainable and that the time has arrived for it to remove its tariffs and develop new trading agreements.

Comment

The recent disasters in Japan, triggered by the earthquake of its north coast, have caused havoc through the nation. Although it is difficult at this stage to state the damage done to the agricultural regions of North East Japan, it is predicted to have damaged at least four per cent of Japan’s farming land. Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF) reported that 4.8 million tonne of feed (20 per cent of total feed production) is produced in the northern region close to the disaster centre. 

The affected agricultural areas are hard hit. Devastations from the disasters include: salination of farming land, damage to feed mills, greenhouses and livestock operations, and destruction of vegetable and fruit crops. There is also the possibility of nuclear contamination of what remains of the agricultural produce. 

Damage to agricultural infrastructure and lands have long-term affects to Japan. The salination of farming land alone leads to reduced fertility, causing lower crop yields. There are also two types of nuclear contamination. The first, contact contamination, is more immediate and manageable. It could be solved simply by washing the surfaces with water. The second, food uptake, is much more threatening and devastating. This occurs when

dangerous radioactive materials become part of the food chain. It permeates the food chain when it is brought through rain to fall on the grass, which is then eaten by livestock. Once it is within the food chain, it is very difficult to be rid of it.

However, there is a far more alarming trend emerging in regards to Japan’s food and water security over the next couple of decades. 

The number of Japanese farmers has been dwindling as their average age has been increasing. Last year MAFF reported that of the three million Japanese farmers, between 60 and 70 per cent were over 60 years old. According to the Japanese Ministry of Agriculture, Forestry and Fisheries, there are currently just 2.5 million farmers in comparison with 2.9 million in 2004 and over 6 million in 1955. 

On top of this, there is a growing trend in Japan to abandon the agricultural industry to pursue other jobs in more urban areas. The agricultural industry has not been as profitable as it has been in the past. Farmers are reliant on subsidies from the government in order to continue to farm. 

Further, the dietary habits have changed over the years rendering rice (a product of which Japan could nearly provide entirely domestically) less desirable. The consumption of meat has risen and the feed that is required to supply the market must be almost entirely imported.  

Food self-sufficiency

These factors must raise some alarm in the Japanese government as they continue to strive for a higher ratio of food self-sufficiency on a calorie supply basis. Currently, Japan is able to supply 40 per cent of food from domestic markets. As a generation of farmers disappears the self-sufficiency rate will most likely decrease, not increase to the 50 per cent ratio by 2020 that the Government is seeking. 

Today’s Japanese agricultural policy is based on the Food, Agricultural and Rural Areas Basic Act of 1999 which tackled the initial signs of decline in Japanese agricultural industry. Over the past 12 years, Japan has continually strived to increase their level of self-sufficiency primarily through income support and other initiatives. Income support is provided to farmers who are faced with rising production costs and low market prices in an attempt to protect the domestic market from import competition. 

One government initiative is offering short term agricultural traineeships. Due to a rise in environmental consciousness, young Japanese urban dwellers have taken an interest in agriculture. A rich cultural heritage in rice production and environmental ideals has resulted in a romantic view of farming. The increase in interest can be seen through morning classes in agriculture run by Marunouchi Morning University. It has also been glamorised by young Tokyo pop stars that spend one day-a-week farming in nearby agricultural regions. Six month traineeships organised by the government have seen an increase in interest in agriculture, attracting young underemployed city youth to farms. 

Will these measures be enough to increase food self-sufficiency? 

Income support is criticised due to the fact that it fails to induce economies of scale in Japanese agriculture. Rather, it helps economically inefficient farms to continue farming through government subsidies. It also discourages larger farms from increasing the size of their farms (and so increasing their profit margins). Perhaps if the government aided the farmers seeking expansion, farming might produce more monetary incentives. The industry might then attract serious investors.  A report into the Japanese farming sector published in 2007 by the Australian Bureau of Agricultural and Resource Economics (ABARE) found that the average size of Japanese farms are increasing, albeit slowly. In 1955 the size of an average farm was one hectare whereas this has increased to 1.6 hectares. ABARE also found that Japanese farms have traditionally always been small and it was only in the turn of the century that the government lifted the restraints and allowed joint stock companies to purchase farm land. Expanding farms to increase profits may be an option in the aim to maintain and raise self-sufficiency levels.

It may be possible to increase food self-sufficiency by government promotion of an increase in the size of farms. Income support may be supporting the existing Japanese farmers, but will it be beneficial for the future of farming? 

The short term traineeships provided by the government are not adequate training to effectively run a farm. Farming is a lifetime profession needing more than even several years of training. Further, it has been reported that the renewed interest in farming is regarded sceptically by the elderly farmers. It is viewed as a superficial fad, likely to disappear as other opportunities arise in the comfort of a densely populated and well connected city.

Agricultural trade policy 

The current Agricultural Minister, Kano, has a conservative political history and, most likely, will not loosen the Japanese agricultural trade policy. This may be due to the political strength of the Japanese Central Union of Agricultural Coops (JA). It represents around nine million members which are either actively farming or indirectly linked to farming. Although the number of regular members (actual farmers) of JA has been consistently in decline since 1975, the number of its associate members (non-farmers) has risen.  JA holds a considerable amount of political strength due to its organisational structure and history. 

There are, however, some changes being made in favour of opening up trade. Prime Minister Naoto Kan said late last year that his government would “look into participating in” the Trans-Pacific Partnership (TPP) agreement with an aim to build a Free Trade Area of the Asia-Pacific. If Japan joins the TPP it may not be allowed to exempt rice from its removal of barriers to trade. This will prove difficult for Japanese rice farmers who receive significant government protection. It will also prove difficult for wider Japan with MAFF estimating a 4.1 trillion yen annual loss from domestic agricultural output because of the tariff elimination. JA is coordinating a national campaign in opposition to the TPP talks due to the estimate by MAFF that rice production could drop by 90 per cent. JA could lose many members as the farmers may not be able to sustain the sudden reduction of tariff protection.

Just before the Japanese disasters occurred earlier this month, Japan had begun talks with the Southern African Customs Union in order to establish free trade agreements. These talks

have since been put on hold. Perhaps the change in circumstances of Japan’s agricultural sector will cause Japan to reassess its emphasis in these talks, ensuring that agricultural trade is its focus. 

In order to maintain the level of food self-sufficiency that Japan holds today, let alone increase it to 50 per cent, Japan needs to reverse a trend that has been more than a decade in coming and increase or maintain its farming population. 

Despite ambitions to the contrary, it is most likely that in the next ten years Japan will have no choice but to rely more heavily on imports. As it has less of a domestic industry to protect, the wisdom of maintaining protectionist measures will be challenged. Japan’s problem is not unique. It is a challenge that North America, Europe and Australia will deal with as its baby-boomers are not replaced by a new generation of farmers.

Nicole Bosveld

Researcher

FDI Global Food and Water Crises Research Programme

Any opinions or views expressed in this paper are those of the individual author, unless stated to be those of Future Directions International.

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