Down on the farm
Posted by ampontan on Monday, January 25, 2010
THE GLOBAL INFOTAINMENT MEDIA is intensely curious about trends in Japan, both to satisfy its voracious appetite for content and to maintain its preferred narrative of Japan as East Asia’s Goofball Kingdom. But here’s one trend they seem to have overlooked. Prof. Ito Motoshige of Tokyo University and the director of the National Institute for Research Advancement recently interviewed Itochu Corp. Chairman Niwa Uichiro for publication. This is how Prof. Ito set up the interview:
“Interest in agriculture is intense now. Publications ranging from business and economics journals to fashion magazines are covering the subject, and the slang term no-gyaru has even arisen to denote the young women engaged in farming.”
No-gyaru is a pun based on nogyo, the Japanese word for agriculture. Who knew that it was hip to be a hayseed in Japan nowadays? Certainly not the readers of the English-language media.
Itochu is a large trading company with its fingers in a bakery full of pies, including the refining and sale of Chinese rice, so Mr. Niwa has at his fingertips a cornucopia of fascinating statistics about farming in Japan.
He asserted in the interview that Japanese agriculture could be internationally competitive, and the way to achieve that goal would be to maximize the use of land as an asset to produce value and to inculcate a sense of entrepreneurship among the farmers. Here are some highlights from that interview.
By the numbers
12% of Japanese territory is farmland
16% of Japanese territory was farmland 45 years ago
8.3% of Japanese farmland is not cultivated.
The latter figure represents an increase of three times in 20 years, and is equal to the land area of Saitama Prefecture.
2.99 million people: The farming population in 2008, a drop of 80% in 49 years
60%: The percentage of the farming populaton 65 or older
Demonstrating the fundamental problem with bureaucracies the world over:
290,000 people: The number of JA group employees 45 years ago (The central committee of agricultural cooperatives)
300,000 people: The number of JA group employees today
410,000 households: Employed in agriculture only, 16% of the total involved in agricultural production either full time or part time
56%: The ratio of Japanese cropland accounted for by rice paddies
4.2 tons of rice per unit of production area: The global average
6.7 tons of rice per unit of production area: The Japanese average
The Itochu president argued that Japanese rice is not as expensive to produce as some might think. Production costs per kilogram range from JPY 344 for 0.5 hectare plots or less, to JPY 160 for 10-15 hectare plots. He says that Itochu’s costs for refining and selling Chinese rice are JPY 105 per kilogram, and don’t include export costs.
Japanese rice would be price competitive, he maintains, even if all agricultural tariffs around the world were immediately removed. The key is to promote agribusiness on a large scale rather than through small farms.
This would be financially beneficial for agricultural workers, too. Converted to hourly wages, the producers on larger farms make JPY 3,100, or more than salaried employees. In contrast, those on the smallest farms make JPY 300 per hour, less than convenience store workers.
Mr. Niwa suggests that rice production should be concentrated in areas with broad plains, such as Hokkaido and the Tohoku region, while areas in the more mountainous western Japan, where it would be more difficult to operate larger farms, should switch to other fruits and vegetables. He says the latter farms would produce crops competitive with imports. For example, he reports that the more expensive Japanese cherries still sold well against imported American cherries due to their superior taste and freshness.
He proposed the delivery of food directly from the production site to the consumption site as an avenue that should be explored further. (I can vouch for this myself; we get apples shipped directly to our house from different production areas in Japan once a month from October to March. I’d recommend it to anybody.)
The government gets in the way
Mr. Niwa laments, however, that laws on land use and agriculture haven’t changed in 50 years. The government’s policy over the past half century has been to encourage acreage reductions to prop up rice prices. He holds that this has been a complete failure from a market perspective, and he used an analogy to demonstrate the bankruptcy of the approach.
It is as if, he suggested, a company responded to poor sales figures by slashing production and raising prices.
He is not the first to claim that the Ministry of Agriculture has been a complete a waste of time and resources. He also mentioned the zokugiin of the Diet, the MPs allied with different ministries and who promote their interests in the legislature. The zokugiin, he says, work to maintain those policies to receive the electoral support of rice farmers in particular, who benefit financially from the higher rice prices and the subsidies for acreage reductions.
The ruling Democratic Party of Japan is taking a step backwards from moves to encourage agribusiness and larger farms that were begun during the LDP administration of Abe Shinzo. The DPJ offered as part of their election platform a promise to provide subsidies to individual farm households.
That, says Mr. Niwa, is a mistake. The formulation of agricultural policies should be left to local governments, based on local conditions, and focus on policies for enterprises devoted exclusively to agriculture, whether operated by an individual or by a corporation.
He also suggests that local governments could form committees to lease farmland from individual farmers, aggregate it, and lease it in turn to those who want to work the land, including companies involved in agribusiness.
This is already happening today, and not all those companies are purely agricultural concerns. For example, Fukuoka City-based Kyudenko, primarily engaged in providing electric power facility engineering services, announced last week it had formed an agreement with the city of Amagusa, Kumamoto Prefecture, to grow olives. The agreement starts in FY 2010 and will run for three years. The company will plant 6,700 olive trees on unused cropland in the city, and will study cultivation techniques and the potential for profitability over that three-year period. If they like what they see, they will continue to grow olives. Kyudenko says it is open to using either public land or privately owned land.
In short, applying market principles would improve Japanese food production, make it a competitive enterprise, and solve the problems of unused land, the aging of the farming population, and the lack of successors. Key for the success of that endeavor would be to devolve authority to the local level and remove the influence of the bureaucracy and national legislator-lobbyists.
Where have we heard that one before?
Exploration and discovery
How did the media miss the chance to find out about the no-gyaru phenomenon and this discussion of domestic agricultural reform? They didn’t turn the page.
This interview appeared in last September’s edition of the monthly Voice. It was the same issue that published an article by Prime Minister Hatoyama Yukio explaining his political philosophy. It later was translated into English for the New York Times and caused a minor stir for its eccentric positions and apparent tilt away from the United States in foreign policy matters.
Mr. Hatoyama’s article ended on page 141, while this one began on page 142. The quote about no-gyaru was in the first paragraph.
Why should the impractical thought processes of a man destined to have the political lifespan of a firefly be of greater interest than a disussion of how a nation feeds itself?