(Nikkei: February 17, 2016 – p. 19)
On Feb. 4, the Trans-Pacific Partnership agreement was signed by its 12 participating countries. From now on, the nations will focus on completing their preparations for the pact’s implementation. Tariff barriers on agricultural and fisheries products will be lowered in stages among the participating countries. This will be a major boost for Japan’s exports.
With the signing of the TPP agreement on the horizon, the Nikkei conducted a questionnaire survey of agricultural corporations nationwide. A total of 48% of those surveyed responded that they were starting to engage in export promotion. The agricultural corporations are aiming to find ways to expand business overseas, as domestic demand in Japan will shrink [in the years ahead] with the decrease in the population.
With an eye to expanding exports, Oshima Farm (Chikusei City, Ibaraki Prefecture), which raises rice on its 20 hectare rice-paddy farm, participated in a business fair held in Canada in December 2015. The farm’s strong point is its production of a wide variety of rice to suit consumer needs. It currently grows 20 different types of “staple” rice alone.
Oshima Farm says that their red and black rice, which are high in nutrition, have been well received in Canada, in addition to their specialized varieties used in sushi. Yasuji Oshima, head of Oshima Farm, says enthusiastically, “We want to expand exports mainly to North America.”
Trading companies and new corporations
In addition to expanding agricultural product exports, Japan must also enhance these products’ price competitiveness. To increase production efficiency, some agricultural corporations are moving to introduce expertise used in countries that have an advanced agricultural sector.
Aiming to increase exports, tomato-grower Sun Fresh Matsushima (Matsushima Town, Miyagi Prefecture) set up a new agricultural production corporation jointly with Okaya & Co., a trading company specializing in steel and machinery. Using a technology popular in Holland, Sun Fresh Matsushima has adopted a hydroponic method for raising tomatoes in large glass-paned greenhouses.
Parallel to starting the shipment of tomatoes to the domestic Japanese market from the autumn of 2016, Sun Fresh Matsushima is initiating research with an eye to exporting its tomatoes through Okaya & Co.’s vast network overseas. The company is looking to substantially expand demand both in Japan and overseas. Sun Fresh Matsushima Representative Director Masataka Utsumi says, “We are thinking about how to expand our client base, regardless of the TPP.”
Impact of the nuclear accident
Not all agricultural corporations can aim to expand their exports. The survey asked those agricultural corporations that indicated they are not considering expanding exports why they had made that decision. Responses varied: “We can survive with domestic demand alone” was the most frequent response, followed by “There is little demand overseas for our products” and “We are not price competitive enough to manage overseas.”
The nuclear accident triggered by the Great East Japan Earthquake has also had an impact on the expansion of exports. As of Feb. 2, there are 26 countries and regions that impose some kind of restriction on Japanese food products. These include the United States, Singapore, and Brunei, which are TPP participants.
How will Japan leverage the TPP to develop its agricultural industry? Producers face different issues depending on their geographical region, farm size, and products. A strategy for the next generation of Japanese agriculture is not possible by relying solely on the dynamism of “active producers” who are endeavoring to take advantage of overseas markets. (Slightly abridged)
