(Nikkei: February 18, 2016 – p. 21)
In his policy speech on Jan. 22, Prime Minister Shinzo Abe declared, “We will take all possible measures to reinforce the condition of Japan’s agriculture and stabilize agricultural management so that producers can continue production with peace of mind.” The import of inexpensive foreign agricultural products is thought certain to increase when the Trans-Pacific Partnership agreement comes into force. Price competition will heighten further as a result.
Seeking to cut costs
In a questionnaire survey conducted by the Nikkei, about half of all agricultural corporations nationwide indicated that they thought prices for domestic agricultural products would decrease with the TPP. For Japan’s agriculture to survive it must enhance the added value of its products and thereby heighten price competitiveness. Producers are not waiting for government measures but rather are moving forward with building a foundation so that they can compete with foreign products.
The greatest weapon that Japanese producers have is their ability to finely tailor products to suit consumers’ needs.
Japan’s domestic production cannot be said to be ready for full-fledged competition with overseas products. When survey respondents were asked what issues Japanese agriculture faced, the most frequent response given was “the aging of producers.” According to a Ministry of Agriculture, Forestry and Fisheries survey, the average age of people engaged in farming was 66.3 in 2015. That figure increased by three years in the past ten years. In other words, pensioners make up the core of the farming population.
The aging of the farming population makes it difficult for producers to create a long-term vision for their business.
The urgent need to introduce structural reforms as well
Many survey respondents also mentioned “the poor quality of national and local governments’ agricultural promotion policies” and “high production costs” [as issues that Japanese agriculture faced]. A rice-growing agricultural corporation said, “The reason that costs do not go down is because the National Federation of Agricultural Cooperative Associations (Zennoh) sets the prices of fertilizer and production materials.” Producers share the recognition that for agriculture to survive it will take not only self-help efforts by farmers but also structural reforms.
The removal or lowering of tariffs will be ten or more from now for some agricultural items. In his policy speech, Prime Minister Abe said, “The time and effort of the farmers . . . will come to be properly appreciated. That is the TPP Agreement.” How will Japan address issues that farmers cannot overcome on their own? There is not much time remaining for structural reforms. (Abridged) [This is the second in a two-part series on the agricultural sector’s response to the TPP. The first part, “Seeking ways to increase agricultural exports,” appeared in Japan Press Highlights on February 17, 2016.]