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Japan Agribusiness Report Q3 2009
Market |
Agriculture, Farming & Raw Materials |
Report Type |
Market Research |
Country |
Japan |
Published |
29 June 2009 |
Number of Pages |
60 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Japan's soybean production in 2008 of 225,000 tonnes was sufficient to meet only around 5% of demand
In the Japan Agribusiness Report for Q3 2009, we introduce the new Soybean Outlook. Soybeans are an important part of the traditional Japanese diet and have been cultivated in the country for centuries.
Now, however, as with most foodstuffs, Japan is reliant on imports to meet demand.
Japan's soybean production in 2008 of 225,000 tonnes was sufficient to meet only around 5% of demand.
The Ministry of Agriculture, Forestry and Fisheries (MAFF) is hoping to decrease this overwhelming reliance on imports by encouraging the production of more soybeans at home. In 2007, the ministry set a target of raising annual production to half a million tonnes by 2017. This would be enough to meet around half of Japan's demand for soybeans for direct food consumption. The country would still be totally reliant on imports for crushing to produce oil and meal.
The problem with domestic soybean production, as with much of Japanese agriculture, is that in its current form, it is not profitable. Costs are high and farms are small, restricting economies of scale. Even in Hokkaido, where the country's largest soybean farms are, the average farm size is a mere 1-2 hectares (ha). Unless there is a major shake up in production techniques with the development of large-scale, commercial farms, the government will have to continue pouring funds into subsidies if it is to have any hope of production reaching its modest target.
With the rapid rise in world food prices in 2007 and 2008 followed by the fierce recession in Japan, farming has been pushed up the agenda, both for policymakers and the public. Job losses in the cities and disillusionment with the uncertainties of life in a modern, market economy has spurred a revival of interest in farming among the young.
The majority of farmers in Japan are now well into old age, with almost 50% aged over 70 and a further 20% aged between 60 and 70. This is a serious risk to the future health of the sector, at least in its current form. The government is hoping that rising unemployment in the cities will see more young people choosing the farm life. Funds have been allocated to retraining unemployed workers in agricultural skills.
In the local press, stories have begun to appear following the fortunes of young urbanites who have given up the comforts of city living and moved into the farming sector. With Japan's economy forecast to contract 6.1% this year, it is understandable that interest in the perceived security of farming would rise.
While an influx of new blood can only be good news for the sector, what agriculture in Japan really needs is a whole new system of large efficient farms if it is to ever wean itself off government hand outs and become competitive internationally. Whether interest in farming will last beyond the economic slowdown also remains to seen.
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