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Agriculture, Forestry and Fisheries Industries Overview

11, 01. 2004

Current State and History

Lags Significantly Behind in Modernization Due to Overprotective Administrative Measures

Since olden times, the staple diet of the Japanese consisted mainly of rice, seafood, vegetables and legumes. However, with the Westernization of the diet that came along with economic growth, Japanese people have been eating less and less rice and fish after World War II. On the other hand, the consumption of such items as bread, beef and pork has expanded.

Rice field in Minamiuonuma City, Niigata Prefecture, that is a chief producing district of Koshihikari, the most popular rice brand in Japan
Rice field in Minamiuonuma City, Niigata Prefecture, that is a chief producing district of Koshihikari, the most popular rice brand in Japan

As a result of this Westernization of the diet, there is now an abnormal situation in which Japan has become virtually completely dependent on food imports from abroad. Exceptions are rice, eggs, vegetables and some fruits. Circumstances are such that the majority of fish and soybeans - some of the chief ingredients of Japanese cuisine - as well as feed for poultry farming must also be imported. In FY2002, Japan' food self-sufficiency rate fell to roughly 40 percent, a level that is lowest among developed nations of the world.   On the supply side, farming households, which had been overprotected by the government, caused Japan to lag significantly behind in terms of the modernization of agriculture. The aging of the farming population and a lack of sufficient numbers of people to succeed them became a serious issue. Japanese consumers were forced to buy rice at a cost that was several times higher than international prices as a result of the government's agricultural policies that pumped massive subsidies to farmers.

The Import of Beef and Oranges Liberalized in 1988

Meanwhile, demand to open the market intensified both within Japan and from abroad. Among agricultural products, much of the vegetables, fruits and livestock products had been liberalized before the 1980s. However, the import of beef and oranges were not liberalized until 1988, and as for the Japanese staple - rice - there was deep-seated resistance by domestic agricultural organizations. It was not until 1999 that rice was finally liberalized in exchange for the levying of a stiff tariff.

Japan was also once the world's largest fisheries nation. However, with the younger generation shying away from fish, as well as the ban on commercial whaling and other restrictions on fishing activities (including those through the conclusion of fisheries agreements with the United States, Russia, China, South Korea and other neighboring nations), annual fisheries production in Japan, which was at 12 million metric tons in the late 1980s has fallen to below 7 million metric tons recently. Some time has already passed since Japan gave up its position as a world fisheries giant to China.

Three Key Points towards the Future

Point 1
Will Entry by Joint Stock Companies Lead to the Revitalization of Farming in Japan?

The Revised Agricultural Land Law was enacted in November 2000, making it possible for private joint-stock companies to acquire agricultural land as an "agricultural production corporation." What this meant, in essence, was that private join-stock companies, which had previously been prohibited from doing so, would be able to participate in the farming sector. From now on, the entry of private companies will advance into such agricultural fields as flowers, vegetables, fruits, livestock, fertilizer, animal feed, and even the inner citadel of Japanese agriculture-rice. If and when this happens, the adoption of biotechnology, such as genetic recombination, will advance in the farming sector, and there is a possibility that Japanese agriculture will once again regain vitality and a competitive edge.

Point 2
Can the Japan Agricultural Cooperatives Survive?

The Food Control Law, which was emblematic of Japan's agricultural protection policy, was the backbone of the country's post-war agricultural policy despite the fact that it retained a wartime system set up during World War II. The forces that were used for the execution of this policy were the Japan Agricultural Cooperatives (JA). Although it was belatedly, the JA did make efforts towards internal reform, which included the extensive consolidation of JA organizations. However, with the failure of the JA-affiliated financial institution and the departure of large-scale farming households from the organization, etc., it seems unlikely that the decline of the JA's foundation will come to an end. Some strongly believe that there is a limit to voluntary reform within the JA. The JA's presence will most likely decline further in inverse proportion to the entry of private joint-stock companies to farming.

Point 3
Can New Opportunities Be Found through Processing and Freezing Techniques as well as Biotechnology?

  Five major fisheries companies - Maruha Corporation, Nippon Suisan Kaisha, Ltd., Kyokuyo Co.,Ltd. , Nichiro Corporation and Hoko Fishing Co., Ltd. - supported Japan when the country was a fisheries giant. They possessed giant fleets that conducted large-scale fishing both in inland and open seas. However, with the prohibition of commercial whaling and enhanced nationalistic protection of fishery resources by neighboring countries, even these major Japanese fishery companies have had no choice but to pull out from deep-sea fishing in succession.
   In recent times, the major strides of newer companies such as Nichirei Corporation, Toyo Suisan Kaisha, Ltd. and Katokichi Co., Ltd., which were able to ride high on developments in refrigeration, freezing and vacuum storage technology, as well as the revolution in fisheries distribution brought about by the use of container freight, have been very noticeable. These companies are flourishing in the business of the storage of frozen and refrigerated seafood. Now that the five major fisheries companies have pulled out of fish catching, they are seeking to find a path of survival by becoming a general food trading company that utilizes food processing and freezing techniques.
   It has been found that in addition to being food that is high in protein and low in calories, seafood also contains excellent nutrients such as DHA, EPA and chitosan. If it is possible to use biotechnology to successfully develop products that not only take the benefits of these aquatic resources into account but also match it to the health-consciousness trend seen among consumers, it may become possible for the fisheries industry to come out of its position as a declining industry and regain its position as a major growth industry.

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