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Japan’s food self-sufficiency to 40%; Marubeni to source soybeans and corn directly from the US

August 5, 2008
By Ken Worsley


In last night’s post on Prime Minister Yasuo Fukuda’s new cabinet, Japan’s food self-sufficiency rates merited a brief mention at the end:

[N]ew agriculture minister Seiichi Ota also spoke to reporters on Monday, saying that Japan needs to achieve a level of food security. Can Ota put policies in place to help Japan boost its current 39% self-sufficiency rate on a calorie basis.

This morning, Kyodo reported that Japan’s food self-sufficiency rate had risen one percentage point to 40% in fiscal 2007. This was the first rise seen in 13 years. Former Agriculture, Forestry and Fisheries Minister Masatoshi Wakabayashi had set a goal of reaching 50% food self-sufficiency by 2015. New Agriculture, Forestry and Fisheries Minister Seiichi Ota told reporters, “We will make efforts both on the production and consumption sides to ensure this trend.”

Much of the rise in 2007 can be attributed to two factors. First, rising pasta and bread prices have pushed Japanese consumers into buying more (domestic) rice, the price of which is being artificially propped up by large government purchases. Second, scandals over Chinese made food products, and the gyoza incident in particular, have led Japanese consumers to seek domestically produced foods in the belief that they can be trusted. Or, to put it another way: scandals over Chinese made food products have generated a marketing windfall for domestic producers, who know the lowest common denominator is fear.

Either way, somewhat of a swing towards domestically produced food is happening. Convenience store operator Seven Eleven claimed in March that 93% of the vegetables in its bentos are domestically-sourced. Then, Seven & i Holdings, the parent company of Seven Eleven, announced its intentions to move into the farming business in order to secure domestically grown food without the trouble of having to deal with wholesellers and middle-men.

This morning, the Nikkei reported that trading company Marubeni has purchased storage facilities in North Dakota and Minnesota for a sum of about $50 million. This will allow the firm to buy soybeans and corn directly from US farmers, without having to go through firms such as Cargill or Archer Daniels Midland. Although this move will not lead directly to higher self-sufficiency rates, there is no way Japan could produce the 18 million tons of corn it imports annually from the US. Will Marubeni’s move allow it to acquire the volume of non-genetically modified soybeans and corn it needs for the Japanese market in order to protect against future price shocks in food commodities?

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Comments

6 Responses to “Japan’s food self-sufficiency to 40%; Marubeni to source soybeans and corn directly from the US”

  1. yapp on August 6th, 2008 10:34 am

    How much of that extra 1% was achieved through false labeling of imported products?

  2. Meking on August 6th, 2008 9:48 pm

    After all that media attention, only a 1% rise? That’s really bad for the marketers. Once this trend dies off , unless another scandal can “thankfully” come along, the rate is only going to fall again.

  3. Ken Worsley on August 6th, 2008 11:13 pm

    Do you really see this as a “trend”? Of course there’s money to be made out of fear, but the government has been “making efforts” to increase the self-sufficiency rate. I still think in the current environment, we’re going to see shoppers choosing on price, and some imports will be cheaper - after all, the gyoza production was just outsourced by a Japanese firm.

  4. DaColl on August 18th, 2008 10:53 am

    How much of this meager 1% was just playing with numbers? This number is based on the government’s own suggested “daily caloric intake” . Remember the previous “food self-sufficiency percentage” increase was announced at a time when imports of food were actually rising!

    Previous reported percentage increases were gained simply by reducing the “required daily calories” to some magic number below 2,000Kcal. What is the new number? Can people really subsist on 1,500Kcal (or even less?).

    Non government analysts say a more accurate number may be as low as 20-30%

  5. Ken Worsley on August 18th, 2008 4:54 pm

    DaColl, I think 40% seems a bit high as well. Do you have any links to other analysts that have written on it?

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