Terrie's Take 825 -- Japan's Agricultural Future is in Fruit, e-biz news from Japan

Mon Oct 26 09:42:05 JST 2015

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term 
technology and media entrepreneur living in Japan. 
(http://www.terrielloyd.com)

General Edition Sunday, October 25, 2015, Issue No. 825

- What's New -- Japan's Agricultural Future is in Fruit
- News -- Shibuya leads way in same-sex relationship recognition
- Upcoming Events
- Corrections/Feedback -- Terminal 3 at Narita really is terrible
- Travel Picks -- Sumo in Nagano, Rokusho Shrine in Setagaya
- News Credits

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+++ WHAT'S NEW

With the basic agreement on the terms and conditions of the TransPacific 
Partnership (TPP) trade bloc now set, the various heads of the 
governments involved are busy persuading their respective constituencies 
to pass the local legislative changes needed to make the pact happen. In 
Japan, the Abe government has lost no time in creating various task 
forces and panels and announcing initiatives that they plan to push 
through. One of the most controversial parts of TPP is agriculture and 
Abe has his work cut out, given that there are about 2.5m farmers and 
another 3m hangers-on (JA staff, wholesalers, distributors, and local 
bureaucrats) who are an important voting power in Japan's unequal 
urban-vs-rural electoral arrangements.

We have been wondering what the LDP will do about Japan's 1.15m rice 
farmers in particular, who are already scarfing up large amounts of 
subsidies while they leave their fields fallow and work part-time as 
taxi drivers. Their representatives are of course howling for even more 
compensation, but with such a huge deficit facing the nation, the 
government seems to be wizing up a bit. We especially liked a recent 
announcement that they would strengthen financial support for farms that 
export high-grade veges and fruit abroad, while pushing those rice 
farmers to provide their grain as feed for livestock instead of humans. 
This is much smarter than simply giving handouts -- since those farmers 
who really want to stay in business will actually have to focus on and 
work at doing so. We imagine that a lot of part-timers will choose to 
continue taxi driving as the more attractive option.

TPP will of course have a strong impact on Japan's agricultural sector, 
but it might not be all negative. We think that the nation's high-end 
fruit and vegetable sector may do very well from the agreement, as it 
will push them to improve production methods to compete on a world-class 
level. Note that we do NOT think that it will necessarily push growers 
to reduce prices -- in fact, just the opposite. Japan has always stood 
for high-quality not-so-cheap products, and her fruit production will 
likely follow the same path.

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[...Article continues]

This won't necessarily mean JPY10,000 melons in Hong Kong, but it 
certainly will mean JPY200 apples and nashi pears (and many other fruits 
and veges besides). We just came back from a recent business trip to 
Shanghai and were surprised to find that prices in city supermarkets 
there were very similar to here in Japan. Just the difference is that in 
Japan you can actually trust what you are buying.

Exports of Japanese fresh fruit and veges are going very well. Fruit 
shipments last year rose 73% to JPY7.2bn over the previous year. Much of 
this was 14,000 tons of apples and 315 tons of strawberries. Scallop 
exports also jumped significantly, up 53% to 63,000 tons, with most 
(70%) going to China. Surprisingly, or perhaps not, Japan also exported 
1,256 tons of eggs, up 56% over last year, thanks to Hong Kong consumer 
fears about Chinese and U.S. bird-flu. This all bodes well for Japan's 
goal of national agricultural exports increasing to JPY1trn by 2020.

Apples make a good case study. The world's largest exporter of apples is 
China at 37m tons, and of this it shipped about 865,000 tonnes abroad. 
However, given that domestic consumption is also 37m tons, demand 
exceeds availability domestically. Next in size is the USA with 861,000 
tonnes. After that you have Chile, New Zealand, Canada, and Argentina. 
Given this, what chance does Japan with its 14,000 tonnes have against 
these massive competitors? Well, frankly you only need go to a South 
East Asian supermarket to find out. The storage and storability of the 
Chinese and U.S. product is often of low quality, resulting in dry, soft 
apples that look great on the outside but which are extremely 
disappointing in the eating.

Conversely, given that the Japanese operate an end-to-end logistics 
chain through such vendors as Nippon Express, they have better/cheaper 
cooling, volumes, and frequency -- so product gets to the end markets 
quicker and in much better condition. Bite into a juicy, crisp Japanese 
Fuji apple and you'll soon understand why middle class Asian consumers 
are willing to pay a bit more to get the real deal.

BTW, did you know that about 30% of Japanese apples are ripened using 
two-layer bags wrapped around each apple? And that the average Japanese 
farmer touches their apples 10 or more times (versus 1-2 times at 
harvest time for western cultivators). If this sounds labor-intensive, 
it certainly is. The first contact is when the farmers pluck excess 
blossoms by hand. Then the apples are individually bagged to keep birds 
and insects out, and when fully grown are a creamy white color 
(apparently, we've never seem them at this stage ourselves). The outer 
bag is then removed for the last week or so, and depending on what color 
filter is applied to the inner (remaining) wax bag, you will get red, 
green, or purple apples. Reflective sheets are placed on the ground to 
increase sweetness, and apples are turned 2-3 times to ensure even 
exposure to the sun. All of these steps ensure superior taste and 
storability, and of course that when picked they are in perfect condition.

Unfortunately while this love and attention ensures a great product and 
one that is absolutely safe to eat, the cost of the manpower involved 
has ensured that the number of bagged apples produced in Japan has 
fallen from 70% to the current 30% in just the last 15 years. So 
increased competition from other countries will force farmers to find 
some way to automate while still keeping their proven techniques alive. 
Direct competition using the same methods as western cultivators won't 
provide a competitive product. Instead, the Japanese will have to find a 
way to automate the time-proven growing methods they have used in the 
past -- which sounds like a perfect opportunity for some enterprising 
farmer's kid in university to develop an apple bagging/turning robot...

...The information janitors/

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***********************************************************

+++ NEWS

- Inflation number falls again
- 2013 social security costs just short of one trillion dollars
- Real-life Pokemon Gym to open in Osaka
- Post Office IPO could kick off renewed interest in stocks
- Shibuya leads way in same-sex relationship recognition

=> Inflation number falls again

The nation's consumer price index (CPI) figures due out next week are 
expected to show a fall in prices of about 0.2%, the second month of 
decline, and as result some economists are forecasting that Japan is now 
in a mild recession. The causes are considered to be weak demand in 
China and elsewhere in Asia putting pressure on Japanese manufacturers. 
***Ed: One problem with the CPI is that it includes fuel but ignores 
food. So while the government is still saying it wants to see inflation, 
the reality is that it's already here. A visit to any supermarket will 
show that most food products have risen 10% or more in the last 12 
months.** (Source: TT commentary from reuters.com, Oct 23, 2015)

http://reut.rs/1Gq4SHk

=> 2013 social security costs just short of one trillion dollars

As the largest item on the government's general account, the 
announcement by the National Institute of Population and Social Security 
Research that social security benefits now cost JPY110.7trn (FY2013), up 
1.5% over FY2012, is truly worrying. This is equal to 30.5% of the GDP 
and the increases show no sign of abating. Right now the per-capita 
level of benefits is a record-high JPY869,300 -- although no one we know 
uses anything like this -- and most of it is spent on medical and 
nursing care costs. ***Ed: Given that Japan's government income from 
taxes is only JPY40trn (approx.), social insurance levies around 
JPY60trn, and investment income around another JPY45trn, this doesn't 
leave much to pay for the cost of borrowing (about JPY23trn a year), 
education, defense, public works, and running the government. Obviously 
this situation can't continue and it's only a matter of time before the 
retirement age increases (to 70?) and the bedridden elderly and their 
families are forced to pay at least 30% of their hospitalization and 
care costs.** (Source: TT commentary from japantimes.co.jp, Oct 24, 2015)

http://bit.ly/1Md0veK

=> Real-life Pokemon Gym to open in Osaka

Not that we are Pokemon aficionados, but we do know a whole generation 
of young readers who grew up watching characters using Pokemon gyms. Now 
for the first time there's a real-life gym opening next month in Osaka. 
Early reviews say that the real thing is a bit lame and too focused on 
kids, but nonetheless the idea is something that might catch on. The new 
facility offers a number of attractions that let visitors play with 
virtual Pokemon as well as counsel some unhappy creatures. Kids under 16 
have to be accompanied by an adult after 19:00, and there is a height 
restriction on the youngest visitors. ***Ed: Games apparently run about 
JPY500-JPY800 per session. Lots of AR hotspots to meet a virtual 
Pikachu.** (Source: TT commentary from techtimes.com, Oct 24, 2015)

http://bit.ly/1O0Qvfa

=> Post Office IPO could kick off renewed interest in stocks

The biggest winner from the upcoming Japan Post stock listing will be PM 
Abe, as the heavily oversubscribed offering seems to be stimulating the 
appetite of the public to buy stocks again. Right now only 11% of 
household wealth is in shares, indicating that the government still has 
its work cut out to make people less risk averse. ***Ed: As a indication 
of the scarcity of stock holders, households had about JPY1,717trn in 
assets, of which JPY893trn was in cash and bank deposits, and only 
JPY182trn was in stocks.** (Source: TT commentary from bloomberg.com, 
Oct 22, 2015)

http://bloom.bg/1Md0xTW

=> Shibuya leads way in same-sex relationship recognition

When it comes to gay lifestyles, most people would think of 
Nishi-Shinjuku. However, this may change significantly following an 
announcement from Shibuya Ward's very forward-looking Mayor, Ken Hasebe, 
that the Shibuya Ward Office will start issuing marriage-equivalent 
certificates to same-sex couples, making it the first municipality in 
Japan to do so. The new certificates are hugely important in giving 
rights to partners in such matters as hospital access and housing. 
***Ed: Also interesting is how Hasebe plans to get private property 
firms and hospitals to stop discrimination against same-sex couples: he 
plans to publish their (the companies') names publicly.** (Source: TT 
commentary from mainichi.jp Oct 24, 2015)

http://bit.ly/1k2BdJK

NOTE: Broken links
Some online news sources remove their articles after just a few days of 
posting them, thus breaking our links -- we apologize for the inconvenience.

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+++ UPCOMING EVENTS/ANNOUNCEMENTS

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-----------------------------------------------------------

+++ CORRECTIONS/FEEDBACK

=> In Terrie's Take 808 (June 2015), we complained bitterly about the 
poor design and accessibility of Narita's new LCC facility -- Terminal 
3. A reader compares notes.

*** Reader Says:

I remember your Terrie's Take about Terminal 3 at Narita, where you 
labelled it as the worse in Asia. My wife is originally from Yokohama 
and has lived in Melbourne for nearly 30 years, so we travel to Japan 
once a year on average. In May 2014 we took Jetstar's then-new non-stop 
MEL->NRT->MEL flights and had no complaints. Everything ran on time, we 
landed at terminal 2 on arrival at Narita, and all was good.

So we traveled Jetstar again recently and experienced Terminal 3 for the 
first time after they changed terminals in April this year. I can't 
agree with you more about what a crap terminal this is -- especially to 
operate international flights out of. If it was just domestic flights I 
think it would almost be acceptable, but international no way.

We disliked it so much that we probably won't use Jetstar again, even 
though at this stage they are the only airline that flies non-stop from 
Melbourne. Instead, we would be willing to go Qantas via Sydney at 
additional cost, just so we can land at Terminal 2. As a "mature couple" 
we're probably not Jetstar's target demographic, so maybe our views are 
not typical and they probably don't care about losing a few customers 
like us. But I just wanted to email and say how much I agreed with your 
views -- and, well, you never know, maybe someone at Jetstar might be 
reading this.

***------------------------****-------------------------***

+++ TRAVEL DESTINATIONS PICKS

=> Sumo road shows in Nagano

One of the best ways to see your favorite sumoyoshi up close is to catch 
them at one of the sumo road-shows held each year. The locations change 
annually, and this year's appearances included Matsumoto City on October 
14th and Nagano City on October 16th. 8 years have passed since the last 
road-show in Matsumoto and 3 years since the last one in Nagano.

Although super-strong Mongolian yokozuna (grand champion) Hakuho still 
reigns after 8 years, he was injured so could not attend this time. 
However, two other yokozunas and other major wrestlers did make an 
appearance. Probably the home crowd were most excited about the arrival 
of a new hero in the sport, who hails from Kiso in Nagano Prefecture. 
His name is Mitake-umi, named after the volcano Ontake, which erupted 
last year and caused many deaths. At the time of the eruption he was a 
college student and the strongest amateur wrestler. However, he chose to 
become a professional sumo wrestler so that he could serve as an 
inspiration for the people of Kiso.

http://bit.ly/1OZLDWk

=> Rokusho Shrine in Setagaya
A small but beautiful shrine near Sengawa Station

Rokusho Jinja is a small but very beautiful shrine close to Sengawa 
Station. The main building is framed with two guardian dogs, while the 
smaller building on the left side has two guardian foxes. All of the 
stone statues are partly covered with moss and add a nice green 
highlight to your pictures. On a weekend or public holiday your visit 
might be a bit more quiet since Rokusho Jinja is in between two schools.

http://bit.ly/1N0R0Eo

***------------------------****-------------------------***

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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