Terrie's Take 825 -- Japan's Agricultural Future is in Fruit, e-biz news from Japan
terrie at mailman.japaninc.com
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.
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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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...
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- 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)
=> 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)
=> 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)
=> 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)
=> 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)
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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Details: Complete event details at http://www.icajapan.jp/
=> 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
+++ 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.
=> 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.
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+++ ABOUT US
Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)
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