Japan’s high-cost farmers, sheltered by prohibitive import tariffs, might appear to be most at risk from a trans-Pacific free-trade deal agreed to this month, but they are instead making an unlikely push to export more of their pricy produce.
The latest figures show that Japan’s agricultural sector exports only about 5 percent of its output, but Japanese Prime Minister Shinzo Abe sees the Trans-Pacific Partnership (TPP), reached in Atlanta on Oct. 5, as an opportunity, not a threat.
“The domestic market is saturated,” said third-generation fruit farmer Soichi Furuya, who started exporting grapes and peaches to Hong Kong and Taiwan, neither of which are TPP signatories, a decade ago.
He said most of his business is to remain domestic, but Japan’s shrinking population made export markets attractive, and its high-quality produce was capable of cracking them.
“I think the excellence of Japanese fruits still has not been fully recognized in the world,” 42-year-old Furuya said, standing under overhanging vines of sweet red Kaiji grapes in Yamanashi Prefecture, the heart of Japan’s fruit industry.
Furuya’s fruit and vegetables are already recognized by shoppers in Hong Kong, Japan’s biggest overseas market for farm produce. The chief obstacle to cutting prices is not overseas tariffs — Hong Kong imposes none on his fruit — but quarantine issues and delivery costs for his fragile cargo.
“It will be great if transportation technology develops further and infrastructure for exporting improves,” he said.
Industry insiders say transport costs for grapes can add 50 percent or more to the price, and for beef it is about 10 percent. Beef and fruit are among Japan’s main food exports.
Some companies, such as the logistics units of ANA Holdings Inc and Yamato Transport Co, are already trying to address these issues.
Yamato Transport Co global business development division head Katsuhiko Umetsu said better delivery options were key to increasing overseas demand for Japan’s agricultural products.
“What we decided was to offer a service to farm producers so they can export their products in small lots,” he said.
By consolidating small lots from all over Japan to a 24-hour airport in Okinawa, the nation’s farm products can be delivered to neighboring Asian nations the following day.
Abe’s government is aiming to raise the nation’s farm, fishery and forestry exports to ￥1 trillion (US$8.3 billion) by 2020. Last year, they hit a record high of ￥612 billion, up 11 percent from 2013.
The TPP is expected to help. The deal is to more than double the US non-tariff quota on Japanese beef over 14 years and then remove the tariff altogether. And Vietnam is to eliminate its current 11 percent to 15 percent tariff on Japanese fish as soon as the TPP takes effect, which still requires the non-trivial step of ratification.
However, Japanese agriculture is not putting all its eggs in the TPP basket. Farmers and the business sector are looking with particular relish at the enormous promise of China, which is not a member of the TPP, but is looking to establish a similar trade pact in Asia.
“I think there is a need for Japanese products in China,” ANA Cargo director Masaki Tanimura said. “It would be huge if China opens up its market.”
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