Last summer, Toichi Ubukata stood aghast before vast fields of leeks in the village of Shalingzhen in Shandong Peninsula, about 500 km southeast of Beijing.
The Chinese village is located on the same latitude as his hometown of Fukaya, Saitama Prefecture — Japan’s major growing area for leeks. It has developed a mass-production zone for leeks that stretches 670 hectares toward the horizon.
“The most surprising thing was that the entire area is concentrated on growing leeks to be exported exclusively to Japan,” Ubukata said.
The Japan Agriculture Cooperatives councilor was recalling the JA Fukaya branch’s trip to China that he led in August to observe local production, distribution and export of agricultural produce.
About eight months before the Japanese government decided Tuesday to slap import curbs on leeks and two other agricultural products starting Monday, domestic market prices of leeks in particular were declining due to a surge in imports from China.
Tokyo says the action is to protect domestic farmers and claims the safeguard is strictly legitimate under the World Trade Organization. But critics say the action is selfish because it is Japanese businesses that helped to promote cheap Chinese imports in the first place.
The import curb is expected to hurt Chinese farmers as well as Japanese consumers. Even some Japanese farmers believe the stopgap measure will not protect their livelihood for long.
Chinese laborers working for rock-bottom wages make their products competitive enough to sell at half the price of Japan’s homegrown products. In addition, Ubukata said, the quality of Chinese imports has improved rapidly in recent years thanks to investment by Japanese traders in the “breed-to-import” scheme.
Under the mechanism, Japanese traders take seedlings, necessary materials and technical experts to China, where production costs are far cheaper than at home. Then they import produce to sell in Japan at a profit.
Initiated by Japanese trading firms, the breed-to-import system has taken firm root since the mid-1990s. Major factors include the yen’s rapid appreciation against the dollar and a bad harvest at home, which caused a sudden rise in domestic prices, according to Kiyoshi Shiina of Tokyo Chuo Seika, a greengrocer wholesaler.
“Now that Chinese producers take it for granted that Japanese customers buy their products and that Japanese consumers also benefit from cheap imports, the Japanese government’s move to use safeguards seems a bit rough,” if it’s meant to protect domestic farmers, Shiina said.
Naoki Tanaka, a commentator on economic and political issues, said that what is at issue is a problem Japan created on its own.
Tanaka criticized the government for neglecting to recognize that China never forced agricultural produce upon Japan in the first place and that it was the Japanese who planted the seeds of trouble.
But also in the background is Beijing’s ongoing reform of its agricultural sector in line with its open economy policy as accession to the World Trade Organization nears, said Noriyoshi Ehara, a China expert at the Japan External Trade Organization, an affiliate of the Ministry of Economy, Trade and Industry.
“Chinese farmers have been encouraged to change crops to grow higher-priced vegetables as a means to boost China’s foreign currency reserves and narrow a widening gap with urban industrial workers,” Ehara said.
“Therefore, we cannot necessarily say one party is the assailant and the other the victim here.”
Meanwhile, Chinese farmers must have been shocked at the unprecedented import curb by Japan, which has prospered from free trade, said Chinese economist Ruan Wei, an assistant manager at Norinchukin Research Institute Co.
The think tank is linked to a nationwide bank that caters to agriculture, forestry and fisheries unions.
Ruan said Japan’s safeguard measures may drive some Chinese farmers to bankruptcy despite an abundant crop.
“They won’t be able to pay for expensive seedlings and other materials they had purchased for growing export-only products,” Ruan warned.
At present, the amount of China’s export of fresh produce accounts for less than 1 percent of the volume of vegetables grown there. But the quantity will continue to rise, Ruan said.
Through China’s prospective entry into the WTO, some of an estimated 150 million excess farmers are also expected to turn to highly value-added vegetable production, which requires intensive labor, from crop production, which does not, she said. This is because the WTO free-trade rules will allow in cheap crop imports from the United States, Canada and Australia, which have the advantage of broader per capita acreage and mechanized farming, she explained.
Should that lead to a massive influx of vegetable imports to Japan, Japanese farmers won’t be able to compete head-on with Chinese producers, warned Hiroshi Sakata, a director of Sakata Seed Corp., a Yokohama-based seed firm.
“The current problem is only the beginning,” JA’s Ubukata said. “There are more to come, with other vegetables, from broccoli to cabbages, being produced there aimed at the Japanese market.”
In Fukaya, farmers are trying to enhance the quality of their leeks by scrutinizing residual agricultural chemicals and vowing information disclosure to consumers. They are also seeking better access to consumers through direct shipments.
But more fundamental problems remain. “It all comes down to the structural problem of Japanese agriculture, which is faced with the problems of aging (farmers), a lack of successors and deteriorating productivity,” Ubukata said.
“It’s time for the nation as a whole to see the matter of sustainable food supply in the longer perspective.”
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