Japan has long been on the defensive over agricultural trade as it sought to protect the nation’s farmers, but it may soon go on the offensive.
The semi-governmental Japan External Trade Organization in July formed a panel of experts tasked with drawing up a comprehensive strategy for selling Japanese farm products abroad, especially in Southeast Asia.
“Until recently, the general understanding had been that Japanese products are too expensive for other Asian markets,” said Kazuo Haraguchi, director general of JETRO’s agriculture department. “But the region’s economies have seen dynamic growth in recent years, and per capita income is on the rise. Considering the keen interest in Japanese food overseas, we figured there might be greater potential for more exports.”
Statistics support this notion.
Last year, the United States was the biggest buyer of Japanese agricultural, fishery and forestry products, importing 71 billion yen worth. But the second to seventh biggest importers were all in Asia, buying a combined 208 billion yen.
So the 14-member committee, consisting of scholars, industry representatives and traders, will focus on six target markets — Hong Kong, Taiwan, South Korea, China, Thailand and Singapore.
The committee will study local regulations in such areas as tariffs, trademarks and food safety. It will also send delegates to get a better grasp of prices and packaging styles.
Based on the results, JETRO plans to organize trade fairs and sample-tasting sessions across the region beginning next year.
While the two-year sales drive covers a wide variety of items, ranging from rice and vegetables to meat and timber, domestic producers stand the best chance of beating rivals with fruit, including apples and pears, Haraguchi said.
Last year, Aomori Prefecture, a traditional stronghold of apples that accounts for half of the nation’s total yield, saw its apple exports to Taiwan jump more than five-fold to 11,000 tons from the year before.
Behind the surge was Taiwan’s entry last year into the World Trade Organization, which reduced tariffs on apples from 50 percent to 20 percent.
While the U.S. accounts for more than two-thirds of Taiwan’s 150,000-ton apple import market, with annual shipments of 100,000 tons to 130,000 tons, Japan boasts exclusive technology to produce large fruit.
The top-of-the-line apples, which weigh up to 500 grams apiece — twice as big as standard ones — are popular gift items with Taiwanese, who offer them to Buddhist altars during Chinese New Year, said Mamoru Fukasawa, deputy counselor at the prefectural apple and fruit division.
“These apples sell for 700 yen to 800 yen apiece,” he said. “The top-quality stuff you hardly ever see in a Tokyo department store occupies the shelves over there.”
But there is no room for complacency among Japanese producers.
Currently, Taiwan and China have no official links, including commerce, so there are no direct apple shipments from China. Yet mainland China is the biggest apple producer in the world, with annual production of 20 million tons, dwarfing Japan’s annual output of 1 million tons.
“I believe the restrictions on (China-Taiwan) trade flow will eventually be eliminated,” Fukasawa said. “We want to expand our foothold in Taiwan by then.”
But as Japan goes out on an aggressive sales campaign globally, it could face even bigger calls from abroad to open up its own agricultural markets.
The Central Union of Agricultural Cooperatives (Zenchu), which staunchly opposes farm trade liberalization in the ongoing WTO negotiations, is pushing the concept of local consumption of local food as an ecologically friendly lifestyle.
So isn’t the farm lobby living by a double standard by promoting exports of Japanese rice through the JETRO panel?
“There is no way the Japanese farm industry can be powerful enough to beat other nations’ agricultural sectors completely,” a Zenchu spokeswoman said, defending the group’s participation in the committee. “Our intention is to give (consumers) more options to choose from.”
Given the huge price gaps between the locally produced products and imported ones, it is a formidable task. According to Zenchu, retail prices of Japanese rice sold overseas are around 250 percent to 600 percent higher than locally grown rice.
But Japanese producers seem to have few other options besides looking outward, as the domestic market will continue to shrink with the aging population.
What will be the key to successful marketing abroad?
Education, proclaimed Katsuhiko Noge, president of trading/export consulting firm Global Communications Co. in Mishima, Shizuoka Prefecture.
While the allure of Japanese food is certainly there, the target markets need to be educated on how to cook the food, said Noge, who has organized numerous food fairs and exhibits globally while he headed international operations at the now-defunct Yaohan supermarket chain for 20 years until 1997.
He recalled a demonstration he once gave in Hong Kong on how to make miso soup.
A local woman came up with a 500-gram package, asking him if it was for one person. He told her it contains 50 servings, and showed her the ropes, adding ingredients such as “fu” wheat gluten and “abura-age” deep-fried tofu.
“To promote Japanese food products abroad, you have to educate people on how to cook. You have to give them recipes and cooking demonstrations,” he said. “Some Japanese makers (are trying to sell only with) Japanese-language labels on the products.”
Despite mounting challenges, efforts to woo overseas consumers would give small and midsize agricultural producers in rural areas a great opportunity to test their salesmanship and survive the already fierce competition within Japan, Noge said.
“One’s best defense is a good offense,” he said. “Hong Kong, for example, is such a globalized market that it is ideal to test new products. Going to Hong Kong would put Japanese producers right into world-class competition, which would also make them emerge stronger in Japan.”
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