Monday, April 7, 2008

First Day in Tokyo

Today was my first day in Tokyo and I started the day by meeting with the U.S. Ambassador, Mr. Schieffer. He is from Ft. Worth and it was nice to hear a Texas accent. He told me how important agriculture is in Japan. Japan produces less than 40% of the food that is necessary to feed its population and food security is a very important issue right now. He had just recently given a speech regarding the need for Japan to look to other democratic nations such as the U.S., Canada and Australia as sources of the other 60% of their food. After the recent problems with imported dumplings from China this is at the forefront of a lot of people’s minds. He also will be delivering a speech soon regarding Genetically Modified Organisms. It was interesting to see that the Ambassador was truly interested in agriculture.
My next meeting was with Mr. Ronald Post, Minister-Counselor for Public Affairs at the Embassy. He was familiar with the Eisenhower Fellowships. When he was based in South Korea several years ago he was involved with nominating their Eisenhower Fellow to travel to the U.S. We were joined by Nini Forino, Assistant Cultural Affairs Officer; she works with the Japanese Eisenhower Fellows and is interested in assisting future USA fellows who will visit Japan. I enjoyed visiting with Mr. Post and Ms. Forino.
Our next meeting was with Greg Hanes, Japan Director for the U.S. Meat Export Federation. We discussed the U.S. beef trade situation. This issue has become very political in Japan. It is used by the DJP political opposition party to attack the majority LDP party. When BSE was found in Japan the government overreacted and instituted 100% testing. Now it is hard for them to back away from this extreme position. However, they are scheduled to reduce testing later this year. We also discussed Japanese consumers’ views on traceability. He provided us with passes for the Meat Industry Showcase which we will visit on Thursday or Friday. This is a large national meat industry show with exhibitors from around the world and it should be very interesting.
Next we took a cab to an AEON supermarket. AEON is the largest supermarket chain in Japan. This store was only a couple of years old and quite large. The variety of items that are available is impressive and everything is displayed very attractively. Mr. Hanes had told us that AEON doesn’t carry much U.S. beef compared to the other chains, mainly because they can’t get enough of a continuous supply for all of their stores. Below are three pictures I took at the supermarket. The first is a package of onions from the Tasmanian company that Noko represents; notice the “green eye” label that can be scanned with a cell phone and gives traceability information. These particular labels are unique to the AEON chain. The second picture is domestically produced beef, notice the heavy marbling and roughly $22 price for this small portion. The third picture is domestically produced pork; notice the picture of the farmers that produced it. We will be visiting AEON’s corporate headquarters later during my visit to discuss their traceability system.



We returned to the U.S. Embassy for our final meetings of the day with the USDA Foreign Agriculture Service. We first met with Dan Berman, Minister-Counselor for Agricultural Affairs and Paul Spencer, Senior Agricultural Attaché. They related how hard it is to balance food safety concerns with the ability to do business in Japan. The two hottest issues are beef trade and bio-tech. The media and political parties make it very hard to get the scientific reality heard. Even the scientists quote opinion polls in justifying the policies relating to these issues. The traceability systems are largely driven by retailers not consumers. Food service is less traceability oriented. One interesting fact that I didn’t previously know is Japan uses 7 times the amount of agricultural chemicals per land unit as anywhere else in the world. This is largely because of the humid climate. Japan imported $225 million worth of U.S. beef last year and many restaurants really want U.S. beef. Also, 93% of the corn used in Japan is from the U.S. Japan is estimated to only have a 6 week supply of feed grains on hand. Interestingly, there is starting to be quite a bit of Dried Distillers Grains coming to Japan in containers that would otherwise be empty on their return trip from the U.S. We also discussed the procedures for gaining approval of a bio-tech variety in Japan, which takes up to 3 years and requires a 250 plant test plot in Japan.
Next I talked to Mr. Hisao Fukuda, Agricultural Specialist and Senior Policy Advisor. He has a lot of experience with Japanese Agriculture and has also spent some time in Iowa. We discussed how emotional and ethnocentric the food safety issue has become. He said that unfortunately issues like the poison dumplings from China soon become a domestic verses import issue no matter what country the imports are coming from. Food Security is a major issue right now. The Japanese government is starting a new division to concentrate on Food Security. It was the high government subsidies for rice that caused farmers to stop double cropping rice with either wheat or soybeans thus contributing to the food security problems that they are now facing. All farmers in Japan produce some rice. The average income in rural Japan is higher than in urban areas. The government has a lot of influence over agriculture and food in Japan. For instance, all imported wheat is bought by the state so the price is controlled by the state trading entity and milk prices are set once a year by the government. Agricultural areas are very influential in the government as one vote in a rural area counts more than a vote in Tokyo. I asked about the WTO negotiations and he said that the government is starting to hold town meetings with producers to let them know that there will have to be changes in farm programs. But he also sees Japan continuing to use Sanitary and Phytosanitary regulations and Food Safety to control imports. 60% of Japanese farmers are 65 years of age or older. To become a farmer you have to be approved by a board of farmers. This is a very old process that began for water management reasons. There doesn’t seem to be much recognition of the fact that soon there will be no farmers. I guess we should feel lucky with our 55 year old average farmer and the few young farmers that we have coming into the business. Japan proves that it could be a lot worse.

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