On Japanese farms, weaker yen adds to slow discontent

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YAMAGATA, Japan, June 27 (Reuters) – Japanese farmer Kiyoharu Hirao has started adding more rice to the mix he feeds his cattle to maximize his cash as a falling yen drives up the cost of maize imported used in animal feed.

This makes him worried about the quality of his prized wagyu beef and, along with other farmers facing similar difficulties across the country, angry at the ruling Liberal Democratic Party (LDP) which once held an almost unshakeable hold on the Rural Japan.

“I don’t know how many more people can take, myself included, because the price of animal feed and other products keeps going up,” Hirao, 73, told Reuters at his farm in Las Vegas. outskirts of Yamagata City, strains of classical music rising from the speakers inside his barn. For years he used music to calm cows and ensure tender beef. Now he fears that the rice will harm their gut bacteria.

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The fall of the yen to its lowest level in more than two decades this year has hit Japanese farmers hard, making the already high cost of imported food, fuel and fertilizer even harder to afford. Some, like Hirao, are cutting costs or taking out loans. Some talk about abandoning agriculture altogether.

The situation has added to quiet discontent in Hirao prefecture of Yamagata, a mainly agricultural region known for its rice, beef and cherries about 400 km (250 miles) north of Tokyo.

Reuters spoke to two dozen farmers, officials and policy experts across Japan, including a dozen farmers in Yamagata, at least 10 of whom described discontent there or in other areas agricultural, exposing cracks in the rural base of the PLD.

Polls show Prime Minister Fumio Kishida set to lead the LDP to victory in an upper house election on July 10, but the combined effects of inflation and a weak yen could cost him critical rural votes and weaken his grip on the split party.

Once a strong supporter of the LDP, Hirao said he began to walk away from the party because he felt it was not doing enough for farmers. Its opposition hardened under former Prime Minister Shinzo Abe, who pushed for free trade and triggered monetary stimulus in a bid to end deflation and raise wages. In the next elections, he said he was leaning more towards the incumbent, who is from the opposition.

Prices are rising now, but wages still haven’t budged in decades. Japan’s central bank, headed by a person named Abe, has stuck to extremely low interest rates, even though rising rates tend to increase the value of a country’s currency.

“It’s just low interest rates and lower interest rates and somehow we get through it, but eventually the younger generations get stuck with the burden,” Hirao said. . “I hate everyone Abe has named. None of them are good.”

About 1.3 million people, or less than 2% of the working population, work mainly in agriculture in Japan. Yet farmers are a powerful political force because the electoral system disproportionately favors rural voters and because agricultural cooperatives, collectively known as the JA Group, form a powerful lobby.

Some farmers in Yamagata told Reuters they felt betrayed by the LDP because it favored free trade over farmers over the past decade, cutting support measures and further opening the Japanese market to competition. foreign. They want to return to the days of strong government support and a more protectionist stance, which was a mainstay of LDP policy for decades but has now been partially dismantled.

To win back those disgruntled rural voters, the LDP will be forced to provide more to farmers, said Kazuhito Yamashita, a former agriculture ministry bureaucrat and now research director at the Canon Institute for Global Studies think tank.

“As the prices of fertilizers, pesticides and fuel rise, farmers will earn less and become increasingly dissatisfied. Their support for the LDP will gradually weaken,” he said. “The LDP doesn’t want to make an enemy of the farm lobby, so in terms of elections they will have no choice but to support the policies the farm lobby wants.”

In response to questions from Reuters, an LDP spokesman did not directly address the issue of the party’s support among farmers. The spokesperson said the LDP was working to ensure all citizens understood its policies, not just those involved in agriculture, and referred Reuters to its election manifesto, which includes a pledge to mitigate the impact of rising fuel, feed and fertilizer prices, without providing further information. details.

“The spike in energy and commodity prices is worrying,” Toshiaki Endo, chairman of the LDP’s election strategy committee and Yamagata lower house representative, told party supporters in April. “We are in an extremely difficult fight.”

Public support for Kishida recently fell to a four-month low of 48.7% and more than 54% disapprove of his handling of inflation, a Jiji Press poll showed this month.

‘THE GREATEST RESPONSIBILITY’

Abe’s endorsement of a landmark trans-Pacific trade deal in 2013, which Japan formally signed five years later, hurt support for the LDP in the rice-growing north, farmers and analysts said. Yamagata is one of the few prefectures that does not have LDP lawmakers in the upper house, although its three lower house representatives are all from the party.

“Farmers and agricultural groups have traditionally been strong supporters of the ruling party. But over the past 10 years there are more people who think it is not good to rely solely on the LDP” , said Toshihiro Ooyama, a 12th generation farmer who leads the agricultural sector. Yamagata City Cooperative.

The cooperatives lobby on behalf of their members and invest farmers’ savings through Norinchukin Bank, which has $756 billion in assets and is a major player in global financial markets.

JA Group declined to comment on farmers’ support for the LDP. He said rising fuel, raw material and feed costs were causing “growing concern” among agricultural producers. He referred Reuters to a seven-page policy proposal published last month, which called for measures to ease pressure on farmers, including government support to increase domestic production of crops used for animal feed.

Japan has reduced its support to agriculture in recent decades, but even so, 41% of farmers’ income still comes from government subsidies, more than double the average for the group of wealthy OECD countries. Japanese farmers charged 60% above international market levels for their produce between 2018 and 2020, according to the OECD.

Some economists say an aging Japan can no longer afford massive support for farmers. Yet without this support, the LDP could lose its grip on a key group of voters.

“The LDP is just going to hit a wall” in Yamagata if it doesn’t help farmers more, said Kazuharu Igarashi, 57.

In his pig barn in Tsuruoka, near the Sea of ​​Japan, he too adds rice to the animal feed and worries that his pork is no longer dry. So far, he said customers haven’t noticed. About 80% of his monthly income of 10 million yen ($75,000) is now spent on animal feed, above his break-even point of about 60%. He said he took out a loan from a prefectural emergency fund, but fears other farmers will not survive financially.

Like Hirao, he said he was leaning towards incumbent Yasue Funayama of the centrist People’s Democratic Party in the upcoming elections. A former civil servant at the Ministry of Agriculture, she is in favor of a European-style guaranteed minimum income for rice farmers.

“The government says rice is central to our culture and the staple food of the people, but production has been liberalized,” Funayama told Reuters in an interview at his office in Tokyo. “The government has abandoned its greatest responsibility.”

Given Funayama’s popularity, the LDP considered not fielding a candidate against her, a person familiar with the party’s thinking told Reuters. He named just one with about six weeks until the July 10 vote. The LDP declined to say whether it had considered not fielding a candidate for Yamagata in the upcoming elections.

Certainly, there are many issues that can affect how farmers vote, especially since 70% of them are 65 or older.

“There is such variation among the farming population,” said Kay Shimizu, assistant research professor of political science at the University of Pittsburgh, who co-authored a book on Japanese agriculture and JA cooperatives.

“On the one hand, they have an interest in their welfare, in their livelihood, which is agriculture, but they also have other interests. Many of them are much older, they have social concerns.”

Kazuyuki Oshino, a rice farmer from central Yamagata, said he was asked by three different farmers to take over management of their rice fields due to rising costs.

“If conditions continue as they are, things will be difficult,” he said. “So they quit.”

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Reporting by Daniel Leussink in Yamagata Additional reporting by Sakura Murakami and Yoshifumi Takemoto in Tokyo Editing by David Dolan and Bill Rigby

Our standards: The Thomson Reuters Trust Principles.

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