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Sunday, November 27, 2022

In Japan’s farms, a weak yen adds to slow-burn discontent

Japanese farmer Kiyoharu Hirao has begun adding more rice to the mix he gives to his cattle to raise his money as the yen falls as the cost of imported corn used for animal feed increases.

The cap makes him concerned about the quality of his prized Wagyu beef and, along with some other farmers facing similar hardship across the country, is angered by the ruling Liberal Democratic Party (LDP), which has once almost ruled rural Japan. Was held firm.

“I don’t know how much more people can take, including me, because the price of feed and other products keeps going up,” Hirao, 73, told Reuters at his farm on the outskirts of Yamagata city. Classical music rising from the speakers inside his barn. Over the years they have used music to calm the cows and ensure tender beef. Now they fear that the rice will harm their gut bacteria.

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Japan’s farmers have been hit hard by the yen’s fall to a more than two-decade low this year, making it even more difficult to afford the already high costs of imported feed, fuel and fertilizer. Some, like Diamond, are cutting costs or taking out loans. Some people are talking of giving up farming altogether.

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

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

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Polls show Prime Minister Fumio Kishida is expected to lead the LDP to victory in the July 10 upper house election, but the combined effect of inflation and a weakening yen could cost him crucial rural votes and His hold on the corrupt party may be weakened.

Hirao, once a staunch LDP supporter, said he started shunning the party as he felt it was not enough for the farmers. Their opposition hardened under former Prime Minister Shinzo Abe, who advocated free trade and monetary incentives in an effort to end deflation and boost wages. In the coming elections, he said that he is leaning more towards the incumbent candidate, who is from the opposition.

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Rice farmer Kazuyuki Oshino talks with his son-in-law in a rice field in Tend, Yamagata Prefecture, northern Japan, May 12, 2022. The picture was taken on May 12, 2022. Reuters/Daniel Lusink

Prices are rising now but wages still haven’t risen in decades. Japan’s central bank, run by an Abe-appointed man, sticks to ultra-low interest rates, even though raising rates increases the value of a country’s currency.

“It’s just low interest rates and more low interest rates and somehow we get it, but eventually the younger generation gets caught up in the burden,” Hirao said. “I hate all the people Abe has appointed. None of them are good.”

About 1.3 million people, less than 2% of the labor force, work mainly in agriculture in Japan. Yet farmers are a powerful political force because the electoral system 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 chose free trade over farmers in the past decade, rolled back support measures and opened the Japanese market more to foreign competition. They want to return to the days of stronger government support and a more protectionist stance, which was a pillar of LDP policy for decades, but has now been partially dismantled.

To win back such disaffected rural voters, the LDP will be forced to give more for farmers, said Kazuhito Yamashita, a former bureaucrat in the Ministry of Agriculture and now research director at the Canon Institute for Global Studies think tank.

“With the rise in the prices of fertilizers, pesticides and fuel, farmers will earn less and become increasingly dissatisfied. Their support for the LDP will gradually weaken,” he said. “LDP does not want to make the farmers lobby an enemy, so in case of elections, they will have no option but to support the policies that the farmers lobby wants.”

Responding to questions from Reuters, an LDP spokesperson did not directly address the issue of the party’s support among farmers. The spokesperson said the LDP is striving to ensure that all citizens understand its policies, not just those involved in agriculture, and referred to Reuters in its election manifesto, which calls for higher fuel, fodder and fertilizer prices. Includes resolution to reduce the impact of description.

“The rise in energy and commodity prices is a concern,” Toshiaki Ando, ​​chairman of the LDP’s election strategy committee and representative of Yamagata’s lower house, told party supporters in April. “We are in for an extremely tough fight.”

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

‘Greatest responsibility’

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

“Farmers and agricultural groups were traditionally strong supporters of the ruling party. But over the past 10 years, there have been more people who think it’s not good to rely only on the LDP,” said 12th-generation farmer Toshihiro Oyama, who Head of Agriculture Department. Cooperative in Yamagata City.

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

JA Group declined to comment on farmers’ support for the LDP. It said rising costs of fuel, raw materials and animal feed are causing “widespread concern” among agricultural producers. It cited a seven-page policy proposal issued to Reuters last month that called for measures to ease pressure on farmers, including government support to expand domestic production of crops used for fodder. was.

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

Some economists say that aging Japan can no longer afford to give big support to farmers. Yet without that support, the LDP could lose its grip on a major set of voters.

“The LDP will just hit a wall,” said Kazuharu Igarashi, 57, in Yamagata if it didn’t provide more help to the farmers.

At his hog shed in Suruoka, near the Sea of ​​Japan, he also puts rice in animal feed and is worried that his pork will dry out. So far, he said customers haven’t noticed. About 80% of its monthly revenue of 10 million yen ($75,000) now goes to animal feed, which is more than its break-even of about 60%. He said he took a loan from a prefectural emergency fund, but was worried that other farmers would not survive financially.

Like Hirao, he said he is leaning towards the incumbent candidate, Yasu Funayama of the centrist Democratic Party for the People, in the coming election. A former bureaucrat in the Ministry of Agriculture, she favors a European-style guaranteed minimum income for rice farmers.

“The government says that rice is at the heart of 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 given up its biggest responsibility.”

Given Funayama’s popularity, the LDP considered not fielding a candidate against him, a person familiar with the party’s thinking told Reuters. It named only one, with about six weeks left before the July 10 vote. The LDP declined to comment on whether it had considered not running a candidate in Yamagata in the upcoming election.

To be sure, there could be many issues affecting the way farmers vote, especially as 70% of them are 65 or older.

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

“On the one hand, there is an interest in their well-being, in their livelihood, which is farming, but they have other interests as well. Many of them are very old, they have social welfare concerns.”

Kazuyuki Oshino, a rice farmer from central Yamagata, said he was asked by three different farmers to manage his paddy because of rising costs.

“If the situation continues like this, then things will become difficult,” he said. “So he left.”

Reuters

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