Japan to grow more wheat to cut imports

Date:09-03-2009

Japan plans to cut food imports that make up more than half its total supply, helping local farmers at the expense of growers in the U.S., under a 1 trillion yen ($10.8 billion) policy by the nation’s new government.

The country, which sources about 60 percent of its wheat shipments and 74 percent of its soybean imports from the U.S., may boost its food self-sufficiency rate to 50 percent by 2019 under the plan, according to Nobutaka Tsutui, a Democratic Party of Japan lawmaker in charge of agriculture policy. That would compare to a 41 percent rate in the year ended March 31.

The DPJ will take power for the first time after winning election with promises including paying farmers when prices drop below production costs and achieving self- sufficiency in "important grains.” Japan depended on imports for 59 percent of its food in the year ended March 31, the highest rate among developed countries, according to the Ministry of Agriculture, Forestry and Fisheries.

A DPJ-led government will try to revive agriculture in Japan by supporting every farm with cash payments. The policy will help boost domestic production, although the self-sufficiency target is hard to achieve immediately.

Japan, self-sufficient in rice, wants to reduce dependency on overseas grain supplies to protect against volatile global prices that soared to records last year and to ensure long-term food security. The 1 trillion-yen-a-year allocation, equivalent to 40 percent of this fiscal year’s agriculture budget, would start from April 2011.

The DPJ plans to promote rice production as an alternative to foreign wheat in flour milling, replacing 5 million tons of annual imports with domestic output.

"It’s not a realistic idea,” said Charlie Utsunomiya, director at the Tokyo office of U.S. Wheat Associates. “Japanese farmers cannot produce crops that satisfy needs from local flour millers in terms of quality and quantity.”

Japan should ensure supply security by maintaining relationships with traditional trading partners because the country’s weather and soil were unsuitable for high-quality wheat production, Utsunomiya said.

Japan imported 4.86 million tons of milling wheat in the year ended March 31, 2009, according to the agriculture ministry, including 2.94 million tons from the U.S. Canada was the second- largest supplier with 1.12 million tons and Australia third with 799,000 tons. Overseas purchases and domestic sales are controlled by the ministry.