Archive for March, 2012

How much money do rice farmers need to make from farming?

Friday, March 30th, 2012

Bags of rice for sale in a JA retail outlet

The Trans-Pacific Partnership trade agreement, which Japan endeavors to join, continues to be controversial, though most people in Japan only have knowledge about the broadest arguments. If Japan joins TPP, it’s the end of Japanese agriculture; if it doesn’t, Japan will not have access to one of the biggest markets in the world.

Several recent articles in the Asahi Shimbun at least give some idea of what rice farmers stand to lose or gain from the agreement. Two farmers are profiled, one in Fukui Prefecture, the other in Aomori prefecture. The Fukui farmer works a one-hectare paddy that he inherited from his father about 15 years ago. The paddy yields about 96 hyo (1 hyo = 60 kg) a year and ¥1.47 million in revenues, which breaks down to ¥1.1 in sales and the rest in government subsidies. When the Democratic Party of Japan became the ruling party, it threw out the old Liberal Democratic Party subsidy system, which basically discouraged farmers from growing rice. The DPJ subsidy, called kobetsu shotoku hosho (individual income compensation), pays them to grow by making up for any losses they might incur due to low market prices.

The Fukui farmer’s annual expenses for cultivating his paddy run to about ¥1.77 million, which includes ¥520,000 for outside labor. It’s implied that the paddy owner himself does very little actual farming. On his tax return he also lists in the loss column ¥600,000 in depreciation for his farm equipment. All in all, the farm in 2010 lost ¥300,000. However, he says it doesn’t really bother him. His main job is working for an electrical parts maker, which pays him a salary of ¥5.3 million. His wife also works, earning ¥2.8 million.

Continue reading about the cost of growing rice →

Auto thefts in Japan record first rise in a decade

Friday, March 23rd, 2012

Sitting pretty: Hiace with steering wheel lock

In 2011, 24,928 cars were stolen in Japan, an increase of 1,153 vehicles compared to 2010. This was the first time the number of thefts had gone up since 2001 when 63,275 cars were stolen. Obviously, things have gotten a lot better since then, owing mainly to the standardization of electronic ignition systems, which make it more difficult for thieves to start a car and drive it away.

The General Insurance Association of Japan reports that the model stolen the most — based on statistics from November — is Toyota’s large van, Hiace, which isn’t to say it was the model most targeted by thieves. Hiace does not have electronic ignition as a standard feature, thus making it relatively easier to hot wire. Its popularity among regular ignition cars, though, is well-known by insurers, who say that Hiaces have three things going for them in terms of resellability: They are very durable, they are easy to find parts for, and they are very popular overseas. They’re the Kalashnikovs of the automotive world.

The GIA doesn’t reveal how much its members shelled out in claims for stolen cars. Collision insurance for one’s own car is optional in Japan, and the customer can decide the level of coverage. The same is true of optional auto theft insurance. Since mandatory liability insurance runs car owners around ¥50,000 a year regardless of how old the car is, many people just don’t buy optional auto insurance.

Continue reading about auto theft in Japan →

Putting the ‘fortune’ back in fortune telling

Sunday, March 18th, 2012

For more than a month the tabloid press has been obsessed with comedian Tomoko Nakajima, who apparently has squandered her career and whatever money it made her on the services of a self-styled fortune teller who effectively commandeered her life. In Japan, fortune tellers, or uranai-shi, do pretty much the same thing that fortune tellers do everywhere else in the world. They use supposedly timeless, spiritual or other non-scientific techniques to predict an individual’s future. Uranai-shi have more of an accepted social position Japan than they do in a lot of other developed countries. A few, in fact, are bona fide stars whose advice is sought by the rich and famous, thus making them rich and famous, too.

You will meet a tall, dark stranger: Fortune teller's sign in Ginza

A recent article in Asahi Shimbun discussed people who, like Nakajima, have become “addicted” to fortune tellers. About 80 percent of the people who patronize uranai-shi are women, the majority in their 30s. One told the newspaper that she first turned to uranai-shi when she needed advice about becoming a freelance writer. A fortune teller told her to get married instead, and she did, but the marriage didn’t work and she divorced.

Despite what turned out to be bad advice she continued seeking counsel from fortune tellers, obsessed with what would happen to her in the future. She paid upward of ¥20,000 per session for two years and eventually amassed a debt of more than ¥3 million. In the end, she kicked her habit by studying the psychology of addiction, and now makes a living counseling fortune telling addicts like herself. Nice work if you can get it. She points out that the act of “regurgitating” emotions to a fortune teller is what makes the process so habit-forming. It’s like a “tranquilizer” to ease the fear of the unknown, but since the fear is never directly dealt with it never goes away, and so the patron has to continue seeking advice.

Money is an integral component of the addiction, since it clarifies the relationship. Traditionally, one finds fortune tellers on the street, sitting in front of little stands, handing out advice in ten-minute blocks of time, and ten minutes is never enough. More successful practitioners work out of offices. But growth in the industry is now in fortune telling over the phone and on the Internet. One entrepreneur told the Asahi that he runs 20 fortune-telling hotlines that charge ¥9,000 for 30 minutes, and candidly admits that his main mission is to listen to people’s problems and “cheer them up.” And though many of his customers are repeat users, he insists that if he or his staff suspect anyone of being an addict, they “reject” them.

Like all consumers, people who use fortune tellers insist on getting their money’s worth. Asahi reported that one site received a lot of complaints, not so much for its exorbitant fee — several thousand yen per minute — but because the advice didn’t work. One has to wonder if the degree of dissatisfaction has a direct correlation to the dearness of the charge, but as fortune telling becomes more of a legitimate commercial enterprise it also becomes more of an issue. The National Consumer Affairs Center of Japan reports that formal claims against fortune tellers have increased over the past decade. In 2001 the center received 871 complaints for the whole year. As of March 2, it’s already received 1,801 since Jan. 1. The complaints are about not fees but rather the product. People demand predictions that work out.

Asahi says that DoCoMo’s goo website survey found that the starting price for fortune tellers is about ¥5,000 for 30 minutes, which is about the same as the consultation fee you’d pay to a psychiatrist or a lawyer. It makes sense. All three specialize in giving advice with no guarantee of results.

Electric cars aren’t just for driving any more

Tuesday, March 13th, 2012

Nissan charged up about giving back to the community.

Late last month, Nissan announced that starting in April its new electric car, the Leaf, would be used as an emergency power supply for a new office-condominium high-rise in Shinjuku managed by Sumitomo Real Estate. In the event of a disaster that resulted in a power failure, Leaf cars could be connected to the building’s electrical system through outlets specially installed for recharging electric vehicles and then the cars’ stored power could be used to supply electricity to the building for up to 42 hours for emergency services such as recharging cell phones and illumination. As a side note, the building also has a special hall that can be converted into a shelter for people in Tokyo who cannot return home during a disaster.

Though this is just a corollary benefit of the Leaf, Nissan’s announcement stresses the idea that electric vehicles could offer a wider range of purposes than just mobility. A number of new housing communities that are being developed with “smart grid” technologies have homes with EV charging stations. As with the Sumitomo building, these stations not only provide electricity for charging the battery of an EV, they also accept electricity from an EV that can be used in the home.

Such news is being stressed as more carmakers enter the EV field. Mercedes Benz Japan said it will start selling its own electric car, Smart, as early as August due to consumer demand. It will be the first foreign EV sold in Japan. At the moment the price hasn’t been determined, but an executive with the company has said it will be competitive with domestic EVs. The Leaf’s sticker price is about ¥4 million, but with the restart of the government’s eco car subsidy, a consumer could take it home for about ¥3 million. The Mitsubishi EV, the MiEV, is even cheaper. After subtracting the subsidy it would cost a little less than ¥2 million.

In related news, Panasonic has said it will start selling a rechargeable storage battery system (chikuden) for the home starting next week. The battery specifically takes advantage of home solar systems, and is mainly being promoted as a stopgap measure for power outages. The problem with solar systems is that they only work when the sun is shining and without a storage device any excess power goes to waste if it isn’t fed back into the grid. This battery can store solar power for the night, for a rainy day, or for blackouts. The battery is a lithium ion type, measuring 45 cm by 15.6 cm by 60 cm. Its capacity is 4.65kW per hour. When fully charged it can supply a house of average size with normal power for two days. The main drawback is the cost, which is ¥2,110,500. It’s cheaper to buy a MiEV.

The eel deal: Sky’s the limit for unagi prices

Saturday, March 10th, 2012

More expensive than diamonds

It was only about a year ago that scientists discovered where Japanese eels, locally known as unagi, spawn. It turns out to be somewhere near the West Mariana Ridge, not far from Guam. The discovery was important because after hatching unagi fry swim north and are caught at sea in the waters off Japan, China and Taiwan. The fry are then sold to farms where they are raised until they are full-grown eels. However, since the 1970s fry catches have steadily dwindled due to overfishing and climate factors.

The discovery of the hatching grounds, which may help scientists figure out a way of better raising unagi from eggs, couldn’t have come too soon. At the moment wholesale prices for unagi are skyrocketing, threatening the livelihoods of many restaurants that specialize in eel cuisine. The owner of three eel restaurants in Tokyo was recently quoted in the Asahi Shimbun as saying that last week the price he paid for one eel increased by ¥300. That’s the eighth price increase since the year started. And he buys his unagi from China, which is usually cheaper than domestically raised eel. The wholesale price of Chinese eel has gone up fivefold in the last three years. Right now a kilogram — about five eels — costs him ¥5,800. The cheapest unaju (grilled eel on rice) in his restaurant is now ¥3,000. Though the owner has increased prices accordingly, he’s still in the red. He’s so desperate, in fact, that he’s printed the wholesale price on the menu so that customers understand why they’re paying so much all of a sudden, and he’s thinking of closing one of his restaurants. Another eel restaurateur in Nihonbashi told the Asahi that he’s already had to break into his savings to keep his establishment running. He’s reluctant to raise prices because of the current deflationary trend. “If prices go up,” he said, “more customers will turn away.”

Continue reading about unagi →

Money isn’t everything for renters…or is it?

Wednesday, March 7th, 2012

The real estate information magazine At Home has released the results of a survey it conducted in December among 600 people who are looking for rental apartments in Tokyo’s 23 wards. The main purpose of the survey is to find out how much people compromised when selecting an apartment, the idea being that, especially for young persons, there is no such thing as an ideal affordable apartment in Tokyo, so which criteria were respondents most willing to compromise on and which ones were they totally unwilling to compromise on? They were not allowed to say rental amount, size of apartment or surrounding environment, probably because everyone compromises on those three.

You can't get that here

The number one answer (30.3 percent) in terms of what they would compromise on was distance from the nearest train station, which tends to be the most reliable criterion in Tokyo for determining cost of a rental. The second most common answer was age of the apartment. However, when it came to criteria they wouldn’t compromise on — for this question respondents were allowed to give multiple answers — the number one answer, once again, was distance from station (72.2 percent), with separate bath and toilet and higher than second floor tied for second place. The third answer was age of apartment. When asked what upper limit they would settle for in terms of distance from the nearest train station, 39.1 percent said between ten and fifteen minutes and 31.8 percent said between five and ten minutes.

Nevertheless, the main criterion for compromise is always the price of rent. Among the single persons surveyed (average age 31; average salary ¥5 million) the average rent they were “looking for” was ¥89,000 a month, but for the apartment sizes they desired the average rent in realistic terms was calculated by At Home to be about ¥128,000. For married respondents (average age 33; average salary of householder ¥7.4 million) the difference between what they want to pay and what they would realistically pay was about the same, ¥39,000. That would seem to represent the perception gap regardless of income bracket.

At Home concluded that 40 percent of people looking for an apartment in Tokyo “have to compromise even before they start looking,” and when asked if they thought that life was all about compromise, 60 percent answered “yes.”

Civil servants are different, especially when it comes to social security

Friday, March 2nd, 2012

A major feature of the Democratic Party of Japan’s manifesto that helped make it the ruling party was its proposed overhaul of the social security system. One feature of the plan was to combine two types of pensions. Regular full-time employees usually pay into the kosei nenkin system if they work for a private company, or into the kyosai nenkin system if they work for a public entity. This latter group includes civil servants, whether they work for the central government or a local one, and school teachers, including instructors at private schools.

You're the only one who cares about your pension

However, there is a real difference in terms of both premiums and benefits between the two systems. Though in both cases, the employee splits his contributions with his employer, the rate is less for kyosai nenkin members than it is for kosei nenkin members. Even more significant, kyosai nenkin members after retirement receive ¥20,000-a-month more in benefits than do kosei nenkin members. And that’s not all. While the widows of both kosei nenkin and kyosai nenkin members can receive a special pension when they survive those members, under certain conditions other surviving family members of deceased kyosai nenkin members can also receive benefits. That does not apply to kosei nenkin members and their families.

The problem with the proposal to combine these two systems is that public servants will lose these special privileges. The kyosai nenkin system will adhere to the regulations associated with the kosei nenkin system, which is is why it hasn’t been discussed much during the current Diet session. The bureaucracy, needless to say, isn’t very fond of the proposal and is fighting it.

Another social security proposal from the manifesto that seems to have died on the vine is bringing more non-regular employees into the kosei nenkin system. At present, anyone who joins has to work at least 30 hours a week. Otherwise they have to pay into the kokumin nenkin, or regular pension, system. Forces in the DPJ were supposed to submit a bill during this session that would change the rules for kosei nenkin members to allow anyone who works more than 20 hours a week and has been in his or her position for at least six months to join. In this new system, a 45-year-old woman who makes ¥100,000 a month must pay a set premium of ¥15,000 a month into the basic pension system, but if she meets the conditions of the new system, she would join the kosei nenkin system and split the premium with her employer, which means she’d pay only ¥8,000 a month. At retirement, that amount would give her ¥500 a month more in benefits than the basic pension benefit for each year of payment. So if she paid into the system for 20 years, she’d get ¥10,000 more a month.

The main difference would be for “type 3″ members, meaning wives of kosei nenkin members. At present, type 3 members don’t have to pay anything, but under this proposed revision the housewife would have to pay ¥8,000 a month, just as the employed woman would; that is, if she decided to join.

It goes without saying that the main obstacle to implementing this plan is employers, who don’t want the extra burden of having to pay their part of kosei nenkin premiums. In any case, the government’s idea of a totally integrated social security overhaul that would result in a guaranteed minimum pension has been roundly criticized, so it seems even less likely that these two proposals, which wouldn’t really cost anything, have much of a chance. At present, the only thing the administration cares about is pushing an increase of the consumption tax.

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