Posts Tagged ‘agriculture’

Tobacco farmers lost but not forgotten in tax rumble

Monday, January 2nd, 2012

Smoke 'em if you got 'em: JT HQ in Toranomon, Tokyo

As every smoker in Japan knows, the cigarette tax was raised in the fall of 2010. With ¥3.5 added to each cigarette, it means a pack suddenly cost at least ¥70 more, and as a result sales have dropped by about 20 percent. So-called sin taxes are double-barrelled: They have a behavior modification purpose of discouraging users from over-indulging, and they’re an easy political sell since the consumers (and maker/providers) usually aren’t considered a sympathetic or powerful constituency by the general public. Consequently, the government is thinking of adding another ¥2 per cigarette tax levy to help pay for reconstruction.

The suggestion has been tabled for the time being, though it will likely be revived. The main reason for the postponement isn’t so much Japan Tobacco, which has a monopoly on tobacco sales in Japan, but rather the farmers who supply JT. There are approximately 10,000 households that make a living from growing tobacco, and about 40 percent have said that they plan to quit since they see no future in the crop. The presumed reason is the tax and the trend for quitting, but many farmers say they are getting out of tobacco because JT asked them to. Since JT is obliged to buy all their product, these farmers no longer have a guaranteed future, and with the Trans-Pacific Partnership possibly looming on the horizon, there’s even less of an incentive to stick it out.

Tobacco, like salt and rice, used to be a government monopoly. That changed in 1985 when the monopolies were abolished and Japan Tobacco was established. Despite the change in nomenclature, JT pretty much continued to operate as a monopoly, since it had to buy all the tobacco produced and controlled all sales of cigarettes. JT determined the price of tobacco before each growing season, meaning there was never a market for the crop. This worked fine while sales were strong, but after they peaked in the mid-90s revenues steadily decreased. Starting in 2004, JT solicited tobacco farmers to retire, and about 20 percent did exactly that. The amount of farmland dedicated to tobacco decreased by about 10 percent. Last year, JT asked more farmers to quit the game, and the decrease in farmland was 30 percent.

Continue reading about a possible hike in tobacco tax →

The upside and downside of the heat wave, fruit-wise

Thursday, September 2nd, 2010

Hot stuff: Reasonably priced Philippine mangoes and pineapples share space with Mexican avocadoes

Hot stuff: Reasonably priced Philippine mangoes and pineapples share space with Mexican avocados

Compared to other developed countries, Japan doesn’t consume that much fruit. For proof, all you have to do is go to your local supermarket, where the selection is more meager than what you’d find in American or European stores. The main reason is that fruit is still considered something of a luxury in Japan. The Western idea (or, at least, American) of grabbing an apple for a quick snack or energy boost is practically unheard of here. You buy an apple, bring it home, most likely peel it, cut it into sections, and consume it with great appreciation, usually with the aid of toothpicks. And then, of course, there’s the practice of giving fruits as gifts, which brings up the proverbial ¥10,000 musk melon.

Because of this attitude, fruit prices in general are relatively high, with the possible exception of bananas. Growers make sure their produce is uniform in quality and, most importantly, size. The reason for uniformity is pricing. Retailers don’t sell by the kilogram, they sell by the unit, which means each piece of fruit has to be the same size and shape as the next one. In recent years, consumers have started to buy “irregular” vegetables because they are cheaper, but “irregular” fruit are a different story. What this means is that farmers concentrate on one type of apple or peach or whatever and, in order to keep the price high, make them as large as possible. You’ll never see an apple for less than ¥100, and you’ll usually only find one or two types in a store, whereas in the U.S. there are usually five or six types. Unfortunately for fruit lovers, fruit farmers are pretty powerful, so the amount of imported — and cheaper — fruit is relatively small and limited to produce that isn’t grown here much: grapefruit from South Africa, navel oranges from California, pineapples and bananas from the Philippines, avocados from Mexico, kiwi fruit from New Zealand.

Because of this year’s hot weather, fruit prices have been even higher than they normally are since most locally grown fruits need a certain amount of cool or even cold weather to develop properly. Also demand seems to go up when the temperature climbs. Prices for the traditional summer fruit, suika (watermelon), is running up to 40 percent higher than normal: ¥500 for those small, handball-shaped melons, and ¥300-¥400 for one-eighth portions of the larger, oblong watermelons.

That’s the downside of the heat wave. The upside is that tropical fruits, which tend to be extremely expensive in Japan when they’re available at all, are coming down in price. One of the reasons is that tropical fruits thrive in hot weather, so it’s now possible for local farmers to grow them more easily and abundantly. A farmer in Saitama has had great success growing mangos this summer, which he usually can only grow in limited numbers in a greenhouse. Saitama sounds pretty far north for mango-growing, and in the past, the only places in Japan where you could grow mangos were Okinawa and parts of Kyushu. But the hot weather also means that imported mangos, papayas and other tropical fruits have come down a bit in price. We’re not going to say it’s a silver lining of global warming, but mangos are pretty tasty as long as you know how to cut them.

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