Japan During the Third Food Regime (Since 1973)

As already shown, the second food regime entered into crisis in the early 1970s, when the US detente with the Soviet Union in 1972-1973 cleared surplus grain stocks for the first time in the post-war period. This situation pushed the USA to impose an embargo on different agricultural products. It was the 1973 embargo on soybean exports which affected Japan significantly, as over 90% of the imported soy came from the USA, while Japan accounted for over 20% of American soybean exports.[1] The embargo lasted only a few days - from June 27 to July 2 - and it was soon replaced by a system of export control until October of the same year. From a mere agricultural and economic point of view, the embargo did neither change Japanese food imports nor did it provoke an increase in food prices, but the psychological effects were notable. For the first time in the post-war period, Japan understood the fragility of its food supply system and the risks linked to heavy dependence on a single supplier. The Japanese government thus decided to launch a food diversification strategy, encouraging joint public-private ventures to consolidate alternative food sources. During the 1970s and the 1980s, Japan applied the principle of kaihatsu-yunyu (literally ‘development and imports’) for Official Development Assistance (ODA) projects. Japanese authorities used ODA funds to promote agricultural development in developing countries: soybeans in Brazil, corn in Thailand and Indonesia, coarse grain in South Africa, China, Argentina, and Australia.[2] Moreover, through tax incentives, the government tried to help Japanese agribusiness corporations to invest in these countries in order to produce food for import to Japan.[3] The most famous of these projects is probably the PRODECER, a 22-year programme started in 1979 for the development of soybean production in Cerrado, a vast area in central Brazil. The Japanese government provided 28 billion yen of ODA for the transformation of over

334.000 hectares of Cerrado into soybean farmland.[4]

In this way, Japan changed its strategy of food supply and diversified its supply sources. Japan’s transnational corporations became the new protagonists of this change and the examples of investments in the agricultural sectors all over the world are innumerable. A non-exhaustive list of the most important investments abroad includes: Mitsui Corporations, one of the largest Japanese corporations, purchases grain at ports in producer countries for import to Japan and controls over

120.000 hectares of farmland in Brazil for the production of soybeans; Nissin Food Products, a major Japanese instant noodle producer, invested in China in the acquisition of 16 factories, 120 sales offices, and 14,000 workers for the production of instant noodles for export to Japan; Itochu Corporation formed a joint venture in China to grow cucumbers for pickles and Chinese cabbage and formed a joint venture with Brazilian corporations for the development of soybean production in Mozambique; Sojitz invested in Ukraine in the production of non- GMO soybeans; since 1964, Yakult Honsha has expanded its production in Taiwan, the USA, Brazil, Korea, Australia; other food processing companies, especially of rice products such as rice crackers, have invested in Australia to access cheaper supplies of this grain; Japanese firms also invested in Australian beef production, in order to ensure product quality and safety standards and to create a more secure supply chain.[5]

From a food regime perspective, these data show how Japan is playing a primary role in the creation of a new global system of food trade and how it is trying to preserve its own food security by means of a strategy based on the diversification of food supplies and investment in new food production in every corner of the globe, posing a major challenge to US supremacy in food exports.

  • [1] United States International Trade Commission. U.S. Embargoes on Agricultural Exports, 5.
  • [2] Hillman and Rothenberg. Agricultural Trade, 46—47.
  • [3] Hongo and Hosono, Burajiru no fumo, 3.
  • [4] See: http://www.maff.go.Jp/j/kokusai/kokkyo/toushi/pdf/1304mgj4.pdf.
  • [5] Farrell, Japanese Investment, 105—126.
 
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