Japanese dairy and livestock farmers are in crisis due to skyrocketing feed prices

Because of skyrocketing feed prices, dairy and livestock farmers are experiencing financial difficulties. In Gunma Prefecture, a farmers’ organization will hold a big rally this month in cooperation with various local organizations to overcome the present crisis of dairy and livestock farming.

The main cause of the crisis is the sharp rise in the price of imported feed. There has been a 40 percent price rise since 2006. The price of U.S. corn, a main ingredient of livestock feed, has tripled .due to the growing production of ethanol using corn and to an increase in the cost of transportation due to oil price rises.

The U.S. Bush administration has unveiled a plan to increase ethanol production by providing subsidies to its producers, making a fall in prices more unlikely.

Poultry farmers are the hardest hit because they most heavily depend on imported feed.

Kato Michio, who runs a poultry farm in Gunma Prefecture said, “I use only imported feed. Moreover, egg prices have been falling. If the present situation remains unchanged, I will have to close down my operation by the end of this year. I’m worried about my employees.”

When poultry farmers have financial difficulties, they usually count on a relief fund that makes up for the difference up to 90 percent of the standard price, which is currently 166 yen per kilogram. The fund consists of contributions by poultry farmers and distributors as well as a subsidy from the Agriculture Ministry in case of a market plunge.

Pig farmers are also hard hit by skyrocketing feed prices.

Jinbo Sigeo, who has run a pig farm for more than 40 years, said, “If the fund is abolished, that means an end to my pig farming.”

The relief fund, established at the initiative of the Agriculture Ministry, is used to ease the impact of a rise in the price of animal feed.

The fund, however, is defective in that it will not be available if the price of feed remains as high as the previous year.

Farmers think that a special measure is necessary to get over the crisis.

Sumitani Teruhiko, dairy farmer and chair of the organizing committee of the rally, said, “We can’t accept the government policy of using 59 trillion yen of gasoline tax revenue exclusively for road construction. Cutbacks in wasteful military expenditures are necessary now to secure fiscal sources. It is important for farmers to raise their voices.”
- Akahata, February 4, 2008