May 27, 2013

The depreciation of the yen, caused by the “Abenomics” policy of providing easy money, has delivered a hard blow to dairy farmers in Japan who largely depend on imported feeds. Amid increasing costs, “Every farmer is screaming out for help,” an official of a dairy cooperative said.

“I’ve tried hard to cut costs, but can hardly keep up with the increase in the price of feed,” said Shudo Kozo, who is raising 202 cows in Oita Prefecture.

The price of imported hay has increased by 5-6 yen per kilogram since January. This means that Shudo has to pay 400,000 to 500,000 yen more a month for hay. Electricity rates were also raised in April. He now pays an extra 230,000 yen a year for the cost of operating a milking machine and a bulk cooler alone. The increase in costs for fuel oil for tractors and fork lifts are also heavy financial burdens.

Shudo Norie, Kozo’s wife, lamented, “Nothing is left after paying all the bills and the wages for our three employees. Our savings have disappeared.”

Raw milk prices remain low at below 100 yen per kilogram. Though milk producers are demanding a higher price, negotiations with dairy companies have bogged down.

Under such a situation, more and more farmers are giving up dairy farming altogether. In Oita Prefecture, the number of farmers keeping milk cows has decreased by 16 to 152 during the period between April 2012 and 2013, according to a farmers’ cooperative in the prefecture.

An official of the Oita prefectural federation for dairy farmers’ cooperatives pointed out that those farmers quit farming principally because of flagging milk consumption, low milk prices, and the lack of a successor to take over the farm. However, the government’s weak yen policy and the resultant rise in imported feed prices have surely “triggered their decision” to give up the farm, the official stressed.

Norie along with 149 other women in the Oita dairy industry on May 11 established a women’s group to call for higher raw milk prices and measures to boost farmers’ incomes. She said, “I hope the day will soon come when every farmer will be able to engage in farming without fear of losing the farm.”