The Great Japan Potato-Chip Crisis | Hacker News Reader

The Great Japan Potato-Chip Crisis

bloomberg.com

115 pointsvezycash151 comments

It's an interesting experience seeing some shelves in 7-11 here in Tokyo partly empty due to this shortage -- outside of perishable goods like onigiri, it's pretty uncommon to see something like potato chips missing on a shelf. I wonder how long it'll take for the shortage to end, and if they'll be able to mitigate it by importing. One thing it doesn't mention in this article is that companies are pretty strict about quality of their imported goods like potatoes in Japan, probably due to the restrictions by the government, and are known for being hesitant about US potato quality, for example.

For those interested in more information about the shortage, here's an analysis from the USDA Foreign Agricultural Service: https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Potat...

Are US potatoes really lower quality than Japanese ones?

Without protectionist regulation Japanese farming isn't competitive.

> Without protectionist regulation Japanese farming isn't competitive.

Without protectionist regulation and subsidies European and American farming isn't competitive either.

http://www.npr.org/templates/story/story.php?storyId=6256274

Fair enough. I just meant to say that the point of the regulation isn't necessarily just the quality of the produce.

It may have little to do with policy-making and is surely anecdotal, but Japanese produce is far better and cheaper than what I used to get in America. (And the same is true of meat and baked goods.) The difference is plainly obvious. The idea that anything other than junk food would be worthy of importing from elsewhere is almost laughable to me. On the other hand, I don't buy corn or potatoes too often here.

As for better: some of it is and some of it isn't. Lettuce is definitely not better. As for price... not so much. Fruits are much more expensive in Japan.

I doubt it, especially since you can generally get a much wider range of varieties of potatoes in the US than in Japan, not just organic/non-organic, but different colored potatoes as well. My guess is that the rhetoric coming from the companies that US potato quality is lower is more due to the government being protectionist about national agriculture.

It's also probably due to the mentality that producers want specific kinds of potatoes for specific purposes and maybe only trust Japanese farmers to make the specific kind of potatoes the way they want them.

I remember seeing a "food security" campaign where demonstraters wanted the country to achieve 100% food sufficiency as a national security prerogative.

Wasn't sure if it was a strange form of nationalism, or a veiled lobbying effort by an interest group (the abundance of very small scale farmers across the countryside)

Intuitively it sounds quite sensible. The more a nation can sustain itself on its internal market, the longer they can hold out through negative external circumstances.

Much like energy. When everything is going rosy, relying on high % imports can be economically beneficial. In the case of extreme events like local or global wars, it leaves the country extremely fragile. Even outside wars, if there are drastic price increases in the global market then you are highly exposed. Look at OPEC, the power they wield and how they direct their efforts in essentially geo-political 'battles'.

I don't know much about it, but I suspect that energy and agricultural self-sufficiency are very important and underestimated factors in (developed) nation state security.

I don't think they're underestimated. Most rich countries have large subsidies to national farmers. In the US federal budget, Food & Agriculture is the largest slice right after the big ones (social security, healthcare, military, veterans).

I'm led to believe that JA (the agricultural coop) is one of the strongest lobbies in the country. The government had a lot of work cut out for them to sell TPP.

What's strange about it? Most nations have such a policy goal, regardless of how merited (or not) it is.

Farming in the US is heavily subsidized due to a nexus of national security, the farm lobby, and food stamps.

So it's a legitimate concern many nation's have, even EU countries have similar programs.

In the US it has gotten out of hand, however.

Security of food supply is now also nationalism? Are we allowed to do anything in our self-interest anymore?

Food security is not nationalism.

But people actually campaigning for it...

People, who rarely get worked up about anything that doesn't put money in their pocket or stroke their ego, giving enough of a damn to go out and campaign for it... well, OP said it directly: he wasn't sure whether it was about putting money in their pocket, or stroking their ego.

Or, maybe they'd like a secure, trustworthy food supply.

Clearly they've failed at achieving ”food security” if the local demand for potatoes has outstripped local supply.

The apparent bias against resorting to importation also seems to indicate it is largely thinly-veiled protectionism and political cultivation of special interests.

Furthermore however intuitive it may seem it runs contrary to hundreds of years of economic orthodoxy, known as Ricardo's Comparative Advantage.

It depends on what you mean by security. They may not be insulated from large-scale crop failures, but they are insulated from heavily-subsidized foreign companies dumping products on their market in a bid to undercut domestic prices and eliminate local producers as competitors.

As with most things, it comes down to a trade-off: increased risk of disruptions from ecological events in return for a decreased risk from geopolitical situations. One is not inherently better than the other, but Japan has a preference for self-sufficiency as much as possible.

> Clearly they've failed at achieving ”food security” if the local demand for potatoes has outstripped local supply.

How so? Food security is being able to feed the country even when it's completely isolated, not having potato chips on store shelves.

Likely it's just something similar to the argument that Japanese snow is unique so they don't need French skis[1, 2] when they attempted to frustrate the importation of Rossignol skis into Japan. Or they could not digest beef in the same quantities as other peoples when they wanted to thwart importation of US beef into Japan.

[1]http://www.nytimes.com/1988/03/06/weekinreview/the-world-jap...

[2]https://books.google.com/books?id=lfAu0Tl0018C&pg=PA105&lpg=...

From memory, U.S. potatoes have gone GM (genetically modified), IIRC. This may present a barrier -- I don't know WRT Japan.

(And if so, maybe one day will be thankful for those barriers and the genetic diversity they facilitate/protect.)

> companies are pretty strict about quality of their imported goods like potatoes in Japan

>> Calbee spokeswoman "cited regulatory hurdles, which limit the amount of imported potatoes that can be used in products, as partly responsible for the shortage"

Japanese farmers are reliable voters. The evidence for an electoral motive, over a national security imperative, is Japanese farms' small plots and low yields [1]. The system is set up to maximise the number of farmers (i.e. voters who farm) over production.

[1] http://www.economist.com/news/asia/21576154-fewer-bigger-plo...

Off topic, but diversity in economic approaches like this is one of the beneficial things we lose as we embrace globalism.

I'm not sure if it's a result of this kind of protectionism or not, but in general meat and fruit especially is much higher quality than what I had when I was living in the US.

For fruit, the size of the individual fruits is smaller in general, but much more flavorful. The yields are lower (and thus price more expensive), but that's what happens when fruit is bred for flavor rather than volume.

I imagine meat has something to do with the diet. I don't think Japanese farmers are feeding their cows human candy.

Italy also has small farms and delicious vegetables.

I was thinking, "this is ridiculous; why can't they just import more potatoes?" and then I found this:

"She also cited regulatory hurdles, which limit the amount of imported potatoes that can be used in products, as partly responsible for the shortage."

No, it is primarily responsible for the shortage.

Regulatory hurdles in the import/export market are like a person trapped in a sphere at sea. Even when you run out of drinking water inside the sphere, you still don't want the sphere to let in saltwater. It's all water but you shouldn't drink it. Your position makes sense where the sphere is floating in clean fresh drinking water. However, like an ocean is much larger than a lake, there is much more toxic crap on the market for import than there is good. Strong standards with proactive, responsive agencies make for the best public protections in imperfect markets. Whether or not this is caused by a failure there is a good question.

Why do you assume that the primary purpose of the regulatory regime is to maintain high standards?

If it is not and its primary purpose is economic protectionism, in the face of otherwise fair market competition, then I am against intervention. I did not mean to imply that was the purpose for which all those agencies are used, nor did I intend to present a black/white choice in the perception of said matter. In this case, it does appear to be a case of at least limited protectionism; however, my information and expertise here is limited.

If, as your post seems to be recommending, such regulations were abolished, Japanese farmers would pretty much cease to exist because of their inability to compete with cheaper imports. Maybe you consider that an unacceptable tradeoff for some potato chip shortages but it's not clear that the Japanese share your sense of priorities.

I guess as a democratic state they can decide to restrict imports. But then don't ask anybody to give two shits that that there's a shortage.

I don't think Japan is appealing for international sympathy for its potato chip shortage, man.

Point taken

Well in this case it's Bloomberg and not the Japanese people. I guess a people who can keep composure in face of a nuclear meltdown and tsunami won't exactly lose their minds over a few weeks of potato chip shortage.

Good grief. We went nearly 2 years without me ever seeing butter on the shelves. Shortages happen here.

Well, when they ask you to care, you can tell them that. I wouldn't hold my breath, though.

If you regulate against selling potato chips at the market rate, a likely outcome is a shortage of potato chips.

Grandparent didn't suggest a problem with protectionist regulations - simply that the regulation is the probable cause of the shortage. There is a link.

Actually what he said is that regulation is "primarily responsible" for the shortage, which seems contentious -- what about the failed crops, after all -- but it seems to me that he probably had some motivation for saying that beyond pedantry.

No amount of failed crops would cause a shortage if trade were free since there's a region in the world SOMEWHERE that's having a good year.

I suppose that's why there are no more famines anymore.

Famines are caused by bad governments, failed states, and violent conflicts. Not because there isn't enough food.

If you have money, and trade is fairly free, you would never have a famine unless it's world-wide.

I mean, let's say all of your crops failed. So what? Just buy them from another country. It's a little more expensive, but better than starving.

So why do people starve? It's when your money can't buy anything from another country because people from other countries don't have faith in your currency. Or when you can't trade at all for some reason.

Famines are chiefly an economic problem.

No, they're a political problem. There are no famines in democracies.

Unless we want to start playing semantic games about what counts as a "real" democracy that isn't really true.

Well, in principle, that makes sense, but, to trot out a well-rehearsed example, what are we to make of Ireland continuing to export food during the potato famine in your framework? An unfettered free market will get food to people who can pay the most for it -- which isn't necessarily the same group of people who most need it.

Admittedly we are getting away from the example of Japan here where there isn't really a serious danger of famine either way without a drastic change in material conditions.

As nradov said above, "Famines are caused by bad governments, failed states, and violent conflicts. Not because there isn't enough food."

Obviously, the Irish Potato Famine was caused by bad government. Instead of being allowed to keep their own potatoes, the government of occupied Ireland, run by Britain, forced them to export them all.

That's not quite right. Large holders wanted to sell the food for more money. It wasn't a matter of government agents marching in an commandeering the fields.

That's still an example of bad government. It's the government's job to act in the best interests of the nation and the citizens, even if that means going against the wishes of the rich elite.

Several people are participating in this conversation and some of them seem to be arguing that if you just totally liberalize trade the problems will solve themselves. I agree with you, though.

Is this more to your liking then:

Japan is peculiarly vulnerable to potato shortages because it restricts imports, even when its own potato crop fails.

Ok, sure. But there is currently a shortage of lettuce going on in the supermarkets here despite a liberalized trade regime. It's not a panacea.

Not for lettuce, no. It has a short shelf life and doesn’t travel well.

The regulations can be changed without putting domestic farmers out of business. For example, they could add tariffs to imported potatoes to make them cost as much as (or even more than) domestic potatoes, and use the revenue to help Hokkaido farmers rebuild their farms. No need for a hard limit on the imported amount.

True enough, although I'd think that by the time such a huge overhaul were accomplished the shortage would be over.

If there is political will, things like that can be done remarkably quickly.

South Korea had a massive shortage of chicken eggs last winter due to an avian influenza epidemic. It took only a few weeks for the government to start importing fresh eggs from abroad, something that had never been done before. It wasn't enough to get prices down to normal levels, but at least the government acted quick -- especially considering that the nation was in the middle of a Presidential scandal.

Unlike South Korea, Japan is essentially a single-party dictatorship. They can pass whatever laws they deem necessary if they really want to. I'm assuming that they don't want to, probably because there's someone who profits from high potato prices.

It wasn't that long ago that the DPJ held power. Anyway, that's a fair point, but I think a shortage of eggs where people eat a lot of eggs and a shortage of potato chips are kind of different situations that don't necessarily need the same kind of response.

It's not about priorities, it's about the cause. Just be frank and admit a protectionist policy is the cause of a market inefficiency. It's okay to make that tradeoff, just be honest with yourself.

You may find Japan a bit frustrating if you were ever to visit. :)

I have visited and it's not that frustrating to me because I don't have to live there and I completely understand them deciding to make protectionist policies over choosing market efficiency.

> If, as your post seems to be recommending, such regulations were abolished, Japanese farmers would pretty much cease to exist because of their inability to compete with cheaper imports.

Good, they can do something more useful with their time because Japan does not have a comparative advantage in farming. Having farms in Japan is very inefficient, since there are better regions to grow these crops.

Sure, you can't displace these farmers tomorrow, but slowly increasing the imports is a good idea. For one thing, it would decrease the cost of living for the average Japanese person, even if farmers are negatively affected.

Why is a farmer more important than a city dweller?

I would assume because maintaining some level of domestic food production would be important for national security.

I would assume maintaining healthy trade relationships is important for food shortages like these, as well.

Is the claim here that Japan is not able to trade as often as it would like? That seems to be obviously wrong.

Of course it's not. When you erect trade barriers with other countries, they don't want to trade with you that much either. So exports to other countries are probably limited by the import policy of Japan, since they never made trade deals that lower tariffs on both ends.

But that is what is, in my opinion, obviously wrong. Go on a drive in any town in America and tell me there aren't a lot of Japanese products being sold here.

Which are much more expensive than American goods, which is what I'm saying is bad. If there isn't an extremely good trade deal between the two countries, then the tariffs will be high. Japan doesn't WANT a lot of American stuff, so they have no incentive to give a really good deal to American manufacturers.

http://www.cnbc.com/2017/02/10/trump-and-abe-us-may-struggle...

indeed, it seems it's hard to get a good trade deal with Japan (asking for low tariffs on American imports)

A Mazda is much more expensive than a comparable Ford?

You have to pay more for a Mazda than you otherwise would. It doesn't matter if Ford makes worse or more expensive cars.

And yet Japanese cars consistently are among the top sellers in the United States (and are hardly uncommon on most of the globe's continents). It seems to me that there is nothing "unhealthy" about Japanese trade relationships.

It‘s not as simple as that.

Japan‘s agricultural system was intended to be a temporary prop, to help agriculture recover after the War. The people would experience inflated prices and erratic supplies, but that was thought a price worth paying.

The system has been kept in place for decades longer than its stated purpose required. The forces that keep it in place are powerful, and democratic only in the loosest sense of the word.

But nothing in Japan is really ever temporary. Once it's in place, it takes something pretty major to move it out of place.

And for the record, I don't think it was ever intended to be a temporary measure. The whole reason a million people died of hunger after WWII was because there was no local production of food. And not only that, there was no centralised food distribution system, so even when food became available, there was no way to get it to people.

Nobody that I know of complains about about the agricultural system here (granted, I live in a farming community :-) ). The only people I see complaining are people with foreign interests who want to dump their produce in order to destroy production in other places in the world (as a Canadian, I will say that our country has historically been one of the worst in the world for this).

The biggest problem is really that all of the farmers are dying of old age and nobody in their families want to continue, so I suspect that the "pretty major" thing will probably happen sooner rather than later. I feel strangely thankful to Trump for killing TPP so that the solution is less likely to be selling out to foreign interests.

> Nobody that I know of complains about about the agricultural system here (granted, I live in a farming community :-) ).

I did (granted, I have a background in Economics).

Tell a Japanese how much a tin of tomatoes costs in Japan compared to the US or the EU, or a mango, or even a packet of generic acetaminophen (paracetamol) for that matter.

Now ask them why. Nine times out of ten, they’ll say something about the Japanese culture of quality and attention to detail. To be fair, Japan often does demand higher standards, but that’s not nearly enough to explain the full price discrepancy.

They don‘t complain because they don‘t know what’s going on.

The answer to the question why is quite obvious from where I stand: Farmers get paid more because of the protectionist policy of the government. The distribution system also prioritises local food over imported food. They also spend money on things like being able to trace exactly where the food comes from. When my neighbour takes his rice to the JA, I can buy it at the local supermarket the next day. His name is on the bag.

The government also disallows the sale of farming land. This ensures that you don't have a few mega operations taking over all of the farm land. If you want to start farming in Japan, you will have no problem because land is available. If you want to start farming in the UK? Good luck unless you have millions of pounds to get started. Even then you probably won't be able to get any land.

In order to ensure that the land is in productive use, land owners get government subsidies when it is. Again, this ensures that land is available for farming.

Compare the amount of money that Japanese farmers get for their produce to US or European farmers. Compare the markup that US and European distributors charge to that of the JA. If you think Japanese farmers don't know what's going on, I think you are very much mistaken.

I was talking about ignorance among the consumers, not the producers. The farmers certainly know which side their bread is buttered on!

Are you suggesting people to vote against their interest? That doesn't sound very democratic.

I‘m not sure what you mean by that.

In Japan, a farmer’s vote has roughly twice the weight of an urbanite’s.

I don't think GP was making a political statement, just commenting on the buried lead, but I'll play devil's advocate.

I want farmers to have jobs too. I'd still find it sad if that were the rationale here, though, because while protectionist measures can save jobs, they remain one of the worst tools to do so, typically costing several hundred thousand dollars per job.

Tire manufacturing jobs saved at $900,000 per job: https://piie.com/publications/policy-briefs/us-tire-tariffs-...

Textile jobs saved at a cost of $4 million per job: http://www.heritage.org/report/the-textile-and-apparel-trade...

Sugar quotas costing $800,000 per job: http://davidstockmanscontracorner.com/41418/

Those are all US examples. Maybe the Japanese are better at saving jobs through protectionism and get a better return on their restrictions, but those are 10-100 times the salaries in those fields. It seems unlikely they are closing that gap.

Sadly there's just no free lunch. It's like the second law of thermodynamics for economies.

When you shut down economic activity to improve health and welfare, that's fine, you can accomplish a lot that's useful for society.

But when you try to shut down economic activity to create wealth, you generally pay far more than you were trying to save.*

* With the possible exception of infant industry protection, but that's controversial, and hardly an exact science. Either way, potato farming is hardly some new technology where Japan is likely to corner the global market once they build up a little more volume.

> Sadly there's just no free lunch.

There's such a thing as no lunch though, a situation one may find themselves in if their job is re-accomodated to a global location with "higher economic efficiency".

Definitely, the plight of people put out of jobs, regions losing industries, it's not to be understated or trifled with. That's a major half of the problem.

The rock on the other side of this hard place though is that there's also no lunch at all for someone who can't afford basic foodstuffs because of tariffs and quotas block access to reasonably priced goods.

What's worse is that trade protections tend to be incredibly regressive, hitting those shopping for basic necessities hardest, far more than people who can buy yachts from whatever jurisdiction they like.

How do we confront this dilemma? How do we thread the needle? We've never really pulled it off correctly in the past... but there is a way to do it.

If you have real trade assistance programs, then you create a situation where every single person is better off under trade liberalization. The problem is we've talked a good game on trade assistance, but never done it right, and never really reevaluated what works and doesn't.

It doesn't mean three year retraining programs for people five years off from retirement. It's going to include mix of solutions, including some small taxes on goods likely to be imported and straight up wealth transfers to former employees. Relocation assistance or retraining if they want it, but some people won't.

If protectionism costs $800,000 per job, then this is easy. Just tax that good, give the worker their old $60k/yr salary for a few years, no questions asked, and let consumers pocket the difference. You could pay them $60k for life and we'd all still be better off, but some people might prefer a phase out, either way.

> there's also no lunch at all for someone who can't afford basic foodstuffs because of tariffs and quotas block access to reasonably priced goods

Is that a real threat though? I mean, we've had some form of equilibrium in economies for thousands of years, some people do better than others, but people more or less "get by". Whereas now, I have the feeling that we are very quickly getting into dangerous uncharted territory. I see very little reason why China couldn't make 70%++ of everything needed by the entire planet, with some exceptions here and there. And I don't see how UBI is going to solve that problem, if entire countries essentially no longer have any income, since they no longer do anything.

> If protectionism costs $800,000 per job

From a quick look at that report, the quote I found is "In 2006 a Commerce Department study found that three candy-making jobs are lost for each sugar growing and processing job saved by higher sugar prices."

Personally, I'd need something a bit more substantial before I'm going to believe the massive numbers thrown around on the cost of protectionism, especially considering the likelihood of them being propaganda.

> the likelihood of them being propaganda

Welp, that dead-ends conversations.

As a personal disclosure, I neither consider myself complicit with propagandists nor a total sucker. A partial sucker maybe...

I tossed three citations out there because I'm familiar with research on the topic and found those results fairly typical. But I get it, you don't find any of them particularly persuasive. You may not be inclined to listen to any countervailing evidence at this time. That's fine.

If you ever want to poke around at this topic again but are seriously skeptical about finding information you can trust, consider Googling the IGM forum.

The forum surveys economists across the political spectrum on various issues of economic policy.

You'll find massive splits on all sorts of issues, vast disagreements on how to best organize the economy. If you read the bios or works of the participants, the ideological differences of opinion will become fairly stark.

You might find that variety of opinions more reliable in and of itself, or you might simply find some individual you consider reputable on the forum.

From there you may find someone with interesting things to say that you'll trust more than me.

I don't expect you'll find a radically different view on trade, since there's fairly broad agreement that freer trade helps the average citizen, and helps society more than it hurts.

But who knows. Maybe I'm wrong.

Best of luck either way.

Japanese farmers are being subsidized by these trade regulations, at the expense of other Japanese workers (namely, any worker who produces something that Japan could trade for foreign potatoes).

My understanding is that Japan has a very flat pay structure across society, with much less diversity in wages. If so, and if the rest of the world is the correct "market" price, then lots of people in Japan are being "subsidized".

In a sense, their society has chosen this structure, in which case it's not even a subsidy, it is the natural price.

No, the primary cause of the shortage is that 70+% of the potato supply comes from one specific region of Japan, and that that region has had a very bad Typhoon which caused bad crops. IOW, the primary cause of the shortage was a (almost) SPOF in the supply chain.

And why is there a single point of failure? Because there is a hard cap on imports. No cap -> no shortage, just as much as no typhoon -> no shortage.

> And why is there a single point of failure? Because there is a hard cap on imports.

You don't need to import to avoid the single point of failure. You just need to not have _one_ region where most of your production is.

I think it was last year that McDonald's Japan had to stop selling fries in portions bigger than small since their potatoes were imported from the US, and that supply was cut off due to union strike action in a US port. Any kind of single-sourcing is a bad idea.

it was in 2015.

Singapore McDonald's ran out of curry dip due to the port congestion. Which was really funny to me because the dip was manufactured in the states even if it's not consumed there.

then why not just import chips? even the regular price 2$ pretty package seen extremely high, i am buying 150g back of supermarket brand chips for 0.5€ here, so even with transportation doubling the price it would still cost half of normal Japanese price

It still amazes me that potatoes and tomatoes, originally South America only, have become a food staple in just about every country since.

Chili peppers too.

Well, there is also:

  Rice --domesticated in China
  Corn --Mexico
  Wheat --Middle east

These are now pretty universal and are more important than either Tomatoes or Potatoes.

Fertile Crescent* not Middle East. The Middle East is not really an agreed upon fixed set of places, theres a not-insigifnicant variance in how one can describe it.

True but irrelevant, as I've yet to see a definition of either that did not include Mesopotamia/Iraq.

Cassava too, native to South America, a staple food or costaple in much of Africa especially in drought susceptible parts like sub-Sahara.

Its also quite important to many parts of Asia.

Edit: the impact of the columbian exchange on the world doesnt get enough attention.

(Video for columbian exchange cassava crash course world.history) https://www.youtube.com/watch?v=HQPA5oNpfM4

I like this part the best:

> Twitter users sent encouraging tweets to Calbee, which apologized for the crunch via its official Twitter account.

Props to Japanese for being encouraging, instead of negative!

(And yes, I realize n=1, etc. etc.)

Agriculture in Japan is very under-developed. You add the import restrictions and it leads to produce being twice as expensive (if not more) than most western countries. It also means lack of variety. And organic products are rare. Shortages are a thing bound to happen.

I was hoping for TPP to be accepted, but now I am just going to leave the country.

Most western countries? I find the produce, especially if it's in season, is much cheaper than the produce in Canada, and it's fresher too. Food in the United States is ridiculously inexpensive.

I lived in many European countries and all are cheaper. Same for the US. Canada might be an exception but the time I spent there (Vancouver), produce was cheaper than Japan (I live in Osaka).

Price of fresh produce in the US varies depending on where you are. In many places, using the phrase "ridiculously inexpensive" would get you laughed at and/or castigated.

That said, fresh produce in the US sucks. Every European country I've visited has had notably better produce. I had a garden salad in Italy that actually made me pause and go, "Oh, these aren't supposed to be a form of self-flagellation in the name of health. These is actually delicious food." I rarely have that experience with US produce.

I guess there are other people who would applaud the japanese to aim for self sufficiency in producing food instead of selling out to corporate interests of few engaging in globalized trade.

If it was sustainable, I would applaud. But the reality is that young people don't want to take over the farms and rural population decreases rapidly. Even with incentives, new people don't want to take over farms because investment needed to modernize them is too important.

I am from Brazil, that is a agriculture powerhouse.

1. Young people here don't want to be farmers either, the ones that do want (me for Example) can't afford the land price anyway.

2. Because exporting the same thing over and over again is way more profitable than selling food to locals, most farms focus on those, we have regions where people eat poorly in the middle of gigantic eucalyptus fields that replaced all farms.

3. Point 2 is so bad we actually import lots of food, most notoriously most of our wheat is imported, some places even sell imported pasta, and most of the imports are mass production crap, for example giant apples with no taste, wheat that only works to make very soft crappy pasta that never befome al dente and has excessive amounts of gluten.

I actually envy Japan and other countries that defend their food security.

If you're comparing to produce in the US, the produce here has awful quality and is tasteless. Being cheap isn't that great.

I've just been to Don Quixote and while there weren't that many bags of crisps, they hadn't completely run out of them.

They also had bags of potatoes for sale.

Lots of jagariko and other things which are made from potato powder, which I assume is allowed to be imported.

Can someone explain to me why Japan has an agriculture industry to begin with (though I assume the answer is WW2)? They have an incredibly high population density and are an incredibly small country -- why on earth would you want to waste land on farming? And more importantly, why would you be protectionist about that industry when it will be responsible for land shortages? Import economies are not a bad thing. In fact they are the reason the export economies can work at all.

Why wouldn't you have an agriculture industry ? This is the most vital industry, moreover on a island, when you are next to China, and that country want to assert dominance on the seas. Imagine how would survive the country if China start a blockade without a minimal agriculture at subsistence level.

Then trade with countries other than China (there are plenty of other countries in and near Asia -- such as Australia which has a very large agricultural industry due to having so much land)? Don't get me wrong, there are certain parts of agriculture (fishing for example) that make sense for a country like Japan, but considering how much land is required to grow crops sustainably it doesn't make sense (at least to me) to make your agriculture industry an important part of your protectionist rhetoric.

The OP specifically cited a Chinese blockade in his post. How are those other countries going to get your food to you when China is actively blocking them? They'll have to start a shooting war, and in the meantime your people are suddenly starving to death.

Have you been to Japan? Land shortage isn't a major issue outside Tokyo. In fact, large areas of Japan are primarily farmland. The cities also have amazingly high population densities, and it is common to find vegetable patches and fruit growing right in the cities.

Looking at the dictionary definition of "crisis" I would not call this a "time of intense difficulty or threat of danger or a time when "important decisions must be made"unless the that decision.

There are plenty of real crisis around the world, right? The Japanese should be more concerned about how a certain area ahem Fukushima, is still killing our ocean.

That is a crisis.

TL;DR: protectionism/nationalism 101: shortage because of not willing to import potatoes.

When I saw this in the news I assumed it was a PR stunt. I haven't noticed chips being sold out in my corner of Japan, and anywhere they are it could just as well be because people saw "oh chips are being sold out, I should get some".

This reminds me of the Norwegian Butter Crisis of 2011, although that one was caused by a demand-side shock from low-carb diet fads.

Our condolances to the Japanese people; our hearts are with you.

Life on an island...

Life on an island with a historically strict protectionist food policy. There is no potato shortage, per se (per the article, I'm surely no expert). There's a shortage of potatoes from Hokkaido, and domestic consumers aren't prepared for (or allowed to) buy them from an international market.

Japan isn't the only nation to do this, of course. But they're one of the worst.

Agreed; you can also see the recent butter shortages in Japan for an example of the same issue.

As for why that happens; the farmers are (were?) a huge political ally for the LDP. (The TPP was going to be a huge change for that, but alas, it won't be happening..)

I was wrong about the TPP being completely dead.

http://www.japantimes.co.jp/news/2017/04/16/national/tokyo-s...

I buy imported-from-Japan Kataage [0] potato chips at my local Nijiya market and to my taste these chips are much higher quality than, for example, Kettle brand and Frito-Lay brand potato chips.

Not sure if it's due to the potatoes, but the quality is undeniably (to my taste) higher.

[0] https://www.google.com/search?client=safari&rls=en&q=japan+K...

I suspect that Frito Lay would possibly be capable of using higher quality ingredients/making better quality chips if the market demanded it. Perhaps you are in the minority of people who cares enough to notice the difference?

>Life on an island with a historically strict protectionist food policy. There is no potato shortage, per se (per the article, I'm surely no expert). There's a shortage of potatoes from Hokkaido, and domestic consumers aren't prepared for (or allowed to) buy them from an international market.

Yeah, if only they gave up their autonomy and local agriculture to have more access to chips from abroad.

It's not just chips. Japan's generally protectionist/sheltering attitude towards businesses makes their whole economy structurally inefficient. Japan's nominal GDP per capita is like 40% lower than the US these days.

There is more to life than GDP per capita.

Yes, but economic productivity is still pretty important.

Why is local agriculture more important than local customers?

The idea from what I gather is that the country is capable of supporting itself, and did for centuries, and shouldn't let industries wither and die for short term profit that would kill off industries that allow that ability of self support.

Because being self-sufficient and having a good import/exports sheets makes you more resilient in the mid- and long-run that having all the chips that local customers demand.

You can always allow for more chips whenever you really want. Reversing a damaged trade deficit or self-sustainability? Not so much, and not anywhere near as fast.

Surely there is a middle ground between "stupid chip shortage" and "loss of local agriculture" though. Japan can grow potatoes and trade them too.

Like I said, everyone does this to some extent. But Japan is among the worst

That middle ground would be something like price regulation. Instead of just imposing quotas or forbidding imports of specific goods, require the imported goods to be sold at the market rate of the locally produced good.

It would allow imports to prevent shortages in the market without killing the local producers because there is no reason to stop buying from local producers if the imported goods cannot be sold at a price lower than what the local producers are willing to bear. Distributors would continue buying local, while also adding some imports as a cushion against production fluctuations.

Tax the difference between the local market price and the lower imported good price, when the imports are cheaper. Don't tax when the import is at the same cost/more expensive.

I don't see it as totally outlandish to protect domestic industry at the cost of not being able to get produce as cheaply or easily as you could otherwise. It's not as though Japan is suffering from starvation.

There are government subsidies being given to every farmer, iirc no matter how small or inefficient your operation.

Given that the country is heavily in debt, it's pretty fiscally irresponsible to continue with such a handout.

I'm not sure how much we can trust your vague, half-remembered understanding of Japanese farming subsidies, but it's not clear to me that the right move for a country that's been in a long slump is to start making moves that will destroy domestic industries.

Overhauling exsiting regulation that promotes small scale family farming to one that promotes larger scale, modernized farming methods with improved outputs would strengthen and bolster the domestic ag economy vs its international counterparts, not weaken them.

The current handout to family farmers (many of whom produce paltry crops and own tiny parcels) and their collective lobbying efforts to continue the country's protectionist farming policies is a handout to these rent seekers and stifles the actual long term agricultural output of the country.

vs. what? Having no domestic production? And what happens if China decides to start WWIII and they face a prolonged siege with no domestic food production capabilities?

Or should they leave the feeding of their entire population up to the whims of the US government? I think the last election should make obvious the folly in that line of reasoning.

I am guessing that you are not familiar with the inefficiency of agricultural land ownership regulation in Japan? Start by making it easier for corporations to own farmland and improve the per area output of the relatively little flat land that the country has (Japan is 73% mountainous[1])

Corporate involvement in agriculture is restricted by the Agricultural Land Law and related laws. Joint stock companies are permitted to participate in the farming sector in two ways. One is as “agricultural production corporations,” which can be established anywhere in the country and are allowed not only to lease farmland but also to acquire ownership rights. These corporations, though, are subject to various conditions, including that they derive over half of their sales from agriculture; that over three-quarters of the total voting rights are held by full-time farmers, farmland rights providers, agricultural cooperatives, and other parties involved in farming; and that full-time farmers account for a majority of the company’s directors. In addition, only joint stock companies that restrict stock transfers are eligible for this status. In short, this designation is for incorporated family-run farms, rather than for ordinary companies.

...

At the time it was enacted, the Agricultural Land Law did not even envisage the possibility of farmland being owned or cultivated by corporate entities. [2]

Even the Agriculture Minister conceded this problem in 2008, but little has changed over the last decade.

At his inaugural press conference in September 2008, newly appointed Minister of Agriculture, Forestry, and Fisheries Shigeru Ishiba expressed his intention to reform Japan's farmland system in the following statement.

"I recognize that the biggest problem in Japanese agriculture lies, in fact, in the farmland system. The crux of the matter, to put it in extreme terms, is that we need a mechanism in which farmland becomes concentrated in the hands of those who are ready and willing to farm it, regardless of whether they are individuals or corporations. We have to put in place a farmland system that includes effective incentives to make this happen. This may raise fears that farms could be resold for speculative purposes or used as illegal dumping grounds, but we must focus on the sickness currently afflicting agriculture and must not lose sight of the way things ought to be. Another problem is that even though there are legal guarantees in place to ensure that farmland is not used for purposes other than farming, many aspects of this mechanism are, in reality, ineffective. I do not believe that such practices as having municipal leaders make recommendations on the use of farmland are truly effective in addressing this issue."

The first half of Ishiba's statement addresses the issue of corporate entry into the agricultural sector, which farmers' organizations have claimed will lead to joint-stock companies reselling farmland for residential or other development or using it for the illegal dumping of industrial waste. The second half addresses the problem that rules empowering municipalities to forcibly transfer unused land to other farmers in order to prevent the abandonment of farmland have become dead letters and do not fulfill their intended function.

[1] https://en.wikipedia.org/wiki/Geography_of_Japan

[2] http://www.tokyofoundation.org/en/articles/2008/let-corporat...

[3] http://www.tokyofoundation.org/en/articles/2008/the-issues-i...

Remind me again how allowing large corporate entities to own farmland improves farm output over allowing farmers who... you know... farm to own the land.

In the US, corporate farms = animal abuse, complete indifference to pollution, and a general lack of accountability to the communities the farms are a part of. Furthermore, it has decimated rural communities across the US.

Please allow me to conjecture that you have an overly idealized view of the state of Japan's "microfarm" agricultural makeup. I encourage you to read my citations in the GP post.

some excerpts:

Losing Farmland That Is Essential to Food Security

Of the 2.5 million hectares of farmland that Japan has lost over the past 50 years-equivalent to the total area of rice paddies in Japan today-about half has been converted for residential or industrial use.

...

The end result of this situation is that town halls, pachinko parlors, and other buildings are constructed in the middle of rice fields, leaving Japan's farmland riddled with holes like a moth-eaten dress. Developments like this not only do nothing to lower costs by enabling farmers to consolidate; they even block the sun from surrounding farmland.

France has secured its farmland resources by clearly delineating urban areas from agricultural areas through zoning and by limiting the benefits of agricultural policies to full-time farmers who derive at least half of their income from farming and expend at least half of their labor in farming, thus actively concentrating farmland in the hands of these farmers. These policies have enabled France to raise its food self-sufficiency ratio from 99% to 122% and the average size of its farms from 17 hectares to 52 hectares (as of 2005).

(note: you can collect your farmer's subsidy by being a "part time" farmer and using your land very unproductively. Productivity doesn't matter to these people since they just want to hit the bare minimum requirement to get their handout. My own maternal grandfather was one such part time farmer -- though not as unproductive as some.)

The Issue of Corporate Involvement

Farmers' groups strongly oppose the acquisition of farmland by joint stock companies, claiming that it would encourage land speculation. It is not joint stock companies but farmers themselves, however, who have profited by converting half of the 2.5 million hectares of lost farmland to other uses-equivalent to the total area of rice paddies in Japan today.

You still haven't explained how corporate ownership is a solution. The problem you describe is farmland being converted - OK, pass a law stating certain areas of farmland cannot be converted to any other use. That doesn't require corporate ownership, and corporate ownership doesn't fix the problem, it makes it worse.

> OK, pass a law stating certain areas of farmland cannot be converted to any other use.

Japan already has such laws. They simply circumvent them and build more and more seven-elevens on agricultural land.

How is corporate ownership going to solve that problem? If anything I think it'd worsen it because a large corporate holder is going to be far more adept at skirting the regulations.

I haven't advocated corporate ownership, however what hkmurakami describes is an extremely accurate picture of the rural Japanese situation.

Japan has a farmland abandonment problem due to elderly farmers retiring and their children not wanting to become farmers. There are documentaries, news articles, and even segments on prime time TV shows chronicling some of these families trying to bring in an "adopted son" from cities. Such a personal commitment, naturally, is a detriment for many.　Here is some demographic data published in a general public facing article by the Ministry of Agriculture [1]

Corporate ownership allows for legal structures and arrangements that introduces flexibility into this traditionally all-or-nothing arrangement. [2]

Also, corporate ownership structures allow farm operators to pool the risk and capital requirements of a larger scale operation. Business loans that limit personal liability in the event of insolvency is greatly preferable to personal loans when undertaking expansion and improvement towards the preexisting operation.

I'd appreciate it if you could explain to me how corporate ownership of farmland by virtue of corporate ownership alone would reduce land productivity, as you have asserted. While I certainly agree that factory farming methods have created problems with antibacterial and hormonal health, greenhouse gas production, etc., I have a difficultly seeing how such abusive practices would decrease land productivity, separate from the other problems they cause.

[1] http://www.maff.go.jp/j/pr/aff/1207/spe1_02.html

[2] "Creating Jobs Through the Specified Corporation Lease Program" http://www.tokyofoundation.org/en/articles/2008/let-corporat...

Life on an island whose population has proven itself exceptionally, uniquely, mindblowingly capable of running af civilized society and carving out their own distinct and highly successful niche in the world, or rather on top of it.

They will emerge alive from this potato calamity, trust me.

Yesterday, I was in several FamilyMart and 7i locations in Tokyo, there were lots of potato chips.

I picked the wrong time to visit :X between North Korea and the potato shortage, this could be rough. :D

I was just in some FamilyMarts locations and can tell you there is no sign of a potato shortage in Tokyo.

So THAT'S why there were no potato chips at Family Mart yesterday.

The Japanese potato-chip famine?

Plenty in America. In fact, take most of ours and save us from some diabetes.

Maybe we don't want potato chips anymore.

http://www.bbc.com/news/world-middle-east-39613313

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