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Bureaucratic bungling behind butter shortage

56 Comments

"I often have toast for breakfast, and it's a problem if there's no butter," a 40-ish homemaker tells Friday (June 19). "My son in primary school often complains when I can't serve it to him."

These days it's become common in Japanese supermarkets to see signs posted that read "Butter limited to one item per customer." The problem first surfaced in 2013, and butter has gradually vanished from store shelves.

For the nation's confectionery manufacturers, though, it's becoming a matter of life and death.

"To make shortbread, we use about 250 kilograms of butter a month," says Kazufumi Hondo, president of Hokkaido-based confectioner Paris 16e. "The year before last, we sold a 450 gram loaf for 480 yen. Now it's 580 yen. To make up for the butter shortfall, from last year we began producing our own from dairy cream."

What's behind the butter shortage? Friday blames it on the Ministry of Agriculture, Forestry and Fisheries and a group called the Agriculture & Livestock Industries Corporation (Nochiku Sangyo Shinko Kiko), which is largely made up of "amakudari" -- retired bureaucrats on their second careers -- which has been working at expanding certain vested interests.

"Three 'inane plans" being pushed by the Agriculture Ministry have caused the supply and demand to collapse," says Yoshihiro Asakawa, a journalist covering agribusiness.

The first of the three "inane plans" was the subsidy system for processed dairy products, which at the moment is only given to producers in Hokkaido. Dairy farmers receive a 12.9 yen subsidy for each kilogram of raw milk used in the making of butter. As Hokkaido produces 80% of Japan's butter, Asakawa explains, the policy has led to an over-concentration in one part of the country. So if Hokkaido dairy production is even slightly destabilized, it will result in a drop in butter production.

The second problem, according to Asakawa, stems from the subsidies for cheese. As Japan keeps importing more cheese from abroad, the ministry has shown stubborn determination to develop its domestic industry, offering a subsidy of 15.53 yen per kilogram of raw milk used in the making of cheese. And in addition, half the cost of building production plants is covered by government subsidies.

The Agriculture & Livestock Industries Corporation has been encouraging production of cheese to the tune of 31 billion yen in government subsidies. After the butter shortage became severe last year, the bureaucrats tried to backtrack and persuade the cheese makers to shift their raw materials to address the butter shortfall, but other bureaucrats told them not to bother, claiming if consumers could get their hands on more butter they'd hoard it.

As opposed to production of 64,800 tons of butter this year, total demand is expected to reach 74,700 tons, leaving the shortfall to be made up by imports. But then the Agriculture & Livestock Industries Corporation -- which is the sole entity authorized to import butter -- stepped in with "inane plan" number 3. This involves piling an additional markup on top of the existing 35% import duty (which gets tacked on to imports above 600 tons per year). The end result is a fourfold rise in the retail price of a kilogram of butter, from about 500 yen to 2,000 yen. Thus for all intents and purposes pricing it out of the market.

Friday notes that of the 10 directors of the Agriculture & Livestock Industries Corporation, five are former Agriculture Ministry bureaucrats, and one is an "old boy" from the Ministry of Foreign Affairs. The corporation's director pulls in a cozy annual salary of around 16.72 million yen. Enough, the magazine notes bitterly, to let him live off the fat of the land, while the hoi polloi are obliged to make do with less... and less.

© Japan Today

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56 Comments
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Incentives and protectionism are the most notable pillars of an artificial economy, one that is does not need to compete nor better itself. Free market would make these industries suffer for some time but the ones that survived would then be apt not only to serve the national market but also the global market. Right now they are just "milking" the taxpayers.

13 ( +13 / -0 )

Amakudari is probably the biggest internal threat to Japan and it is well past time that this pernicious practice was exposed and publicized. The general public seem mostly to regard it as just being a little unfair rather than the totally distorting waste and influence on the economy and regulatory climate that it is.

21 ( +22 / -1 )

Good article, but what will anyone do about the situation? This shouldn't be happening in an advanced industrialized country. And what's really shocking to me is it's becoming an annual problem.

11 ( +12 / -1 )

other bureaucrats told them not to bother, claiming if consumers could get their hands on more butter they’d hoard it.

Well maybe if there wasn't such a constant butter shortage then consumers wouldn't feel the need to hoard butter. Really wish the consumers would stand up and do something about this dairy industry monopoly.

7 ( +7 / -0 )

and people still want to protect these welfare industries, the beaurocrats and there golden parachutes are in bed with JA, and yet its the Japanese people that have to pay for it in much higher prices or not get any variety at the supermarket. Businesses and consumers are the ones that suffer. enough of this pathetic BS the sooner the TPP is here the better. affordable quality dairy products from NZ please asap.

9 ( +10 / -1 )

cue teeth sucking Iyaa, shouganai na~

Alternatively, beloved citizens of Japan, wake the f%&$ up from your apathetic stupor and actually do something about the moronic geriatrics that are ruining your country with each passing day

8 ( +11 / -3 )

Reading an article like this, reading what the problems are, and reading the comments of people who are in charge just makes me feel that Japan is utterly and totally doomed to collapse in a way that will make Greece look like a party. The incompetance and stupidity of the people in charge in Japan makes politicians like George W Bush and Newt Gingrich look like articulate veteran politicians.

10 ( +12 / -2 )

Unfortunately nothing new here. Anybody who follows Japanese agricultural policy with all its incentives, price supports, subsidies, dictates, guidance memorandum, etc., will tell you that the system is fundamentally broken. Indeed, off the top of my head I can remember at least two other "butter crises" in the last 20 years. To butter you can also add corn, MBM (meat and bone meal - which brought mad cow to Japan), beef issues, and periodic rice and wheat shortfalls, etc. Moreover, this story is only half the problem. The other issue is that when Japan experiences shortfalls is looks to make them up to such an extent that it influences certain commodities markets.

6 ( +6 / -0 )

Remove all subsidies. Those are my taxes being used for needless and wasteful expenditure when Japan's pension and social support systems are teetering on the brink of disaster.

Europe has a massive butter over-production and internal EU regulations limit sale of butter within Europe, but a market in Japan would be welcome. I look forward to seeing superb Kerry Gold butter and amazing French cheeses in Japan - rather than the tasteless stuff they sell now.

And yes, it will mean COMPETITION for Japanese farmers. Oh dear. Whatever will they do with all that land and those cows? ... they could try treating it like a business instead of a hobby for a change.

13 ( +14 / -1 )

Why does the EU have limits on sales of butter within Europe?

0 ( +4 / -4 )

The butter barons of Japan have worked very hard to get where they are. I see no problem that they are in positions that are comfortable. Butter has traditionally been a luxury food item in Japan since the Mejii period and it has largely been the wealthy that are privvy to it. I think us commoners should be more appreciative of all the excellent margarines, blended spreads and other "near butters" that are available to us!

I'm sure that subsidies encourage farmers to work harder and create the top quality dairy items that Japan is world renown for. For example, the string cheese here is second to none!

Keep things the way they are and I'm sure that this will eventually solve the problem!

-1 ( +10 / -11 )

This is what happens when one outfit is given a chokehold on the flow of raw materials. Confectionary companies should be able to order their own materials over the internet and import them duty-free as long as they show evidence they used it all in house and didn't sell to third parties.

3 ( +3 / -0 )

“Three ‘inane plans” being pushed by the Agriculture Ministry have caused the supply and demand to collapse,” says Yoshihiro Asakawa, journalist covering agribusiness.

The demand hasn't collapsed, just the supply, thus the shortage. Economics 101.

4 ( +4 / -0 )

A general rule of thumb, according to hundreds of years of history, as economies swirl further and further in the toilet, protectionism is the name of the game.

Expect crap like this to continue, which means more shortages will occur.

2 ( +3 / -1 )

Ridiculous. This is something one would expect to happen behind the iron curtain in the 1970,s not in an "advanced" economy in 2015. Amakudari leaches responsible for this and a myriad of other similar debacles should be thrown out but hey...shooganai naaa attitude by the majority of apathetic voting public that will duly re-elect the same LDP dinosaurs next time will ensure it doesnt change.

3 ( +4 / -1 )

There is an abundance of butter and cheese in the USA. It is free to schools and low income people. Import some butter and stop protecting the Japanese dairy production. How about one kilo of butter/cheese for every kilo of car exported to the USA. Real fair trade.

5 ( +5 / -0 )

It's a question of bread and butter...so what's the situation of bread? Plenty of supply but no demand due to high prices.

1 ( +1 / -0 )

"“Three ‘inane plans” being pushed by the Agriculture Ministry have caused the supply and demand to collapse,” says Yoshihiro Asakawa, a journalist covering agribusiness."

Weren't there a few posters on here claiming Japan is not corrupt at all and only China is? This is the kind of example of corruption and protectionism of vested interests that is voted into office and the job constantly, and accepted with a "shouganai, ne!" all too often here. Why the Japanese allow it is beyond me.

1 ( +4 / -3 )

This demonstrates clearly just why Japan is in so much trouble economically, culturally and socially.

4 ( +7 / -3 )

Friday blames it on the Ministry of Agriculture, Forestry and Fisheries and a group called the Agriculture & Livestock Industries Corporation (Nochiku Sangyo Shinko Kiko), which is largely made up of “amakudari”—retired bureaucrats on their second careers—which has been working at expanding certain vested interests.

Honestly, this is just the latest manifestation of the broken Japan Inc. model. Japanese citizens have allowed bureaucrats, and, even worse, ex-bureaucrats, to decide way too many things about their lives and the economy. Same disease evident in the Fukushima disaster, where bureaucrats were much too cozy with the nuclear power industry. But, as usual, the citizens will just shrug their shoulders, mutter "shikata go nai", and do with no butter, or ridiculously priced butter, in order to maintain "order". Sad.

5 ( +9 / -4 )

Kick the butter merchants to the curb.

http://www.consumerreports.org/cro/2014/01/the-healthiest-spread-for-your-bread/index.htm

The best healthy butter substitutes

Butter alternatives let you cut saturated fat but not flavor - January 2014

-4 ( +1 / -5 )

The Japanese economy is based on mercantilism. Ridiculous in this day and age.

0 ( +3 / -3 )

Apart from the butter sortage, this first comment still amazes me:

“My son in primary school often complains when I can’t serve it to him.”

3 ( +4 / -1 )

Fire these bureaucrats and don't replace them. They are failing to do their jobs, yet I'm sure they will all be receiving large bonuses this month. For what? For being completely and utterly useless? Copying North Korea's controlled economy will lead to the same results: shortages.

I'm surprised people put up with this nonsense. How hopeless do these bureaucrats have to be before somebody speaks out?

8 ( +8 / -0 )

I don't understand the cheese explanation : when you make cheese, you usually have to partially skim the raw milk you use and find a way to value the extra-cream you get. To make butter is the common solution.

2 ( +2 / -0 )

For example, the string cheese here is second to none!* that statement alone proves you know very little of what a quality product is, try the huge variety of cheese throughtout europe and the quality products that japan doesnt even come close on. the average Japanese hasnt a clue what myriad of excellent dairy products are available outside Japan
10 ( +11 / -1 )

I think far too many posters downvote and critique crustpunker when it is pretty blatantly obvious he is constantly posting with a severe case of "tongue in cheek."

In other words, take everything he says, and reverse it, and you have what he's really trying to say. It's called irony.

3 ( +3 / -0 )

Japanese do not want stinky cheeses. I do.

Time to contact my base friends.

1 ( +2 / -1 )

cue teeth sucking Iyaa, shouganai na~ Alternatively, beloved citizens of Japan, wake the f%&$ up from your apathetic stupor and actually do something about the moronic geriatrics that are ruining your country with each passing day

The majority on this forum don't have a vote and can do little about it other than buying their own herd of Holstein Friesian

1 ( +1 / -0 )

Why is this allowed? This is pure corruption, how can Japan series look the international community in the face and tell them China has issues?

3 ( +3 / -0 )

Margarine, anyone?

-7 ( +0 / -7 )

Margarine, anyone?

There are alternatives to butter but no substitutes. Butter used in moderation, a rule that goes for all foods, is a healthy product. Margarine is a super pro-aging terrorist, a special doomsday threat. Government agencies, relevant ministries are responsible for securing a sufficient supply of, in this case, butter. The EU is afloat in it and would be, my guess, most happy to supply it to Japan. A country that maintains god knows how many tons of rice in storage would have no problem to stock enough butter. Depriving consumers smells of collusion and borders on the criminal. Creating a shortage is professional negligence, punishable by law. Favoring a segment of local industry by knowingly mismanaging market demands is criminal. Keeping responsible bureaucrats in office is, well, stupid and irresponsible.

7 ( +7 / -0 )

Haven't used butter in years BUT it is the collusion, manipulation and the amakudari that gets my goat.

2 ( +2 / -0 )

Costco has no butter shortages, buy there in bulk no problems.

1 ( +2 / -1 )

O-MO-TE-NA-SHI may be the catchphrase for Japanese tourism, but it's clearly A-MA-KU-DA-RI for the Japanese business world. It's embarrassing, really.

5 ( +5 / -0 )

35 % tax and, Yen 2.000 for 1kg of butter and 1 million Yen salary (+) a month for the "fat rats".

Now, something must be wrong with this calculation! "A-MA-KU-DA-RI-MO-TAI-NAI"!!

1 ( +1 / -0 )

@wtf Japan

I'm sorry but, I have to disagree, please let me share an anecdote

I had a wonderful piece of string cheese whilst standing in a cramped train today. The texture was perfect, like pvc so it didn't get my hands all greasy.

There was no smell to disceren at all which I like because the smell of cheese can be too much sometimes to eat in public.

The chewey, rubbery texture ensured that I would still be picking bits out from between my teeth the entire 45 min. train ride which was great because it gave me something to do.

It was a real treat and I can't wait to eat another one on the way home today from the nuclear power plant where I work.

A cheese lover's paradise here really!

6 ( +8 / -2 )

So the problem is clear, the solution is clear, and only need Abe to pull out that third arrow and shoot it at those terds.

I hate margarine and really rue any butter shortage.

3 ( +3 / -0 )

" Friday notes that of the 10 directors of the Agriculture & Livestock Industries Corporation, five are former Agriculture Ministry bureaucrats, and one is an “old boy” from the Ministry of Foreign Affairs. The corporation’s director pulls in a cozy annual salary of around 16.72 million yen. Enough, the magazine notes bitterly, to let him live off the fat of the land, while the hoi polloi are obliged to make do with less… and less. "

LOL, right out of a Kafka novel. Now where is Abe with his famour arrows? Nowhere to be seen, it seems.

0 ( +1 / -1 )

Stupidest, most badly-managed situation I've encountered in a long time. However, since I refuse to eat anything bu butter, I always buy one whenever I go shopping, and always have two in my fridge, so I'm never short.

3 ( +3 / -0 )

Its either cheese or butter, never rice....

1 ( +1 / -0 )

gogogo: Costco had a butter shortage a number of months ago. I know because I finally had to buy butter at Ito Yokado.

1 ( +1 / -0 )

butter can also be used as a sekshual lubricant, just saying,,,

0 ( +0 / -0 )

Another SNOW job. Get your mitts outta my butter, ministers.

Not only is the Costco butter cheaper and more available, it's a higher-quality product.

2 ( +2 / -0 )

Is it better, Nessie? I bought one of those bricks of butter at Costco once and was less than impressed, however, it could have been how it was handled...it had a quarter inch of oxidation all around the outside like butter that's been in the fridge way too long. I didn't buy it again. Which brand is good?

-1 ( +0 / -1 )

Your best butter is from grass fed cows ==> Kerry Gold (Ireland) or Australian. The only thing better than that is maybe a A2 milk cow that can now be found in the miniature size (like a large dog and you get a gallon+ of milk a day).

2 ( +2 / -0 )

Kerry Gold is fantastic. I freeze it ans bring it home from the U.S.

1 ( +2 / -1 )

Costco got into price gouging immediately after the 1st butter shortage. I watched it happen.

Try substituting a rich olive oil on toast with some garam masala and be healthier.

1 ( +1 / -0 )

Try substituting a rich olive oil on toast with some garam masala

Is that lassen gorelai?

0 ( +0 / -0 )

Any of you looking for a cheese buffet -all you can eat top quality cheese,butter and whole meal bread will be in for a treat in Kobe in July.....

0 ( +0 / -0 )

Just more proof that Japan isn't really a "developed" country. It's really similar to Greece, South Korea, Italy and perhaps certain US states like Detroit and other "Underdeveloped" places/economies.

-2 ( +1 / -3 )

The joys of being a vegan!

presto:

Margarine is a super pro-aging terrorist, a special doomsday threat.

Yeah, well, if you're looking at margarine sold in Japan. But other more well-informed countries sell margarine which don't have trans-fat or hydrogenated oils.

Stanley:

Try substituting a rich olive oil on toast with some garam masala and be healthier.

Good idea. Some other ideas are nut butters for sweet toast (none of the usual crap sold here which HAS to have hydrogenated fats again or sugar - just 100% nuts - nuts ALREADY have oils!). Or mashed avocado with other vegetables, or home-made humous for savory toasts. Last time I went back to my home country, I got 1kg tubs of pure peanut butter and cashew nut butter. The former costs the same price as one of those small jars in Japan. The latter, I can't even find in Japan! Rather like dairy butter, I guess!!!

-1 ( +0 / -1 )

Hi, Hima,

it had a quarter inch of oxidation all around the outside like butter that's been in the fridge way too long. I didn't buy it again. Which brand is good?

Are you sure it wasn't just the yellow color that threw you off? The color of butter depends on the carotene content of the grass the cows eat. Yellower should be better. I prefer Costco butter to Snow Brand butter. It seems there's more flavor and less salt. They really salt the heck out of butter in Japan.

1 ( +1 / -0 )

HA! The truth is out. The rampant cronyism & corruption here is brimging the country to its knees.

@paulinusa

This shouldn't be happening in an advanced industrialized country. And what's really shocking to me is it's becoming an annual problem.

Not sure how long you've been here, but one soon realises that Japan is anything but modern or advanced. Far from it.

0 ( +0 / -0 )

Yes, Nessie. It was clear and waxy. Scraped it off and there was normal color underneath. I thought it might have gotten warm somewhere in transport/stocking.

I'll give it another try.

0 ( +0 / -0 )

How we can trust a dairy industry where some product classified as "natural cheese" has MSG in it?

0 ( +0 / -0 )

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