Situation on the Japanese Organic Market - Stagnating but with a positive outlook

Remi Bauer

 With the introduction of the Japanese Agricultural Standard (JAS) for organic agricultural and processed foods, the Japanese organic market has enjoyed an increasing interest. However, in 2006, only 0.18% of Japan’s agricultural area was organic farmland. Other countries are far ahead; for instance, Austria with 13%, Switzerland with 12% and Germany with 5% of organic farming of the entire agricultural area. Thus, many people wonder about the current situation of the organic market in Japan and potential chances for success when entering the market.


What are organic products?

The National Organic Standards Board definition of “organic” states that organic operations are “ecological production management systems that promote and enhances biodiversity, biological cycles and soil biological activity.” Thus, organic agriculture is supposed to renew, maintain and improve ecological harmony by keeping pollution of air, soil and water to a minimum. Overall, respecting nature’s cycles and preserving the environment are the main goals when farming according to organic standards.


Organic market in Japan still struggles

Over the last years many food scandals have shocked Japan’s citizens. Contaminated milk, mad cow disease, Chinese vegetables adulterated with dioxin and other food safety and false labeling scandals hit the headlines. Those repeated cases of food scandals and rising importance of environmental issues increased the conciousness of consumers about food safety and ecological awareness. Thus, an increasing popularity of natural and organic products on the Japanese market could be observed.

According to the Organic Service GmbH, a significant growth of land per organic farm is evident. Within two years, the area increased from 1.7 ha in 2004 to 6.4 ha in 2006. Nowadays, there are about 5,000 organic farms registered in Japan. Yet, the average organic farm is still rather small. In its Annual Report on Food, Agriculture and Rural Areas in Japan 2007, the Ministry of Agriculture, Forestry and Fisheries (MAFF) named promoting organic farming and other sustainable agriculture as one of its key points for biodiversity stategies. It is expected that the stronger engagement of MAFF will support the development of the organic sector overall.

In addition, measures to significantly reduce negative effects on the environment have been promoted based on the Act on the Promotion of Organic Agriculture. The Organic Agriculture Promotion Act requires the government to help domestic farmers develop organic agriculture by offering subsidies, supplies and state-of-the-art technologies. However, the law only gives a general outline. Japan’s Ministry of Agriculture, Forestry and Fisheries (MAFF), local governments and related associations cooperate on developing detailed measures to promote organic agriculture within Japan. All in all, a foundation that can lead to success has been built. However, the organic market in Japan still struggles, especially due to a lack of consumer awareness.


Insufficient recognition of Organic JAS certification

To increase consumer awareness, the Organic JAS certification was established. After some years during which it was nearly impossible to distinguish between green food − which only promotes a low use of chemical pesticides − and organic food, the Japanese government implemented a regulation with a standardized definition of organic food and stringent rules for imports and certification in 2001. JAS Standards for Organic Agricultural Products and Organic Agricultural Processed Foods is composed of two different parts. Firstly, the Quality Labeling Standard System requires all parties involved to label in accordance with the Quality Labeling Standards established by the MAFF. Secondly, the JAS Standard System labels organic goods by certified producers that were inspected according to the JAS standards developed by the MAFF. The main criterion is the nonuse of prohibited agricultural chemicals and fertilizers for at least two years before seeding or planting and troughout the production phases. Also, the JAS standards clearly forbid the use of genetically modified technology. Only foods that have been certified by a registered oganization can be sold as organic foods on the Japanese market. Unfortunately, the end consumer is still not familiar enough with the JAS certification. The insufficient recognition of the Organic JAS standard clearly poses a great problem. However, with an increasing variety of products that can be certified by JAS, the consumer awareness is also on the rise.


Organic product means expensive product

Besides the lack of consumer knowledge, the price range at which organic products are sold creates a problem. Overall, one can observe a substantial price difference between organic and conventional products. When looking at specific examples one becomes aware of the major difference. At an organic store, tofu is about 5 times more expensive than in a normal store. Also, soy sauce is about 600 Yen more expensive and milk costs more than twice as much as in an average supermarket. The same gap between average price and cost for organic goods can be observed when looking at non-food products. Shampoo is four times more expensive and make-up twice as much when shopping at an organic supermarket.

The major difference between prices is probably one of the key problems of the organic market in Japan. Not every customer is willing to spend this much money on everyday products. Thus, many people that are interested in improving ecological harmony by organic production cannot afford the products. As a result, the organic market in Japan is not using its full potential by ignoring large segments of the target groups.


Increasing support

Organic production finds support from different institutions within Japan. One of the most famous political figures who promote organic farming is Marutei Tsurunen, a Finnish born member of the Japanese House of Councilor (Upper House). In his “Prospects and Aspirations for 2008” he stated that he will continue his activities to encourage organic agriculture for the safety of food and for the planet. In December 2006, as a result of his campaigning in the area of organic agriculture a passage of a law on organic farming that was proposed by a cross-party alliance of lawmakers was approved. Another institution that is known for its efforts in promoting organic agriculture is IFOAM Japan. Its main activity is to increase the awareness of organic goods. With conferences and events, IFOAM is laying the groundwork for the further development of organic agriculture and its markets withing Japan. Also, the Japan Organic Agriculture Association (JOAA) believes in the purpose of seeking out and investing in the foundations of farming as it should be − meaning organic agriculture. Furthermore, organic food events such as BioFach Japan are playing a part in contributing to the promotion of the organic market in Japan. BioFach Japan is the one and only organic trade show in Japan and attracts many domestic and international visitors each year. Displaying the diversity of organic products and projects from all over the world, it offers a valuable insight for people interested in organic lifestyle and a platform for sharing information for those working in the organic sector. With support from these organizations, trade fairs and other supporters, it can be expected that overall consumer awareness will increase. And thus, improve the situation of the Japanese organic market.


Future prospects

It is to hope that with an increasing consumer awareness of, rising acceptance of the Organic JAS certification and further support from all sides, organic products will gain a more important position on the Japanese market. If prices drop, a bigger target group can be reached and the market share will increase. Yet, it is hard to make predictions. As Ron de Jonge once said: “Nobody can predict the future but it’s worth trying to influence the direction.” Hopefully, many people strive to promote a lifestyle that renews, maintains and improves ecological harmony and ultimately benefits all of us.