Food Focus: The Fukushima Aftermath

In May 2011, Japanese Prime Minister Naoto Kan asked for nuclear reactors at the Hamaoka plant in the Tokai region to be shut down, following evidence from Japanese scientists that there was an 80% chance an earthquake would hit the area in the next 30 years. “If there were a major accident at the Hamaoka nuclear plant, it would have an enormous impact on the entire Japanese society,” Kan told reporters in a recent televised news conference.

While there are no plans to shut down any more of Japan’s 52 nuclear plants, the country is doing all it can to protect human health and prevent any potential radiation leaks from occurring in the future. The physical damage caused by the Fukushima disaster has been enormous. The government estimated on 23 March 2011 that the cost to buildings, roads and other infrastructure was between $180bn and $320bn. Homes, infrastructure and health have been highly affected, if not destroyed, and areas being monitored closely for contamination include forests, crops, fisheries and food safety.

Japan’s exports

Some industry reports have suggested that a reduction of production and supply, plus the threat of food contamination, could decrease Japan’s food exports and increase the need for imports. Key food commodities produced in Japan include fish, seafood, rice, vegetables, fruits and nuts, dairy and poultry products. According to Japan’s Ministry of Agriculture, agricultural output totals about $70bn each year and Japan’s fisheries account for another $14bn.

According to the Congressional Research Service (CRS), it is also estimated that Japan’s food exports totalled approximately $4.7bn in 2010 with leading food exports including fish and other animal products, processed foods, bakery products and grains.

If the nuclear situation hadn’t been brought under control quickly, it is easy to see how rapidly Japan’s economy could have been affected. Even with little evidence of radiation contamination, following Fukushima, many countries around the world reduced or banned imports. India issued a total ban in April 2011, intended to last for three months, and China, Taiwan, Singapore, South Korea and the US, among others, also banned shipments of produce from certain areas in Japan.

Food exports to the US alone totalled nearly $700m in 2010, accounting for about 15% of Japan’s total food exports.In the US, the FDA regulates food imports and the USDA’s Food Safety and Inspection Service (FSIS) regulates the safety of meat and poultry. According to a CRS report, an import alert was issued for certain milk products and fresh vegetables coming from the affected prefectures (mainly leafy and non-leafy vegetables and brassicas).

Just 0.1% of food imports to the UK come from Japan, the majority being fish and shellfish, but any food with radiation levels above the legal limits are prevented from entering the country, said the UK’s Food Standards Agency.

Japan’s imports

So is Japan importing more food as a result of the country’s current situation? According to a report from Promar Consulting, Ministry of Finance data for March showed that imports of meat (up by 10%), vegetables (up 24.7%), and fruit (up by 11.2%) had increased in comparison with March 2010.

Infrastructure damage has, of course, prevented the food distribution network from working efficiently, despite impressive efforts to resume operations, such as the Great Kanto Highway in Nakabeing being fully functional just six days after the disaster.

Grain shipments have been affected by infrastructure problems, which meant they had to be re-routed to other countries, causing Japan’s imports to fall for the month. Promar Consulting also reported that the fall in soybeans could also be attributed to this factor.

Promar’s analysis shows that Japan did start to import more food products following the disaster.

“Reports out of China say that frozen vegetable companies ramped up production by as much as 30% to keep pace with the extra demand from Japan, while sources in Hong Kong cited increased exports of fruit and vegetables to Japan from Shandong and Hainan provinces as a cause of the upturn in local produce prices,” stated the report. The country’s leading supplier for imports is the US (worth over $14bn in 2010), with over half of these products being cereal grain, including corn.

Contamination control

According to the Ministry of Health, Labour and Welfare (MHLW), testing has been carried out nearly every day in order to detect if contamination exists in food products. Towards the end of March, the government restricted distribution of vegetables, such as spinach and broccoli, and milk, which had been produced in certain prefectures, but many of these restrictions were subsequently lifted. Around the world the contamination of food products was expected, although no one knew how severe the impact was going to be. “Some foods produced in Japan are likely to be contaminated by radioactive material at levels unsuitable for human consumption,” said a joint World Health Organisation, Food and Agriculture Organisation and IAEA statement.

While food companies around the world had no choice but to put their faith in the tests carried out and governmental advice, they still took additional actions so the highest precautions were taken, such as replacing Japan-imported ingredients with those from other sources, further impacting Japan’s export industry.

For example, while Kraft Foods spends ‘one tenth of one percent’ of its total procurement budget in Japan, the company took voluntary actions to ensure its production was not affected.

“We identified alternative suppliers in the event that we are unable to procure these few ingredients from Japan,” explained a Kraft Foods spokesperson. “To our knowledge, we are not receiving any materials from the impacted areas of Japan, but for ingredients that are produced, grown, processed, packaged or stored outside of the affected area in Japan and those produced before 11 March, Kraft Foods’s suppliers must provide us with validation documentation.”

Kraft is also ensuring that any ingredients produced inside the affected areas are tested using an approved laboratory to ensure they are safe for consumption as well as providing the appropriate documentation.

At the beginning of May, the US Environmental Protection Agency announced it had returned to normal levels of testing for milk, precipitation and drinking water due to consistently declining levels of radiation, and is reviewing the need to continue testing air samples with such frequency. These moves bode well for the recovery of Japanese food production and its international reputation.

Production losses and targets

While Japan’s agricultural and fisheries industries account for a small share (less than 2%) of its GDP per annum, they play an important role in the country’s economy. Damage to agricultural crops and land has been reported in several prefectures along with fisheries, fishing vessels and harbours. The five affected prefectures – Aomori, Iwate, Miyagi, Fukushima and Ibaraki – account for a significant percentage of food production. For example, 20% of marine fishery catch comes from these areas, as well as 42% of rice and 43% of pork.

Japan’s current agricultural policy plan, according to the annual report by Japan’s Ministry of Agriculture, Forestry and Fisheries on food agriculture and rural areas in Japan, is to raise self-sufficiency in food production, which currently stands at 40%, to 50% by 2020. The level of self-sufficiency varies from prefecture to prefecture, however, the five coastal prefectures most affected by the earthquake and tsunami were highly self-sufficient – with Fukushima at 85% – and it is possible that this target could now be too ambitious for the government to achieve.

According to Promar’s report, MAFF recently stated that “the country would not meet its rice production target of 7.95 million tons this year”, but also noted that it has a million tons in reserves, which will in reality reduce the need for imports to fill the supply gap.

The price of packaging

Following the disaster, products like canned goods, batteries and bottled water disappeared from supermarket shelves in a period of panic buying by Japanese consumers, which was described as ‘hysterical’ to CBS News by Tomonao Matsuo, spokesman for instant noodle maker Nissin Food. However, even when Japanese producers started to resume business almost as usual in terms of their product production, another problem has presented itself in the guise of insufficient packaging supplies.

The milk supply chain has suffered from a reduced supply of cardboard cartons – the result of Nippon Paper-Pak suspending operations at the Ibaraki Prefecture following the disaster and damage to its storage warehouse. While containers are in short supply, according to the Yomiuri Shimbun,the lack of plastic film is more serious.

Little by little the situation in Japan is improving; however, with over $300bn of damage to contend with, it is difficult to assess the full impact on food production and distribution and how long it is going to take Japan to recover. By taking careful precautions, such as closing the Hamaoka nuclear plant, the government is attempting, as far as possible, to prevent another nuclear disaster following a natural one.