Food & Society Guest Memo: While It Won't Result in Starvation; Japan Faces Self-Created Butter Shortage None the Less

Butter spread thin in Japan

Bread is buttered on neither side as the milk product has become hard to find. There are reasons, but try telling that to the bakeries.

By Bruce Wallace, Los Angeles Times Staff Writer

May 18, 2008

TOKYO -- The food shortage that has hit Japan is announced by the glaring gap on supermarket shelves next to the margarine and the sour cream and just above the cheese.

The butter shelf is empty.

The rich yellow stuff has all but vanished from grocery stores across Japan, with the world's second-biggest economy, where fine foods are prized and aisles otherwise groan with abundance. Some stores have tried to ration the few bricks that occasionally arrive by limiting customers to a pack or two, but in most places merchants have been reduced to posting signs apologizing for having none.

Nor does anyone know when butter will be back. Japanese milk production has dropped over the last two years, leaving less available to be churned into butter.

Even bakeries that buy in bulk are finding it hard to get enough, which crimps their ability to turn out the croissants, cakes and quiches that have shouldered their way into the Japanese diet.

"We're in trouble," says Seiko Nakano, 27, who runs Levain, a small but well-known French bakery in a residential neighborhood of Tokyo, who has been told she will not receive any more butter until Tuesday, a month later than expected.

In an attempt to stretch its stock, the bakery has cut down on the number of pies it produces and cut out the extra croissants it usually bakes for the weekend rush.

"We've had to come up with some new items that use less butter, like cookies," Nakano says, standing in front of cleaned-out shelves on a weekday afternoon. "But you're talking about flavor. How can you replace butter?"

As global food shortages and ballooning prices are rocking the desperately poor from Africa to Southeast Asia, Japan's pastry problems qualify as barely more than an inconvenience. No one expects the famously controlled Japanese to riot in the refrigerated sections of supermarkets.

But the case of the disappearing butter has unnerved people here, delivering a psychological blow to shoppers utterly unaccustomed to dealing with shortages.

The butter deficit arises from a convergence of market factors that has chased hundreds of domestic dairy farmers out of business in the last two years. The sequence began when Japanese consumers began to drink less milk, a decline that coincided with a deluge of media coverage airing claims that milk is bad for your health.

Experts say consumption also has been affected by a low birthrate, which means fewer elementary school students getting a free daily carton.

The shrinking demand left the country so awash in milk two years ago that producers on the northern island of Hokkaido were dumping it down sewers. A Hokkaido beer company tried to use some of the excess by brewing a low-malt beer that was one-third milk. Called "bilk" and described as having a sweet taste, the concoction didn't catch on.

But though popularity has declined for milk as a beverage, its use in the production of cheese is expected to jump 15% this year, and demand for the less profitable butter holds steady. The result, the Japanese dairy association explains, is that there is not much milk left to make butter.

"We have plenty of milk; just no butter," dairy deliveryman Kazunari Shimakura says as he unloads cartons of milk outside Levain. Shimakura had never seen a shortage in his 20 years of delivering supplies. When he parks his truck these days, people come up to ask whether he can sell them a pack or two of butter on the side.

Last month, the government stepped in to urge the country's four largest dairy product companies to churn out more butter. And the agriculture board is moving up its scheduled purchases of butter imported from Australia and elsewhere by six months in an attempt to get some back on the shelves. Japan imports about 10% of its butter, but usually does not go to international markets until fall.

This year's butter imports are expected to hit an all-time high and are almost certain to send prices sharply higher.

Food & Society Guest Memo: Policies That Are Making Global Food Crisis Worse

Policies that are making food crisis worse
Rich, poor countries alike contribute to the problem
By SEBASTIAN MALLABY

We are now several months into the global food crisis, which is a much bigger deal than the subprime meltdown for most people in the world. Food prices have almost doubled in three years, threatening to push 100 million people into absolute poverty, undoing much of the development progress of the past few years. The hunger has triggered riots from Haiti to Egypt to Ethiopia, threatening political stability; it has conjured up a raft of protectionist policies, threatening globalization. And yet the response to this crisis from governments the world over has been lackadaisical or worse.

Start with the lunatic story of rice stockpiles in Japan. A new paper from the Center for Global Development describes how Japan's government imports rice to comply with its global trade commitments but withholds most of that rice from consumers lest they decide they prefer it to the local sort. Japanese traditionalists view the consumption of sticky, short-grained rice as a patriotic duty. So rather than letting prototypical Mrs. Watanabe corrupt her children's dietary habits, Japan stores much of its imported rice until it has become unfit for human consumption, whereupon it is sold to feed livestock.

From the perspective of Japan, stockpiling rice is a costly exercise in chauvinism, but Japan can afford that. From the world's perspective, the stockpiling is more serious. More than 3 billion people depend on rice as their daily staple, and half of them are very poor. Japan could save many of them from hunger if it released its stocks.

The scandal is not just Japanese, however. For Japan to sell its rice outside its borders, it needs permission from the countries that supplied it -- the United States, Thailand and Vietnam.

A bit of U.S. leadership could deliver that permission easily, but the Bush administration is apparently worried about a backlash from American rice wholesalers, who see no downside in high prices, thank you very much.

Congress passed a farm bill last week with thunderous bipartisan support. The bill includes reasonable subsidies for low-income Americans hit by high food prices, but it also sprays money at farmers who already earn more than the average taxpayer and it contains shockingly little for the world's poor. Congress is considering a separate bill that would boost international food aid more substantially. But that measure has been met with shameful indifference by lawmakers and consequently has stalled.

Congress won't even act on a common sense proposal from the Bush administration that food aid be reformed. If the United States bought some of the food that it donates from other countries, it could get aid to the needy faster and more cheaply. But that would upset American farmers and shipping interests, as a new Council on Foreign Relations paper emphasizes. The president's proposal has few takers on the Hill.

The Europeans, for their part, have their own way of entrenching hunger. Just as Japan is wedded to its rice culture, Europe is irrationally hostile to genetically modified food. Study after study has found no danger in seeds that have been manipulated to grow better, withstand insects or survive in arid soil. But the Europeans still feel squeamish, and their hang-up deters Africans from taking advantage of crop science lest their exports be barred from European markets. Again, a peccadillo that to Europeans is affordable starves people in the poor world.

Finally, poor countries themselves have made things worse. Panicked at the prospect of food riots, countries with crop surpluses have forbidden exports in an attempt to bottle up supply and keep prices down. More than 40 countries have imposed some kind of export restraint, with the result that countries suffering food deficits have seen prices hit the roof. This nationalized hoarding is frustrating international relief efforts. The World Food Program has sought to buy food from countries with surpluses, such as Pakistan, to ship to desperate neighbors such as Afghanistan. But Pakistan drags its feet about selling.

Part of the solution to the food crisis, as Oxford economist Paul Collier has written, is to promote large-scale commercial agriculture in the poor world. But for that to happen, investors have to know that there will be a market for their exports. They won't risk their money if Congress is going to subsidize their American competitors. They won't risk their money if European prejudice is going to prevent them from using the best seeds that scientists offer.

And they won't risk their money if the governments of developing countries short-circuit their profits with crazy export bans.

In short, the governments of the world are conspiring to undermine farming in developing countries. Do they mean to inflict hunger on tens of millions of people?

Natural~Specialty Foods Memo Editor's Note: Mr. Mallaby is a fellow for International Economics with the Council on Foreign Relations. The opinions expressed in Mr. Mallaby's essay are his. The essay first appeared in the Washington Post.