TOKYO, Nov. 4 -Farmers are facing immense hardship this winter. The rising oil prices are driving up the cost of farming materials made from fuel oil and petroleum products. With the prices of fertilizers and feeds continuing to rise, farmers in Japan are facing quadruple difficulties. The overall production cost is increasing, but they can’t reflect the additional burden on the prices of agricultural products.
-Farmers trying to save crude oil as much as possible
Kunihiko Sunouchi, a 44-year-old green pepper grower in Kamisu City, Ibaraki Prefecture, filled his oil tank in mid-October, about two weeks earlier than usual. Green peppers require more precise temperature control than other vegetables, and the fuel cost to keep his 9,500-square-meter greenhouses at the same temperature in winter (from November through March) will be as high as 4 to 5 million yen. Anticipating further oil price rise, he filled his tank earlier to keep the fuel cost minimum.
“One farmer can do nothing about the crude oil price,” he said. The surging oil prices are attributable to the recovery of the global economy, which once saw severe slowdowns due to the pandemic. The price of banker A is also soaring to reach 96.5 yen per liter in September this year on nationwide average, up 27% from a year earlier. If the oil price is kept at a high level throughout the winter, Sunouchi will have to pay over 1 million yen more for the fuel when compared to what he usually spends.
“I just do whatever I can do” to keep the additional cost minimum, he said and explained how he constantly checks and cleans boilers.
-Prices of vegetables kept at low
The pain for farmers is not just the high oil cost. Just recently, Sunouchi replaced the plastic covers of some of his greenhouses, 3,000 square meters out of 9,500. However, the price of plastic materials has been rising since this spring due to the oil prices hike.
The cost of fertilizers is also heightening. The survey released by the National Federation of Agricultural Cooperative Associations (ZEN-NOH) in October this year revealed that the price of spring fertilizers rose by up to 17% than that in autumn in the previous year. The demand for fertilizer is strong due to the rise in the global grain market. Also, the sea freight is higher due to high crude oil prices.
According to the farm ministry of Japan, the price index of agricultural materials was 108.5 (2015 = 100), up 7% compared to the same month last year. On the other hand, the prices of farm products remain low. Nichino Price & Quantity Index (NOPIX), or the average price of 14 major vegetables based on the data from 7 primary regional wholesalers, fell by up to 30% in October compared to the average year. The price of green peppers is lower by 20 to 30% compared to the average year, and it isn’t easy to reflect the additional cost to the prices.