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Thousands of Dairy Farmers Seek Price Hike

August 1, 2008

By Takahiro Fukada, Japan Times, Tokyo

Aug. 1–Faced with surging feed costs, more than 2,000 dairy farmers from across the country gathered Thursday in Tokyo’s Hibiya Park to tell milk producers they will face a price hike.

In the dairy industry, milk is sold by the kilogram, and the farmers are demanding that milk companies pay at least ӚÂ¥10 more and pass the cost on to consumers.

“The environment surrounding the dairy business is beyond extremely severe,” said Yasunobu Ando, an executive of the Dairy Farmers Political Federation of Japan. “Not only can we not cover our production costs, we can’t pay our living expenses, either.”

Like other farmers, dairy farmers must care for the animals that produce their products and cannot simply go on strike like other industries, Ando said.

“We must continue to take care of cows 24 hours a day, 365 days a year,” he said. “If this price hike isn’t made, dairy farming will eventually disappear in Japan.”

Every winter, the milk manufacturers and dairy farmer organizations negotiate the prices to be paid for milk. All price changes are supposed to be reflected in the retail prices for milk and other dairy products.

The price of milk has already risen ӚÂ¥3 nationwide, pushing up the cost of other dairy products, including cheese and butter. But that’s not enough, the farmers say.

According to federation estimates, the cost of feed has jumped ӚÂ¥13.43 per kg and the cost of energy ӚÂ¥0.9 per kilogram of milk. Adding in other costs, this means farmers are paying an extra ӚÂ¥15.39 now for every kilogram of milk they produce.

The ӚÂ¥3 hike is just a fraction of what they need, the federation says.

The rally participants were eager to describe their plight.

“While feed, fuel and various other costs are rising, our revenues are getting smaller and smaller,” said Tatsuhiko Fujioka, a 75-year-old farmer from Hiroshima Prefecture who has around 100 cows. “We cannot do anything. Surely our helpless situation must be noticed by the consumers, by the people.”

It was only two years ago when dairy farmers in Hokkaido were forced to dump huge amounts of excess milk due to sluggish demand.

While acknowledging that times are tough for dairy farmers, milk manufacturers are avoiding a decision for now on whether they will help out.

Meiji Dairies Corp., the nation’s top milk company, hiked prices 4 percent, or ӚÂ¥10, in April, Meiji spokesman Takuya Hiraku said. He said Meiji would wait awhile before taking further steps.

“We fully recognize the severe situation the milk producers are facing,” Hiraku said. “We are currently examining the effect of the price hike on consumers.”

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Copyright (c) 2008, Japan Times, Tokyo

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