Humans Are Beating Robots to the Jobs on Japanese Farms
(Bloomberg) -- The country that brought robots to car factories looks set to stay resolutely old school in agriculture as it seeks to attract more foreign workers to replenish an aging workforce.
This month’s vote by Japan’s parliament to open the door more widely to overseas laborers confirms that despite government support and millions of dollars of investment in high-tech agriculture by companies from Kubota Corp. to Panasonic Corp., robots won’t be replacing farm workers any time soon.
For Yasuji Kakuzaki, a 67-year-old tomato producer, it’s a matter of cost.
“We don’t have the capacity to make the capital spending” to automate production, Kakuzaki said at his farm in Chiba prefecture east of Tokyo.
He welcomes the law changes and has already taken advantage of an earlier program to allow foreign workers as interns to hire five Vietnamese laborers.
Kakuzaki began with one intern 10 years ago as fieldwork was too tough for him to continue, and as he was unable to find Japanese people who were willing to work for the government-set minimum wage. He’s since more than doubled the size of his farm to about two acres.
One of the interns, Tran Thi My, started in February 2016 and works seven hours a day, six days a week for 895 yen ($8) per hour, the minimum wage in Chiba. Even at that salary, she says she’ll earn enough to buy a house in Vietnam after her three-year contract expires.
“If I’d stayed in Vietnam, it would have taken me as long as 15 years to get money for our new house,” the 29-year-old mother said.
For Kakuzaki, his annual wage bill for five workers is about 10 million yen. He earns about 50 million yen a year from his tomatoes. And while Panasonic is working on a tomato-harvesting robot, it won’t be ready until 2020.
It’s that kind of economics that makes agriculture the industry forecast to hire the most foreigners under the new rules, accepting as many as 7,300 people in the year starting in April. That’s predicted to expand to 36,500 by the year through March 2024. Other industries expected to employ foreigners include care for the elderly, restaurants and hotels.
“I’m concerned that hiring low-skilled workers from overseas as a solution to labor shortages at home may undermine Japan’s efforts for efficiency through innovation in the long term,” said Hisakazu Kato, an economics professor at Meiji University in Tokyo. “If it’s less costly to hire foreigners than to buy machinery, necessary investment won’t be done.”
The number of Japanese farmers shrank 56 percent to 1.82 million last year from 1995, according to the Agriculture Ministry. Their average age rose to 67 from 59 in the same period, as farmers retired without successors because their children preferred white-collar jobs with better pay in urban areas.
To cope with the issue, Japan’s Agriculture Ministry adopted a “smart agriculture” policy in 2014 to promote robotics and information technology to boost farm productivity. Machinery makers such as Kubota developed self-driving tractors that cost about 11 million yen and pesticide-spraying drones to automate some fieldwork. Convenience-store operator Seven-Eleven Japan will open its first automated lettuce farm next year, which cost 6 billion yen to build.
The smart-agriculture market in Japan is forecast to grow 14 percent on year to 14.7 billion yen this fiscal year, and will almost double in the next five years to 33.5 billion yen, according to the Yano Research Institute in Tokyo.
The new immigration laws, though, will mean the number of foreign workers at Japanese farms will increase fivefold in the same period. At the same time, the internship program will remain. More than 285,000 interns were employed as of the end of June, up about 4 percent from the end of 2017.
For all industries in Japan, the government estimates that almost 350,000 foreign workers will be hired in the next five years under the new laws.
Still, foreign workers aren’t a long-term solution, said Kazuki Ishida, economist at Norinchukin Research Institute in Tokyo.
“With the wage gap between Japan and other Asian nations narrowing, and as agricultural workers are the least paid among blue-collar workers in Japan, labor shortages in agriculture will probably continue,” he said.
©2018 Bloomberg L.P.