Comments on: Japanese Farmers and Subprime: Would the real farmer please stand up?

By: Charles Jannuzi

Charles Jannuzi — Sun, 10 Feb 2008 02:40:36 +0000

Japan Postal Savings and JA Bank are actually huge banks that try and invest account holder savings–not simply satisfy elite shareholders.

Hey, I thought American had eliminated risk back in the 1990s and post-big bang financial paradise was to follow.

I’M SHOCKED!

By: Joe

Joe — Thu, 17 Jan 2008 09:09:22 +0000

Perry,

It’s called the carry trade and may not be a good idea given the rate of appreciation of the JPY vs. the USD.

Joe

By: Perry

Perry — Wed, 12 Dec 2007 12:27:26 +0000

I was do an internet search “getting a low interest rate loan from japan” and came across your informative, humorous, and well written article.

Can you tell me if there are any sources of cheap Japanese funds available to American or Australian borrowers?

Thanks,
Perry

By: sorrydaijin

sorrydaijin — Thu, 29 Nov 2007 10:29:13 +0000

Fair enough. Another statistical question then. What is the median income of Japanese farmers? I realize that some “farmers” own great swaths of land that they lease out to others for farming or other purposes if they have the means to provide the right encouragement. Could it be these big landowners are the ones pushing up the average?

By: red

red — Mon, 26 Nov 2007 04:23:54 +0000

Actually Sorrydaijin, I beg to differ. One of the more interesting facts that I came across while doing research for this article was the richness of the Japanese farmer. In 2003 the average income of a Japanese “farmer” was 7.7 million yen - a handsome 20% premium versus the average income of the average worker. So, I hear you asking “Why do I know so many poor farmers?”. That’s the interesting bit. Of that 7.7 million yen, income from agricultural activities is a mere 1.1 million yen. The rest comes from rental income and side-jobs. Apparently more than 60% of farmers fail to sell more than 1 million yen of produce in a year!! How can you call yourself a farmer with sales of less than US$25 a day!
Sorrydaijin, I guess your friends are true farmers and didn’t work out how to lease out their unprofitable land. (You need permission from the local Agriculture Committee (nogyo iinkai, 農業委員会) in order to use land officially designated for “agircultural use” for other purposes.)
source: Nikkei Newspaper 経済教室 section on Aug 28, ‘07

By: Hills-zoku

Hills-zoku — Sat, 24 Nov 2007 04:16:56 +0000

I’ll take it one step further, Rei. I think it is part of the “ido” system they have happening at Japanese banks - and most Japanese companies. How can you expect people to make rational decisions when they know that in 2 years they are going to be transferred to another part of the company. All of their choices are going to be focused on making sure that nothing blows up in their face during their 2 year period on the job. The more time bombs you can delay until your successor comes the better. In the mean time, throw as much money as you can on the problem and hope it goes away.

By: Rei

Rei — Fri, 23 Nov 2007 17:29:53 +0000

The Asashoryu example is only bad because he was playing soccer in his birth country of Mongolia, not Korea.

Sounds to me like the old Japanese banking habit of continuing to pore money into zombie companies to prevent bankruptcy, which in the end only prolonged everyone’s pain and put them into a deeper hole. Kind of like losing at the poker table and going all in on the irrational hope to recover your loses.

By: Sotei-guy

Sotei-guy — Fri, 23 Nov 2007 14:49:20 +0000

thumbs up to the farmers. at least they are coherent with their message. The rest of the Japanese financial sector are just a laughing stock. They seem to have been investing in this sector without even realizing that they are. Did anyone hear Mitsubishi UFJ’s comments earlier this week? When questioned about their exposure to subprime apparently they wouldn’t (or couldn’t) answer. They only number that they were willing to divulge was their direct investments in subprime. no word about RMBS, ABS or other kinds of credit investments they are doing overseas. But wait, it gets better. When questioned why they had only written off 10% of their subprime exposure as a loss (vs. Sumitomo-Mitsui who had written off 70%) they said that they weren’t sure how to value the securities and so took prices off bloomberg to value them. Oh dear. Are these really bankers. It sounds like they need to take lessons from the farmers!!

By: Richmond

Richmond — Fri, 23 Nov 2007 07:08:36 +0000

Sorry about that Sorrydaijin.
Try this:
http://www.nbr.co.nz/home/column_article.asp?id=19328&cid=8&cname=

Apparently Japanese and Korean farmers are amongst the highest in the world and the US is quite low (11%) It’s higher in the EU at 32%. I guess there is a correlation between having so much land that you don’t know what to do with it (=cheaper land prices) and not needing subsidies to stay competitive. Ironically, Japan hit themselves in the foot by making Tokyo such a large city. Apparently some of the best soil (in terms of fertility) is/was in the Kanto Plain right around Tokyo.

By: sorrydaijin

sorrydaijin — Thu, 22 Nov 2007 07:44:38 +0000

Kind of veering off topic, but how does that 50% subsidy figure compare with the US and Europe? I don’t think your source link worked either Richmond. Could you post it as text?
Also, Japanese farmers usually aren’t rich estate owners with multi-oku accounts at JA Bank. The ones I know are far from getting fat on subsidies and have to work other jobs to make ends meet.