Japanese Strategies in the Global Grain Trade Since the 2007–8 Food Crisis

The Journal of Peasant Studies

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National food security through corporate globalization: Japanese strategies in the global grain trade since the 2007–8 food crisis

Derek Hall

To cite this article: Derek Hall (2019): National food security through corporate globalization: Japanese strategies in the global grain trade since the 2007–8 food crisis, The Journal of Peasant Studies, DOI: 10.1080/03066150.2019.1615459 To link to this article: https://doi.org/10.1080/03066150.2019.1615459

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Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=fjps20 THE JOURNAL OF PEASANT STUDIES https://doi.org/10.1080/03066150.2019.1615459

National food security through corporate globalization: Japanese strategies in the global grain trade since the 2007–8 food crisis Derek Hall Department of Political Science and Balsillie School of International Aﬀairs, Wilfrid Laurier University, Waterloo, Canada

ABSTRACT KEYWORDS English-language research on the contemporary global grain trade China; food security; grain says little about Japan. Japanese ﬁrms, however, have made trade; Japan; land grab; sogo extensive overseas investments in grain production and trading shosha since 2007, becoming major players in the soya trade between North and South America and China, and the Japanese state has developed policies promoting ‘foreign agricultural investment’ in grains. This paper documents and explains these developments by exploring the legacies of earlier Japanese grain trade moves, examining three visions of the relationship between foreign agricultural investment and Japan’s food security, and arguing that conceptualizations of Japan as an ‘Asian land grabber’ ﬁt awkwardly with the empirical record.

If we don’t encroach deeply into the Chinese market and also supply [grain] to China, we can’t cheaply and stably supply Japan. - Okada Daisuke, Food Division Head, Marubeni (Nikkei Business 2010, 38)

Introduction The global grain trade has seen dramatic developments since 2000. While demand for rice, wheat, and especially corn and soya1 has risen against a background of world population growth, dietary change in rapidly-growing emerging economies, and biofuels production, supply concerns have been driven by climate change, questions of access to land and water, worries about yield growth, financial speculation, and export restrictions by producing countries. The established ABCD grain traders – Archer Daniels Midland (ADM), Bunge, Cargill, and Louis Dreyfus – have sought to expand their dominance through vertical and horizontal integration and financialization. Together with transnational agrochemical companies, these firms came to control much of the (pre-existing) extraordinary expansion of South American soya agriculture that has helped supply China’s exploding demand (Wesz 2016). Newer and/or smaller grain traders like Glencore Xstrata, Noble, and Nidera have taken on the ABCDs, however, and China’s state-owned

CONTACT Derek Hall [email protected] Department of Political Science and Balsillie School of International Affairs, Wilfrid Laurier University, 75 University Ave. W., Waterloo, ON, Canada N2L 3C5 1Soya is an oilseed, but I follow convention in treating soybeans as part of the grain trade. © 2019 Informa UK Limited, trading as Taylor & Francis Group 2 D. HALL trader COFCO threw down the gauntlet when it took control of Noble’s agricultural division and Nidera in 2014. Finally, the 2007–8 food price crisis sparked new (though often abortive) state and corporate interest in direct involvement in (or ‘land grabs’ for) overseas grain farming, including on the part of food-import-dependent states in the Middle East and North Africa (MENA) and Asia. Research on the grain trade, land grabbing, and South American soya expansion has helped explain how and by whom grain is grown, transported and sold. It has not, however, said much about Japan. While foreign investments in grain production and trading by Japan’s sōgō shōsha (general trading companies, hereafter shōsha) have been noted and Japan is sometimes called an Asian food security land grabber, references are usually brief (though see Sano 2016; Oliveira 2017; Hiraga 2018, and below). More has been written about the Brazilian-Japanese-Mozambican ProSAVANA project’s attempts to increase agricultural investment (including in corn and soybeans) in Mozambique (Funada-Classen 2013; Okada 2014; Shankland and Gonçalves 2016). There is, though, no integrated account of Japan’s place in the contemporary grain trade. This is a problem. Japan has been a major grain importer throughout the post-World War II era, and was the world’s biggest importer of corn until 2016–17 (USDA FAS 2018, 30). Japanese firms are also important grain traders. My research shows that the biggest shōsha (Mitsubishi Corp., Sumitomo Corp., Mitsui & Co., Itochu, Marubeni, Toyota Tsusho, and Sojitz)2 and Zen-Noh (Japan’s National Federation of Agricultural Cooperative Associations) have since 2007 undertaken at least 70 international investments in grain production and trading. These investments, which add up to many billions of dollars, are largely in the United States, Brazil, Argentina, and Australia on the production/ export side, and China on the import side. While some shōsha have entered overseas farming (especially in Brazil), most investments have been in existing origination/collecting, storage, distribution, logistics, and processing businesses. The biggest is Marubeni’s 2013 acquisition of US grain trader Gavilon for roughly $4.6 billion including debt, a deal that shot the firms’ combined handling volume into third place globally (Wakita 2013; Parker 2016). Marubeni has ranked in some recent years as the second-largest exporter of Brazilian soybeans and the largest soybean supplier to China (Topham and Niu 2014; Oliveira 2017, 317; Reuters 2018). The Japanese state, too, has developed policy tools for supporting private Japanese ‘foreign agricultural investment’ (kaigai nōgyō tōshi, FAI) in, especially, corn and soya, including ‘Guidelines on the Promotion of Foreign Investment for Food Security’ (MAFF 2011) that are almost unreported in English, and at least eight large commitments of loans, insurance or equity supporting Japanese corporate FAI and grain exports to Japan and elsewhere. This paper seeks to document and explain Japanese state and corporate strategies and investments in the post-2007 grain trade. The scope of Japanese activities means documentation is important in itself. My explanations aim to account for the Japanese story and deepen existing analyses of the foreign investor side of the land rush and grain trade (Koyama 2013; Woertz 2013; Lee, Jung, and Kim 2014; Okada 2014;Brautigam2015;Goetz2015; Keene et al. 2015; Muller 2016; Oliveira 2017;Hiraga2018). I make two central arguments. The first emphasizes the legacies of pre-2007 Japanese efforts to develop new grain-supplying areas and

2While the first three firms listed share their names with other Japanese companies, for simplicity’s sake I refer to them as Mitsubishi, Sumitomo and Mitsui. THE JOURNAL OF PEASANT STUDIES 3 increase control over imports from existing suppliers (particularly the US) in response to extreme import dependence for wheat, corn and soybeans. These legacies meant that by 2007 Japanese state and private actors (especially the shōsha,massive,multidimensional firms unique to Japan) had extensive capabilities, experience and options that could be deployed in response to the grain trade’s changing conditions. The second argument is that post-2007 moves have been shaped by a set of visions, strategies and anxieties regarding the risks and opportunities of foreign investment in grain production and trading and the role that investment can play in Japan’s food security (and in corporate profits). These have sometimes been in tension with one another, and some are surprising from a land rush literature perspective. The shōsha are, for instance, very cautious about grain farming. Mitsui, Sojitz and Mitsubishi have taken it up under quite specific circumstances, while Marubeni has explicitly eschewed it. Many shōsha investments are in the United States, a country rarely seen as a target of Asian/MENA investments. State policy and corporate strategy have also targeted production for local markets and sales to third countries at least as much as exports to Japan – a puzzling feature of efforts often aimed explicitly at securing food supplies. Diverse approaches to and justifications for Japan’s foreign agricultural investments can be understood in terms of three visions of the relationship between Japanese FAI and Japan’s food security. The ‘global supply’ vision sees any increase in world grain production as making Japan more food-secure; the ‘direct supply’ vision tries to nail down specific grain sources for Japan; and the ‘economies of scale’ vision requires that Japan’s firms sell huge volumes of grain to third countries (especially China) to stay competitive enough to supply Japan. While ‘Japan’ has pursued all three visions at once, I argue that the ‘economies of scale’ vision does most to illuminate Japanese FAI. The shōsha’s critical role in all three visions motivates this paper’s title. My analysis draws on many hundreds of sources. The Japanese primary documents include government reports; shōsha press releases, reports, and other writings; coverage in industry publications and the media; and the work of activists, scholars and civil society groups. I draw especially on Japanese state and corporate actors’ own accounts of their activities. Translations from these sources are my own. I also interviewed and/or had informal discussions with 15 Japanese academics, corporate representatives, government officials and activists. The analysis has, of course, some limitations. I cover only grains, and focus on corn, soya and wheat; I analyze Japan’s place in the broader ‘land rush’ in Hall (n.d.). I have not ground-truthed the investments, though I try to triangulate by using reports from multiple sources and years. The methodological problems of researching ‘land grabs’ (Edelman 2013; Oya 2013) may not apply as sharply to some aspects of the study of investments in existing grain trading firms and infrastructure; there is no question, for instance, that Marubeni bought Gavilon. It is possible, however, that some investments in origination/collecting that my sources led me to code as not including direct land acquisitions do have a land component. I have also doubtless missed some investments. The empirical coverage largely stops in early 2017. Finally, my sources do not say enough about the details of Japan’s origination investments and their relationships with farmers (especially around financing, seeds, and agrochemicals sales) to permit an analysis in terms of forms of ‘control grabbing’ that go beyond direct land acquisitions (Borras et al. 2012), and such an analysis would likely require further specification of the control grabbing concept with respect to storage, transportation, and export infrastructure. 4 D. HALL

The paper is organized as follows. The first section below surveys the post-2000 global grain trade and trends in Japan’s postwar grain imports. The second discusses conceptions of Japan in the land grab literature, and the third outlines the three visions. The fourth discusses the political economy and legacies of Japan’s FAI in grains before 2007. The fifth deals with post-2007 Japanese state policies supporting ‘foreign investment for food security’ and the visions and tensions that ran through them. The sixth and longest section covers shōsha/Zen-Noh overseas moves since 2007, highlighting their modalities and the statements of corporate and state representatives about the logics behind them. The final empirical section discusses Marubeni’s grain strategy and its articulation of what I call the ‘economies of scale’ vision. In the conclusion I return to my arguments about legacies and the influence of the visions.

The global grain trade since 2000, and trends in Japan’s imports The grain trade is massive and growing (USDA FAS 2017, 2018). The overwhelming demand-side development since 2000 has been skyrocketing Chinese soybean imports, which in 2016/17 were 91 million tons (almost 2/3 of the world total) (USDA FAS 2017, 17). The ABCDs have long dominated the wheat, corn and soya trades. These firms (on their own and in joint ventures or partnerships) undertake upstream and downstream activities including input provision, land ownership, farming, processing and crushing, meat production, storage, and management of transportation infrastructure. They have pursued consolidation through mergers and acquisitions, and thrown themselves into financializing grain trading and farming (Murphy, Burch, and Clapp 2012; Salerno 2017). The ABCDs are not without competitors. Swiss commodities trader Glencore intensified its involvement in grain trading when it bought a Canadian grain company in 2012 (Clapp 2015, 128–29). Noble, a Hong Kong-based company established in 1987, has sought to follow an ABCD model (McMahon 2014, 169). COFCO acquired controlling stakes in the agricultural division of Noble and the older grain trader Nidera in 2014 (Clapp 2015, 128). Matthew Gaudreau (2019, 15) argues that ‘[t]he channels for [Chinese] soybean imports are being reclaimed from global grain traders by actors from the PRC, through investment abroad and international corporate acquisitions’ (see also Oliveira 2017). Some discussions of newer/smaller grain trade players mention the shōsha (Murphy, Burch, and Clapp 2012, 9, 40, 43; McMahon 2014, 170–171), though others omit them (Clapp 2015; Turzi 2017; Winders 2017, 7). Midori Hiraga’s(2018) historical analysis of the shōsha’s role in the global agri-food system highlights some key aspects of their recent moves in the soya trade in particular. No world region is more important to the growth of, and competition over, grain production and exports than South America. The continent’s soya production volume passed North America’s around 2002, and in 2015 Brazil and Argentina’s 51 million hectares of soya produced 157 million tons of beans (almost 50% of global production) and supplied 52% of world exports (Oliveira and Hecht 2016, 255, 258). In the 1990s the ABCDs and their allied agrochemical companies came to dominate the South American soya value chain through mergers and acquisitions and control over inputs (especially genetically modified seeds and glyphosate), crushing, storage and transportation infrastructure, and financing (Leguizamón 2016, 317–319; Oliveira and Hecht 2016, 254–256; Wesz 2016; Turzi 2017). ABCD control may have peaked, THE JOURNAL OF PEASANT STUDIES 5

Figure 1. Japan’s imports of Maize, Soybeans, Soybean Cake, Wheat and Sorghum (millions of tons), 1961–2016. Source: FAOSTAT however (Leguizamón 2016, 317). A 2015 analysis found that Asian traders such as COFCO (including its stakes in Noble and Nidera) and the shōsha purchased 45% of Brazil’s 2015 exports of soybeans, soybean meal and corn while the ABCDs took only 37% (Bonato 2016). The scholarly literature has noted shōsha participation in South American soya production and trade (Warner 2015, 1181; Leguizamón 2016, 322; Oliveira and Hecht 2016, 264; Oliveira and Schneider 2016, 173, 187; Wesz 2016, 307; Wilkinson, Wesz, and Lopane 2016, 743–744). To my knowledge, however, the only detailed analyses in English are a working paper by Sayaka Sano (2016)3 and Gustavo Oliveira’s PhD dissertation (2017), both of which document and theorize shōsha investments in Brazil. The shifts of the last two decades, and especially China’s vast demand, have reconﬁ- gured Japan’s place in world grain imports. Japan’s postwar ‘economic miracle’ decades brought rising incomes and rapid dietary westernization. Expanding bread and meat consumption meant soaring demand for wheat for people and feedgrains for livestock, demand which Japan’s arable land could not supply (McMichael 2000, 412). The resultant import surge (see Figure 1) saw Japan buying 13% of world grain exports by the mid-1970s and becoming the world’s largest feedgrains importer (Hillman and Rothenberg 1988, 43; Ufkes 1993, 221). Japan became highly dependent on imports from the US, which in 1976

3Japanese names in this paper are presented with the family name last. 6 D. HALL supplied 92, 74 and 56% of Japan’s imported soybeans, corn and wheat respectively (Ozawa 1979, 160). Wheat imports stabilized (and sorghum started falling) in the late 1970s, and corn and soybeans ﬂattened out in the late 1980s (though soycake imports started rising). Meat imports have increasingly substituted for those of feedgrains since the 1980s (Ufkes 1993; McMichael 2000, 413), and Japan is the world’s largest meat importer by value (Feldhoﬀ 2014,79–80). The post-2007 period saw further change (see Figures 1–4). Corn and soybean imports have fallen substantially, even soycake is down, and sorghum is mostly gone. These declines derive not just from market saturation and meat imports but from demography; Japan’s population is falling and its average age is rising. The US share of corn imports fell sharply in 2012 (a drought year) and 2013, when Brazil and Argentina together shipped almost as much corn to Japan as did the US, but in 2014 the US again dominated. Falling US soybean shipments closely track Japan’s overall import decline. Brazil’s share has crept upwards, but given the enormous shōsha investments discussed below it is remarkable that Japan’s Brazilian imports fell in absolute terms between 2003 and 2014. Japan’s relative position in world grain imports has also been transformed. Japan took 18% of world soybean exports in the late 1970s and just over 2% in 2015 (Hillman and Rothenberg 1988, 43; USDA FAS 2017, 17) It continued to be the largest corn importer until 2017/18, when its import volume was surpassed by Mexico’s (USDA FAS 2018, 30).

Figure 2. Japan’s Feedcorn imports (millions of tons), selected countries, 2003–2014. Source: JETRO Agrotrade handbook, various issues. THE JOURNAL OF PEASANT STUDIES 7

Figure 3. Japan’s Soybean imports (millions of tons), selected countries, 2003–2014. Source: JETRO Agrotrade Handbook, various issues.

Figure 4. Japan’s Wheat imports (millions of tons), selected countries, 2003–2014. Source: JETRO Agro- trade Handbook, various issues. 8 D. HALL

Is Japan ‘Asian’? Japan in the land rush debate, and three food security visions How, within that broad context, can the last decade of Japanese involvement in grain trading be understood? Research on the land rush suggests one approach. In the debate’s early years in particular, many studies grouped Japan with Asian countries like China, South Korea, and India, and sometimes MENA countries, as putative sources of transnational farmland investment motivated by concerns over national food (and fuel) security in a context of high levels of import dependence and volatile international markets (GRAIN 2008; Daniel and Mittal 2009, 3; Zoomers 2010, 434; Friis and Reenberg 2010,13–15; Borras and Franco 2012, 40). To the extent that Japan’s FAI in grains is driven by ‘Asian’ logics and methods, it can be expected to have certain characteristics. Philip McMichael, for instance, sees much land grabbing as driven by ‘an emergent “agro-security mercantilism”’ through which especially Asian and Middle Eastern states sponsor ‘direct land acquisition to secure food/feed/fuel supplies for designated national consumers’–though they may ‘also anticipate supplying other markets in the longer run’. He contrasts this approach, which ‘overrides the multilateral trading system governed by WTO rules’ and depends ‘more on sovereign wealth funds and government firms and banks to compete for land offshore’, with that of ‘Northern states [that] have a substantial network of corporate supply chains already in place’ (2013, 48, 52, 54, 60). The one reference to Japan in McMichael’s account lists Sojitz’s state-supported investments in South America (see below) as security mercantilist land grabs (51). Scott Lin says more about Japan in arguing that Asian countries target overseas farmland for reasons embedded in their paths to development and industrialization, and that ‘these voracious Asian countries have been driven to pursue overseas farmland investment opportunities to feed the mother/investor countries’ (2017, 493). The model, Lin argues, is Japanese (497). Japan began to establish a ‘vertical overseas food-supply chain’ in the mid-1970s by signing bilateral investment treaties, providing financial aid, investing in agriculture and acquiring agricultural enterprises, and this ‘more global farmland investment approach’ helped secure ‘the food supply for the mother country of Japan’ (495–6). Lin, however, says little about Japanese investments since 2007. There are certainly reasons to place Japan in the Asian/MENA category. Japanese grain trade moves have long been shaped by concerns over stable supplies, import dependence, and food security, and these worries intensified after 2007; there have, too, been some large Japanese direct land acquisitions. The approach also has its dangers, however. One is that Asian and MENA ‘food security land grabbing’ by states other than Japan was less extensive than it was widely said to be in the land grab debate’s early years (Woertz 2013; Brautigam 2015; Muller 2016; Oliveira 2017). Second, the framing usually assumes both that investors want directly to acquire farmland and that they wish to ship the crops grown on it home (Zoomers 2010, 434; Friis and Reenberg 2010, 15). While some accounts recognize investors may also target other markets (Smaller and Mann 2009, 6; McMichael 2013, 52; Lin 2017, 496), the core aim is taken to be providing food directly to the investing state’s populace. This argument is problematic for Japan. The focus on ‘acquiring farmland’, too, can encourage excessive attention to ‘land grabs’ while downplaying investments in other parts of food value chains (though McMichael in particular discusses the latter), and thus the ‘too land-centred perspective’ of much THE JOURNAL OF PEASANT STUDIES 9 research (Borras et al. 2012, 850; Hall n.d.). Some research (including on Japan) has opened things up by exploring nationally-specific understandings of and responses to food import concerns (Koyama 2013; Woertz 2013; Okada 2014; Brautigam 2015; Goetz 2015). Anders Riel Muller’s study of South Korea questions the automatic connection often made between food import dependence, food insecurity, and land grabbing (2016,2–6), while Oliveira finds that excessive focus on ‘Chinese land grabs’ obscures the fact that successful Chinese agroindustrial investments in Brazil have focused much more on upstream and downstream activities (notably trading) than on farmland acquisitions (2017, 2, 148, 157; see also Brautigam 2015, 70, 73). A third danger is that Asian/MENA arguments usually highlight the state role in investments and/or present countries as actors (Zoomers 2010, 434; Borras and Franco 2012, 40; Warner 2015, 1182; Lin 2017). One problem with framing Japan this way is that there have been, to my knowledge, no significant Japanese state acquisitions of overseas farmland. Taking ‘Japan’ as an investor also suggests that the country’s FAI is governed by a unified strategy, and downplays the possibility that firms and state bodies might have conflicting, or just varied, takes. Further, Japan’s wealth and highly sophisticated private MNCs suggest that it might fit into investor groupings like the ‘West’, the ‘North Atlantic’, or the ‘North’ as well as it does into Asia/MENA (see Smaller and Mann 2009, 1, 6). The presentation of Japan as more like India and Saudi Arabia than it is like Canada or Germany would pain Japanese policy-makers (see Leheny 2003), and more importantly may make some aspects of Japan’s FAI less visible. The literature also, however, provides more focused accounts of post-2007 Japanese activity. The foundational text, GRAIN’s Seized!, devotes extensive attention to Japan. While it lists the country as a ‘food security land grabber’ alongside other Asian, African and Middle Eastern countries, it also notes that Japan ‘seems to rely entirely on the private sector to organise food imports […] while the government juggles the political frame through its free trade agreements, bilateral investment treaties and development cooperation pacts’ (2008, 3, 4). It covers shōsha food and agribusiness strategies, noting that Marubeni and Mitsui especially wanted to ‘join the ranks of the world’s top grain traders’, and highlights shōsha efforts to expand overseas markets (especially in China) and move into production in Brazil. Eckart Woertz further complicates things by stating that Japan ‘has not aimed at privileged bilateral access to food production. Rather it has tried to encourage multilateral initiatives at increasing global production levels in order to calm markets’ (2013, 153–154). Tomohiro Koyama (2013) asks why Japan, despite its low food self-sufficiency ratio, has largely avoided overseas land grabbing for food supplies, and emphasizes in his answer the role of trade, trade agreements, aid, the historical organization of Japan’s food imports, and shōsha moves up the grain value chain. From 2013, too, research on ProSAVANA explored Japanese state and corporate motivations (Funada-Classen 2013; Nogueira and Ollinaho 2013; Feldhoff 2014; Okada 2014; Shankland and Gonçalves 2016, and see below). Moving away from the land grab debate, Lee, Jung, and Kim (2014) emphasize post-2007 state and shōsha grain moves, and counterpose them to the Korean government’s failed efforts to create a ‘Cargill of Korea’. Sano (2016) and Oliveira (2017), finally, cover the extent, forms and logics of shōsha engagement in the Brazilian grain trade, and Hiraga (2018, 170) their development into ‘a major vector for investment and integration of key [agri-food] supply chains at a global scale’. I draw on these insights below. 10 D. HALL

The shōsha and the three visions How do Japanese state and corporate representatives conceptualize the relationship between FAI and food security? I argue that their accounts are marked by the coexistence of (and sometimes tensions between) three visions of how Japan can secure access to imported grains. The first two appear mainly in government writings, and have featured in state thinking since at least the 1970s; the third is articulated most purely by Marubeni but also underpins, I argue, the strategies of the other shōsha (see JFTC 2009, 176–182). The visions are not contradictory and projects and policies may be motivated by more than one, but their relative prioritization shapes the character of Japan’s FAI. Understanding the visions requires familiarity with the scale, versatility and capabilities of the shōsha. These unique firms and their forebears have played a crucial role in Japan’s trade relations and economic development since the late nineteenth century (Yoshihara 1982; Yoshino and Lifson 1986; Hiraga and Hisano 2017; Hiraga 2018).4 While acting as importers (especially of natural resources and food) and exporters (particularly of manu- factured products) has been essential to this role, the shōsha are much more than traders. They also undertake financing, investment, resource and infrastructure development, information collection, and the organization of global value chains and production networks (Yoshino and Lifson 1986; Dauvergne 1997; Mitsubishi Shōji and Waseda Daigaku Shōgaku Gakujutsuin 2013; JFTC 2014). They are active, too, in ‘third-country’ trade between countries other than Japan. The shōsha’s networks, global presence and deep pockets let them undertake ambitious and expensive projects. While they coordinate with and receive extensive support from the Japanese government, they remain profit- oriented capitalist firms, and their FAI must be understood in that light. The first, ‘global supply’ vision sees the global grain market as an integrated one in which the impact of increased supply anywhere is felt everywhere. This means any Japa- nese contribution to raising world food production will lower prices, stabilize markets, and help Japan to import even if those specific crops are not exported to Japan. Japanese initiatives can thus improve Japan’s food security through their contribution to world food security, and the two goals are frequently seen as one in government policy. Japa- nese government efforts in this direction (for instance through official development assistance [ODA]) need not involve Japanese companies, but many articulations of the vision emphasize the role the shōsha and other Japanese firms can play in raising overseas food production through FAI. The second, ‘direct supply’ vision worries more about market shocks, supply crises gen- erated by various kinds of risks, and the long-term decline in Japan’s relative buying power. It thus promotes FAI that will generate, and if possible guarantee, direct exports to Japan alongside bilateral interstate negotiations aimed at convincing source countries to prioritize selling to Japan during crises. State and shōsha emphasis on diversifying Japan’s grain import sources, too, is (implicitly) premised on FAI’s generating actual exports to Japan. This vision is the closest of the three to conceptions of Asian ‘food security land grabbing’ and ‘agro-security mercantilism’. It needs to be emphasized, however, that the investors are private corporations rather than state-owned enterprises or sovereign wealth funds; that it is not clear to what extent Japanese private investments

4There is a large body of research on the sōgō shōsha in Japanese that I have not been able to cover in this paper. THE JOURNAL OF PEASANT STUDIES 11 avoid markets or actually guarantee imports; and that farmland acquisitions need not be understood or pursued as the way to secure supplies. The ‘economies of scale’ vision has a similar take on the world grain market, seeing it as oligopolistic on the supply side and noting Japan’s shrinking buying power on the demand side. One source says Japan is ‘tormented’ (sainamareru) at being caught in this position (Nikkei Business 2010). It also assumes with the ‘direct supply’ vision that Japan’s grain imports need to be controlled by Japanese companies. It then argues that to securely supply grain to Japan in this context, Japanese firms must compete with other traders by offering attractive prices to producers. This requires that they cut unit costs (especially in storage and transportation) by maximizing handling volume. Because Japan’s market cannot support the necessary volumes, sales to other countries (especially China) must be maximized. Pursuing these goals does not necessarily require involvement in overseas farming, but does require extensive investment in grain origination, storage, and distribution infrastructure and logistics. This vision thus ties Japan’s stable grain supplies to Japanese corporate profitability, competitiveness and efficiency much more directly than do the other two. Two other points about this vision that I have never seen stated by Japanese state or corporate representatives should be noted here. First, as Midori Hiraga (2016, 2, 4, 13; 2018, 170) points out, China exports large amounts of ‘soybean-derived products’, including soymeal and animal products, to Japan. Soybean sales to China by Japanese firms thus contribute indirectly to Japan’s food imports. Second, the vision is zero-sum. It is obviously impossible for all countries’ firms to handle far more grain than their home markets consume, and most countries will thus not have ‘food security’ in these terms. More specifically, the vision requires extensive Japanese corporate control over China’s food imports.

Japanese engagement in the pre-2007 grain trade I turn now to my first main explanation for recent Japanese grain trade moves: the legacies of pre-2007 Japanese efforts to secure grain imports. These efforts go back a long way. Hiraga and Hisano (2017) trace the role of Japanese state and corporate actors (including trading companies like Mitsui) in developing early twentieth century soybean crushing and trade infrastructure in Northeast Asia, and thus in the original transformation of soybeans into a global commodity. I begin, however, with postwar Japanese responses to dependence on a single (and enormously powerful) country, the US, for grain imports, responses in which both the ‘global supply’ and ‘direct supply’ visions were clearly at work. The Japan-Thailand agreement on maize trade, negotiated annually from 1961 by the Japan Feed Trade Association and the Thai Board of Trade, was a successful early initiative. It encouraged the Thai corn sector’s expansion by, among other things, guaran- teeing an export market, and assistance from Zen-Noh and Japan’s Overseas Economic Cooperation Fund (OECF) further helped make Thailand Japan’s second-largest corn supplier through the 1960s and 1970s (Goldberg et al. 1979, 68, 91–92, 112–132). Japanese state agencies, the shōsha, and Zen-Noh also initiated ‘development import’ (kaihatsu yunyū) corn production projects in Indonesia in the late 1960s. The ‘development import’ strategy, or ‘the overseas production and development by the Japanese of commodities important to the Japanese economy’, was applied to food as officials began 12 D. HALL pursuing agricultural cooperation as a means of securing food imports (Rix 1979,51–53). The first project was an ultimately unsuccessful 1967 technical assistance agreement between the two governments on promoting corn production in East Java; Zen-Noh also participated (Rix 1979, 46; Goldberg et al. 1979, 68; Sears 1983, 187). Mitsui, Mitsubishi, and Itochu got directly involved in corn production in Lampung, Sumatra through joint ventures with Indonesian partners. These shōsha projects encompassed over 16,000 hectares of farmland, and received 3.4 billion yen of Japanese government assistance (MAFF 2011, 18; Koyama 2013, 23). Rix’s account of Mitsui’s venture, and the desire to secure and diversify food import sources that motivated Mitsui and the Japanese government, reads like an ‘Asian food security land grab’ avant la lettre (Rix 1979; Goldberg et al. 1979, 133– 153). The Indonesian projects, however, faced major disease, pest and other problems and failed to generate significant exports (Rix 1979,48–51), and their failure still influenced Japanese thinking about overseas agriculture decades later (see below). Japanese anxieties over securing and diversifying grain imports were intensified by turmoil in world grain markets in the early 1970s, and especially by the short-lived 1973 US soybean export embargo (Congressional Research Service 1977; Goldberg et al. 1979, 78; Sears 1983). These events cast doubt on the reliability of grain markets in general and US exports in particular, and Japan’s government responded with a large- scale reformulation of food policy. ‘Food security’ (shokuryō anzen hoshō) was rethought in terms of ‘comprehensive national security’. State policy emphasized domestic production above all, but also emergency stockpiles and efforts to secure supplies of crops (like feedgrains) that had to be imported (Hillman and Rothenberg 1988,38–49; Smith 2015,8–9, 99–104). One main strand of Japanese responses involved further attempts to develop new supply areas. One report covered projects underway in nine countries (Greenshields 1976). The shō sha expanded their engagement, including through Marubeni’s 1973 purchase (with OECF financing) of 20,000 hectares of land in Brazil’s Mato Grosso to grow soybeans and wheat (Young 1979, 158–159; Gall 1982), a large Mitsui investment with JICA funding in Brazil (Rix 1979, 62), and Nichimen’s involvement in soybean development in China’s Heilongjiang province (the venture repaid Nichimen’s loans with soybean exports to Japan) (Brautigam 2015,41–42). The Marubeni project seems to have done well up to at least the early 1980s (Gall 1982), but I have seen no later references to it or the Mitsui venture and do not know their fate. The most significant initiative was PRO- DECER, the Japanese-Brazilian cooperation project that brought monocropped soya production to Brazil’s Cerrado. Wilkinson et al. argue that Japan played a ‘decisive role’ in ‘the opening up of Brazil’s huge new frontier region in the Center-West’ (2016, 9), and many of the participating farmers were nikkei Japanese-Brazilians (Oliveira 2017,70–83). Japanese government involvement was strongly motivated by the import diversification drive. The direct impact of all this on Japan’s grain imports was limited. 81 percent of Japan’s feedgrain imports still came from the US in 1984 (Hillman and Rothenberg 1988, 47), and dependence remained extreme two decades later (see Figures 2–4). The Ministry of Agri- culture, Forestry and Fisheries (MAFF)’s recent FAI reports celebrate PRODECER for ‘substantially’ reducing soybean import dependence on the United States and contributing to diversification of suppliers, but show that Brazil’s 2008 share was only 15.3% –way up from 1977, but way below the US (MAFF 2011, 18). These initiatives should not, THE JOURNAL OF PEASANT STUDIES 13 however, be judged only in these terms. Greenshields’ statement that the ‘principal aim of Japan’s foreign aid to agriculture is to secure imports of animal feed from developing countries, or at least to increase world production enough to hold down prices’ shows that the ‘global supply’ vision was already working alongside the direct supply one (1976, 6; see also Goldberg et al. 1979, 67). Hollerman argued that these indirect impacts were the primary goal of Japan’s promotion of Brazilian soybean production and that ‘the fact that Brazil remains a relatively minor supplier of soybeans to the Japa- nese market is beside the point’ (1988, 21; see also Oliveira 2017, 76). Japanese observers have, however, been chagrined at ABCD control of the fruits of Japanese-Brazilian cooperation (NHK 2010, 98; Uehara 2012). The second main strand saw Japanese firms deepen their presence in established exporting countries, above all the US. They moved up the value chain by organizing maritime transport (Goldberg et al. 1979, 211), buying coastal export terminals and inland country elevators and transportation facilities, and forging relations with producers. These efforts began in the late 1960s (Yoshino and Lifson 1986, 75), but intensified against the background of an informal 1975 US government commitment to continue supplying Japan with grains (Congressional Research Service 1977, 17, 51). A key moment was Mitsui’s 1978 acquisition of grain facilities along the Mississippi, allowing the firm ‘to overcome a major entry barrier to becoming a full-fledged international grain-trading company’ (Yoshino and Lifson 1986,74–76, 249–250). In 1979, too, Zen- Noh Grain Corporation was established as a grain exporter in New Orleans (Zen-Noh 2016, 9). An early 1980s estimate had the shōsha, their subsidiaries, and Zen-Noh handling 20% of US grain exports, and increasingly selling US grain to third countries (New York Times 1982). The shōsha in the US grain business came to be ‘viewed no differently than a Cargill or an ADM’ (Stebbins 2012). Mitsui ’s subsidiary United Grain Corp. (UGC) in 1998 created its United Harvest joint venture with cooperative CHS, bringing along its grain export terminal at the Port of Vancouver, Washington (Mitsui & Co. 2010). Marubeni’s wholly-owned subsidiary Columbia Grains Inc. (CGI) was set up, and acquired a Portland, Oregon export terminal, in 1978; it expanded its inland collecting network from the 1990s (Sears 1983, 189; Marubeni 2008). Mitsubishi’s Agrex built up a country elevator network, managed an export terminal in Mobile, and in 1998 joined with Gavilon and ADM to operate an export terminal at the Port of Kalama, Washington (JFTC 2014, 351; Marubeni 2014). Perhaps most importantly, in the late 1980s Zen-Noh and Itochu acquired CGB Enterprises, Inc. While I do not know the precise timing of the firm’s development, by 2009 it and its sub-divisions were major players in midwestern grain origination (with about 70 country elevators and river elevators) and also carried out contract farming, seed sales, insurance, and financing; it was also handling 11–12 million tons of grains per year, with most going to Japan (JFTC 2009, 189–191; Mogi and Inoue 2009; Zen- Noh 2016, 9). By the time of the 2007–8 food crisis, then, Japanese firms had for decades been involved in the grain trade. A 2009 estimate had the top four Japanese firms handling 70% of the country’s corn imports and 44% of its wheat (Yamaguchi 2009, 94). The shōsha focused on importing grain to Japan rather than third-country business, and relied less on their own inland procurement (though CGB in particular bought from midwestern farmers) than on buying from the ‘grain majors’ (to use the Japanese term) at 14 D. HALL export points (Yamaguchi 2009,93–94; Nikkei Business 2012). Cooperative relationships with the ABCDs were indispensible. Pre-2007 FAI in grains thus saw diverse mechanisms and protagonists. The mechanisms included long-term supply contracts, technical assistance, loans, direct investment in production, and purchases and development of storage and distribution infrastructure (including silos, export terminals, and rail lines). Participants included the shōsha, Zen- Noh, and state agencies, sometimes in coordination, sometimes on their own. Direct government support for the shōsha is more evident in their ‘development import’ efforts in developing countries than their US grain investments. Further, while some land grab accounts suggest that ‘Japan’ had large overseas holdings of farmland by the mid- 2000s (Lin 2017), there is little indication of this for grains. The 2011 FAI report says Japan’s shōsha ‘have up until now been passive towards overseas agricultural production of grains etc. because of country risk, weather risk and so on’–but also that that has begun to change (MAFF 2011, 16; for an updated framing see 2016, 6).

Japanese state promotion of foreign agricultural investment from 2008 The 2007–8 food crisis received extensive coverage in Japan (see Shūkan Tōyō Keizai 2008). International controversy over ‘land grabbing’ began slightly later and further heightened Japanese food security worries. MAFF’s 2010 Basic Plan for Food, Agriculture and Rural Areas (2010) argued that world population growth, rising incomes in countries like China and India, and growing biofuels use were increasing demand for agricultural products, while water shortages and desertiﬁcation driven by climate change and other causes, along with slowing world grain yield growth, were raising supply concerns. Grain prices were thus high and likely to keep rising. MAFF noted, too, that some food- importing countries, multinational corporations, and other bodies had been promoting investment in farmland around the world. Such conditions

can’t help but lead, in our country which relies on imports for most of its food, to anxiety over the securing of food supplies over the medium to long term. In our small island country where over 120 million citizens must be provided for, securing a stable supply of food is the state’s most fundamental responsibility to the people. (15; see also Lee, Jung, and Kim 2014,73–75) Japan’s ability to ensure this was imperiled by the decline of Japanese agriculture, however, and government officials noted the dangers posed by export restrictions in exporting countries and by Japan’s falling market presence following the rise of China and other emerging economies (Ōe 2009, 1; Nagai 2010, 41). One response to the food crisis was the then-ruling Liberal Democratic Party’s May 2008 creation of a ‘Food Strategy Headquarters’ under prominent politician Kōichi Katō. The Ministry of Foreign Affairs (MoFA) established a unit within its Economic Security Division to develop a framework for ensuring food imports during crises, and MoFA and MAFF began working together on these topics (NHK 2010,84–86). Officials also responded quickly to the ‘land grab’ controversy. At a March 2009 meeting of politicians, MoFA and MAFF officials, and shōsha representatives, Katō asked whether Japan should think about buying farmland overseas. The shōsha poured cold water on this idea, with Mitsui’s Takuya Saitō arguing that ‘If we think about the feelings in other countries, it will surely be difficult for the government to go overseas and buy agricultural land’ THE JOURNAL OF PEASANT STUDIES 15

(Miyaji and Nagasawa 2010). They also referred to their bitter 1970s Indonesian experiences (see above) in emphasizing the risks of large-scale overseas agriculture (see also JFTC 2009, 170). While the government did not seek to acquire farmland abroad, officials maintained interest in increasing Japanese involvement in overseas agriculture. MoFA and MAFF hashed out a two-pronged strategy combining an international diplomatic push for prin- ciples for responsible agricultural investment (PRAI) with efforts to stimulate Japanese public-private cooperation around foreign agricultural investment. I focus on the latter as more directly targeting the grain trade, but avoiding criticism of Japan’s FAI was a key motivation for the PRAI push (NHK 2010,90–91; Hall n.d.). In April 2009, MoFA and MAFF took the lead in creating a body to develop FAI policy (MoFA and MAFF 2009; Naka- moto and Blas 2009). The Shokuryō Anzen Hoshō no tame no Kaigai Tōshi Sokushin ni kan suru Kaigi (Council for the Promotion of Foreign Investment for Food Security) included MoFA, MAFF, the Ministry of Finance, the Ministry of Economy, Trade and Industry, the Japan Bank for International Cooperation (JBIC), the Japan International Cooperation Agency (JICA), the Japan External Trade Organization (JETRO) and Nippon Export Import Insurance (NEXI). It met in private in April, May and June 2009, and in public to discuss its proposals with shōsha and other Japanese businesses in July, before releasing ‘Guidelines on the Promotion of Foreign Investment for Food Security’ in August (Nagai 2010,44–47). The strategy began from the argument that more private Japanese FAI was needed both to secure stable food imports for Japan and to raise global agricultural production. It claimed that while some Japanese companies were embarking on FAI, climate, disease, country, and other kinds of risks imposed limits on such individual undertakings, and a comprehensive public-private approach was thus required to support companies undertaking FAI for food security (MoFA and MAFF 2009; Nagai 2010, 42). A diagram titled ‘Image of Public-Private Cooperation Related to Foreign Investment Promotion’ (MAFF 2012a,29–30) lays out the approach. Soya and corn are prioritized for their tight international supply-demand conditions, high import dependence, importance in Japanese diets (shoku seikatsu), and excessive reliance on one supplier. The targeted regions, Central and South America, Central Asia, and Eastern Europe, are those seen to have most potential for increased production and exports. Investments in other crops and regions would be supported as appropriate. Private companies would do the actual investing in not just ‘production’ (including land purchases and leases) but ‘collection’, ‘transport’ and ‘export’ infrastructure, with the Guidelines seeking ‘comprehensively to support’ not just land acquisitions but ‘the whole value chain from production to export’ (Nagai 2010,41–42). State support would include preparation of the investment environment through bilateral investment treaties and other economic cooperation; the use of ODA, public finance, trade insurance, and other financing; and information collection and dissemination. The envisioned outcome is ‘Ensuring stable food supplies for Japan and the world.’ Different visions of food security run through the strategy. A first point to note is that it says little about where grown and traded crops will be consumed. For the global supply vision, the issue is not that important. Early reports on Japan’s plans stated that while farmland investments from countries like South Korea and Saudi Arabia aimed to grow food for export back home, Japanese FAI would seek instead to increase overall world food 16 D. HALL production and sell crops on world markets, on the grounds that (in the words of MAFF’s Munemitsu Hirano) ‘If [food] production increases worldwide that will help Japan to import’ (Nakamoto and Blas 2009; Ōe 2009, 1; Nagai 2010, 41). This vision, however, sits alongside concern for Japan’s direct food supplies. A MoFA official told journalists in July 2009 that initiatives to raise world production would be accompanied by efforts to pursue bilateral arrangements that would see exporting countries exempt Japan from food export bans or restrictions (NHK 2010,88–89). Australia agreed to endeavor not to introduce export bans in its 2014 Economic Partnership Agreement (EPA) with Japan (MAFF 2015a, 38). The core goal of using FAI to diversify import sources (Nagai 2010, 40; MAFF 2013b, 27) also implicitly requires that some produced/purchased crops go to Japan. In comments that bring together the direct supply and economies of scale visions, too, MAFF’s Makoto Nagai argued that intensifying global competition and Japan’s shrinking grain trade profile mean Japanese companies can no longer rely on buying from the grain majors, and need to deepen their involvement in grain value chains. Since ‘it is not realistic to, for instance, force private firms to take losses in order to sell to Japan even when there are other countries/parties that will pay higher prices’, the issue is getting firms to ‘prioritize bringing food to Japan’ at times of supply crisis – that is, ‘how we can, while skilfully using the free business activities of private corporations, ensure our country’s food security’ (Nagai 2010,40–43; see also NHK 2010, 80). Japanese state agencies have undertaken various projects fitting the Guidelines’ goals and methods (though some have been justified with reference to other policies). First, the government initiated bilateral investment agreement negotiations linked to FAI with Kazakhstan, Angola, Ukraine and Mozambique (MAFF 2013b,28–29). Second, MAFF has produced at least five general FAI reports providing information on grain market conditions, Japan’s grain imports, state FAI promotion, and existing Japanese FAI (MAFF 2011, 2012a, 2012d, 2013b, 2016a). MAFF also contracted studies of prospects for FAI in Ukraine, Russia, Paraguay and Uruguay, and Brazil and Argentina (Mitsubishi UFJ Research and Consulting 2011, 2012; Promar Consulting 2013a, 2013b), and drew on them in its own reports on Brazil, Ukraine and Russia (MAFF 2012b, 2012c, 2013a). The detailed attention to distribution and export infrastructure in these reports stands out. They are unenthusiastic about FAI prospects outside Brazil and (to a lesser degree) Argentina, however, and the reports on Russia and Ukraine are quite discouraging. Third, NEXI and JBIC have provided large-scale financial support for some corporate projects (MAFF 2016a,6–9). I discuss some of these efforts (most of which date from 2013 or later) below, but note here a state-supported trading arrangement that resonates with the direct supply vision. Japanese banks have since 2014 agreed to lend between $100 and $200 million in working capital to each of three agribusiness companies or coop- eratives in Argentina (CAGSA, ACA, and Vicentin) and one in Brazil (Amaggi) (NEXI 2014, 2015, 2016, 2017). The companies promised to export specified volumes of grains to Japan, and to make best efforts to supply Japan even in emergencies. CAGSA and Vicentin committed to sell to Marubeni and Mitsui respectively, and ACA has a long-term relationship with Zen-Noh (see below). NEXI insures the loans, and justifies this in part by reference to securing a stable food supply to Japan. A fourth key (and notorious) government initiative was ProSAVANA. This agreement was signed at the height of Japan’s PRAI and FAI pushes in September 2009, and is connected directly to both in government writing (JICA 2012; MAFF 2013b, 35). There is a THE JOURNAL OF PEASANT STUDIES 17 substantial literature on ProSAVANA, so I discuss only some key points here.5 The project sought to bring PRODECER’s achievements to the Mozambican savannah, and proposed to support both small farmers and private capital doing medium or large-scale farming for the international market; the crops highlighted included soya and corn (MAFF 2012a, 25). The Japanese government pushed the project politically and promised funds, technical support and planning, and a Brazilian-Japanese public-private mission including shōsha representatives visited Mozambique in April 2012. The shōsha have expressed occasional interest in farming in Mozambique (Nikkei Business 2014), but more enthusiasm about grain trading and infrastructure in the Nacala Corridor (Uehara 2012; Hall n.d.). Connec- tions between ProSAVANA and Japan’s food security have been framed in terms that match the global supply vision (Nogueira and Ollinaho 2013, 5; Okada 2014, 33). However, problems with the project, including resistance in Mozambique, Japan and elsewhere, have transformed and stalled it (Shankland and Gonçalves 2016). ProSAVANA featured in the 2012 and 2013 FAI reports but disappears from the 2016 version. The FAI strategy is ambitious, but government unity in promoting it should not be assumed. The strategy needs, first, to be understood in the context of Japan’s broader food security policy. This includes other international initiatives not directly connected to FAI, like strengthening the international trading system and agricultural ODA (MoFA 2009; Nagai 2010, 40; see Margulis 2014, 340–341). The strategy makes clear, too, that ‘stable food supply to the people shall be secured with increase of domestic agricultural production as a basis’–as stated in Japanese law (Government of Japan n.d.). The line after the statement of the state’s ‘most fundamental responsibility’ in the 2010 Basic Plan quoted above deals not with FAI but with the need to raise Japan’sfoodself-sufficiency ratio as much as possible (MAFF 2010, 15). MAFF has long set goals for this ratio, and the most recent calorie-basis goal is 45% (and 40% for feedgrains) by 2025 (MAFF 2015b, 8). The FAI strategy thus exists within a policy framework that (at least nominally) prioritizes import substitution over imports. Indeed, some analyses find that MAFF was not keen on promoting FAI because of the impact of increased imports on Japanese farmers, and that agriculture-affiliated LDP politicians were also concerned about the plan (NHK 2010, 106–109; Miyaji and Nagasawa 2010). Public Broadcaster NHK’s book Land Rush: The Intensifying Global Farmland Struggle reports, too, that MoFA – the main promoter of the FAI scheme – began to lose interest as grain prices fell, and that the Ministry of Finance had little interest in seeing JBIC money used for FAI (though this stance seems to have changed by 2013) (2010,109–110).

Japanese overseas grain investments from 2007 The preceding section paints a picture of a multifaceted government strategy. Some com- mentators argued, however, that Japan was not doing enough to respond to the changing global food trade and the land rush, especially compared to what were seen to be the more decisive actions of China and South Korea (NHK 2010). One critical article was titled ‘Leaving it up to others: Japan’s lack of policy’ (Nikkei Business 2010). Hiromu Kajiwara, a former governor of Gifu Prefecture who had helped inspire a soybean project in Argentina (see below), bluntly stated that ‘The country and shōsha are late’

5On Japan’s role see (Funada-Classen 2013; Nogueira and Ollinaho 2013; Feldhoﬀ 2014; Okada 2014; Shankland and Gon- çalves 2016; Kithinji 2017). 18 D. HALL

Table 1. Sōgō Shōsha and Zen-Noh grain handling volumes (Millions of Tons). Firm Volume Date and Source Marubeni 67 (including double-counted trades) 2016 (Marubeni 2016, 22) Mitsui 17.5 2015 (Yushi 2015b, 29) Zen-Noh Grain Corp. 13 (exports from US) 2017 (Schroeder 2017) Mitsubishi c. 10 2014 (JFTC 2014, 353) Itochu 7.5 (not including joint ventures) 2015 (Yushi 2015d, 39) Sumitomo 5–6 2015 (Yushi 2015f, 41)

(Miyaji 2010). The shōsha caution that informed the Guidelines runs through my sources. The NHK book details a Japanese farmer’sefforts to start a soybean farming scheme in Ukraine’s Crimea and his inability to get shōsha or government support; it also describes an unnamed shōsha dithering over investing in a large farm in far-eastern Russia and being beaten to the punch by Korea’s Hyundai Heavy Industries. It argues, too, that the shōsha had little interest in 2009’s FAI strategy and shared neither the government’s take on the food crisis nor the ‘All Japan Team’ image behind the Guidelines (98–104, 213–14; see also JFTC 2009,21–25). Shōsha caution, while real, is far from the whole story. The shōsha and Zen-Noh have made dozens of investments in overseas grain production or trading since 2007. The surge predates the FAI Guidelines, and strengthened as the shōsha sought to reduce their reliance on the energy and minerals sectors. Shōsha goals and accomplishments have been impressive (see Table 1). Marubeni went from handling 7 million tons of grain in 2004 to 25 million in 2012 and 67 million in 2015–16 (Yamaguchi 2009, 94; Wakita 2013, 155; Marubeni 2016, 22). Mitsui, Itochu and Mitsubishi have set volume goals of 20 million tons, and Sojitz of 10 million (Mogi and Inoue 2009; Mitsui & Co. 2013c; Sojitz 2013; JFTC 2014, 353). A broad picture of these investments can be painted. The shōsha see few countries as attractive locations for grain projects. Brazil and the US are most important, Argentina and Australia have seen substantial involvement, and Russia has prompted interest but less actual investment. Other countries including Canada, Kazakhstan and Ukraine have seen scattered projects. Investments are mostly in corn and soya in Brazil and Argentina, wheat in Australia, and all three in the US. The great bulk are in origination/collecting, storage, distribution and exporting, and do not seem to involve farmland acquisitions; projects that clearly do are largely in Brazil. Some investments see the shōsha supplying farmers with upstream inputs like agrochemicals, seeds and financing (Sano 2016). Almost all involve partnerships with, investments in, or acquisitions of existing concerns. Japan is an envisaged or actual final market for many projects, but China and Asia come up at least as often, and Japanese firms have established supply partnerships with COFCO and Sinograin and invested in Chinese feed milling. I outline Japanese FAI here, and Marubeni’s grain trading strategy below. While I bring out connections to the three ‘visions’ where they are especially direct, I give my overall assessment of the visions’ influence in the conclusion.

The United States I am not aware of shōsha or Zen-Noh US farmland acquisitions for grain production since 2007. They have, however, made huge investments in inland grain origination, storage and THE JOURNAL OF PEASANT STUDIES 19 shipping and in export terminals. The export terminal side has seen at least four projects. First, Mitsubishi’s Agrex in 2004 took a minority stake in FGDI, a company with a grain procurement network and an export facility in Mobile, Alabama. Agrex raised its stake to 75% in 2007, bought the remainder in 2009, and merged FGDI into itself in 2010 (Mitsubishi Corp. 2007; Agrex Inc. n.d.). Second, Itochu teamed up with Bunge North America and South Korean shipping firm STX Pan Ocean in 2009 to build the $200 million Export Grain Terminal (EGT) in Longview, Washington, the US’s first new grain export terminal in over 20 years (Reuters 2009; Bunge 2011; U.S. Soybean Export Council 2012, 3). Third, when the United Harvest joint venture was dissolved in 2010, Mitsui’s UGC reverted to being sole manager of the Vancouver Export Terminal in Washington state and of country elevators in Montana. It announced an additional $72 million investment in UGC to expand the terminal in the same year (bringing the total to $200 million) to enable increased shipments to Asia. The facility added feed grains and oilseeds to its wheat capability, and became the largest by capacity on the US west coast (Mitsui & Co. 2010; United Grain Corp. n.d.). Fourth, Marubeni’s 2013 acquisition of Gavilon gave it Gavilon’s stake in the KEC terminal in Washington. Marubeni also contributed its Portland terminal to KEC, which was renamed Pacificor (Marubeni 2014). The shōsha also moved further inland. In 2008, Marubeni’s CGI expanded its indepen- dent abilities to originate wheat, corn and soybeans by buying assets in North Dakota and Minnesota (Marubeni 2009; JFTC 2014, 340–341). Between 2011 and 2013, Mitsubishi’s Agrex undertook mergers and joint ventures that expanded its access to grain elevators, storage, and shipping in Indiana, Iowa, North Dakota, and South Dakota (Agrex Inc. 2011, n.d.). Japanese (and South Korean) firms ‘rapidly expanded their direct management of grain acquisition, handling, transportation, and export processes’ in the Northern Great Plains Region, and Mitsui’s UGC, Marubeni’s CGI and Gavilon, and Itochu’s EGT venture between them came to own 13 of the 21 hyper-efficient wheat shuttle-loading facilities in Montana (Bekkerman 2013, 2). In 2012, meanwhile, Zen-Noh and CHS established CZL Ltd. to source grains for Japan (Zen-Noh 2016, 7). Itochu and Zen-Noh’s CGB, too, further expanded its operations through a series of acquisitions of existing firms and construction of new facilities; there is not room to list them individually (see CGB Enterprises, Inc. n.d.), but by 2015 the firm claimed to operate 97 grain facilities in the Midwest (Bucha- nan 2015). The stand-out shōsha investment in the US (and global) grain trade, however, is Maru- beni’s 2013 acquisition of Gavilon’s grains and fertilizer businesses for $2.6 billion (or $4.6 billion including debt) (McLannahan 2013; Parker 2016). Most of Gavilon’s grain handling in 2012 was internal to the US, where it had over 140 collecting points, but it was also active in Brazil, Australia, Ukraine and elsewhere (Nikkei Business 2012; Yoshida 2012). Mar- ubeni and Gavilon’s combined handling volume was 60 million tons, behind only Cargill (75 million) and ADM (70 million) (Wakita 2013, 155). JBIC (2013) announced that it would acquire 60 billion yen (around $600 million) worth of preferred shares in Gavilon – by far the largest example of direct Japanese state support for a corporate FAI project, and the only one I know that involves equity. JBIC argued that its ‘equity participation will contribute to improving the international competitiveness of Marubeni’s grain and fertilizer business.’ I discuss this deal further below, but note here that supplying China was crucial to the rationale behind it. 20 D. HALL

Brazil The shōsha have been enthusiastic about FAI in Brazilian grains (MAFF 2012b, 31; Mitsui & Co. n.d.). Their keenness is in part a legacy of the interaction of their long-term Brazilian presence, the Japanese government’s past role in Brazilian agricultural projects including PRODECER, and the place nikkei Brazilians have come to occupy in Brazilian farming (Oli- veira 2017,48–56, 70–83). Shōsha representatives also emphasize Brazil’s rapidly expanding soya and corn production and scope for further development. Mitsui’s Saitō has said that ‘Brazil is the only place that we believe has large-scale potential (for Japan) to buy up farmland’ (Nakata 2010; see also Mitsui & Co. n.d.), and a 2014 report cited by Wesz Jr. (2016, 307) found that Japanese firms controlled over 300,000 hectares of arable land in Brazil. The shōsha have also noted, and responded to, the challenges of Brazil’s poor internal grain distribution infrastructure. Data cited by Oliveira (2017, 20) shows Japan as the largest source of foreign investment in the ‘Brazilian soybean complex’ between 2009 and mid-2015, with almost all of that investment going into ‘silos and warehouses’ and ‘port[s] and railroad[s]’. Here I cover key Japanese investments in Brazilian grain production and trading infrastructure since 2007 (see also Sano 2016; Oliveira 2017, 316–318). Mitsui made a bold and widely-reported early move into Brazilian grain production.6 In August 2007, it bought 25% of Multigrain, a soya-focused originating and exporting company with 21 collecting points and an export terminal at Santos Harbour. Mitsui then bought Agricola Xingu, a soya, corn and cotton producer with 120,000 hectares of land in three states, and made it a wholly-owned subsidiary of Multigrain. By 2011 Mitsui had full control of Multigrain at a total cost of $508 million. By late 2013, it had again separated the originator (Multigrain) from the farming company (Xingu Agri AG). In 2015, Xingu produced 160,000 tons of corn, cotton and soya and Multigrain handled 5.5 million (mainly soya). Saitō stated in 2011 that most of the food crops would go to China; another Mitsui representative claimed in 2014 that Multigrain supplied 60% of Japan’s Brazilian soybean imports. Mitsui highlights the management and traceability benefits of unifying production and shipping, and says Multigrain ‘gives us a presence at the very first link of the whole agricultural value chain, something none of our competitors can claim to have’. That Xingu produced non-GMO soya was a big plus. This project’s significance is underlined by its prominence in the FAI reports (and in land deal inventories – see Hall n.d.), but I am not aware of direct Japanese government support. Mitsui made further investments in 2013. One emerged from a challenge: Mitsui wanted to expand production and reduce weather risk by spreading out its farms, but new restrictions on land purchases by majority foreign-owned companies meant Multi- grain could not take this on (Mitsui & Co. n.d.). Mitsui thus set up a joint venture called SLC-MIT with SLC Agricola, one of Brazil’s biggest grain producers. The joint venture leased 22,000 hectares of Xingu’s land in Bahia and 16,000 hectares from SLC in Mato Grosso (Mitsui & Co. 2013a, 2014). Mitsui claimed to have established Xingu and SLC as Brazil’s biggest agricultural production group and made it a platform for Mitsui’s agricultural operations, including sales of agricultural chemicals, farm machinery, and IT (Yushi 2015b, 28). Mitsui also agreed to buy 20% of VLI, the cargo unit of mining giant Vale

6This paragraph relies on Humber and Suzuki (2011); Mitsui & Co. (n.d.); Callick (2014); JFTC (2014, 347–348); Yushi (2015b). THE JOURNAL OF PEASANT STUDIES 21

SA, for a massive $675 million (Bloomberg 2013b). VLI had port terminals, over 10,000 km of railroads carrying cargo (including grains and fertilizers), and big expansion plans (Mitsui & Co. 2013b). Mitsui writes that ‘As Brazil’s northern and northeastern states come under the plow, Mitsui can help construct essential transportation infrastructure through VLI’ (Mitsui & Co. n.d.). Other shōsha have also jumped in. Marubeni bought 25.5% of grain export terminal owner Terlogs in 2005, and in 2011 purchased it outright; the goal was to get around export bottlenecks (JFTC 2014, 342–343). Marubeni agreed with Amaggi in 2009 to work on increasing grain production, exporting to Japan and Asia, and possible port investments (Marubeni 2009, 5). In 2011, Marubeni established a grain exporting subsidiary, CGTI Brasil, which in that year bought 5.5 million tons of soybeans and corn. 90% of its grains went to China (Hirade 2012). In 2017 Marubeni shipped 10 million tons of grains from Brazil, behind only Bunge and Cargill (Reuters 2018). Mitsubishi established a Brazilian subsidiary for soybean origination in 2011, acquired 20% of Los Grobo Ceagro do Brasil (the Brazilian arm of Argentinian agribusiness giant Los Grobo) in 2012, and in 2013 paid (according to industry speculation) around $500 million to take that stake to 80%. Ceagro’s name was changed to Agrex do Brasil, and Mit- subishi gained control over its grain production (on about 60,000 hectares of land as of 2012), origination, storage, and distribution, along with its herbicide, fertilizers and seeds businesses; it also has a long-term rail contract with Vale. Mitsubishi’s funds supported plans to expand grain production to 94,000 hectares, but more importantly ‘turbo- charged’ origination targets, with the company hoping to raise its 1.2 million ton 2014 handling volume to 5 million tons by 2019 (Reuters 2012; Wilson Sons 2014; JFTC 2014, 350–351; Oliveira 2017, 316). It also took Mitsubishi’s Brazilian handling volume to 3 million tons a year (Sagimori and Inai 2014). Sojitz entered Brazilian grain production and collecting in 2013 through investments in Cantagalo General Grains S.A. and CGG Trading S.A. CGG Group was farming about 150,000 hectares of land and collecting 2 million tons of grain per year, and Sojitz and CGG hoped to expand to 200,000 hectares and 6 million tons by 2020 (Sojitz 2013). A Sojitz representative put the investment at $130–$140 million (Yushi 2015e, 43), and Oliveira (2017, 316) reports that the 2013 investment acquired 43% of the company and that Sojitz completed full acquisition in 2016. The initial investment was supported by a $94 million JBIC loan co-financed with three Japanese private financial institutions; both Sojitz and JBIC emphasized what JBIC called Sojitz’s ‘policy of contributing to the stabilization of food resource acquisition and supply in Japan and Asia by internalizing the grain supply chain from agriculture and grain collection to export’ (Sojitz 2013; JBIC 2014). While the CGG investment involved a very large- scale land acquisition, the economies of scale vision seems also to be at work, since most soya produced and collected through Sojitz ’s investments in Brazil and Argentina (see below) goes to China (Yushi 2015e, 45). Toyota Tsusho agreed in 2015 to purchase 100% of NovaAgri, a grain collecting and infrastructure company. While Toyota Tsusho had in 2010 formed a partnership with Nidera aimed at investment in grain sales and storage facilities in Brazil, Argentina and elsewhere (MAFF 2016a, 8), this new move marked its entry into Brazilian grain accumulation (Toyota Tsusho 2015; Yushi 2015c). It, too, was supported by JBIC, which agreed to loan $132 million and presented the deal as contributing to world food security and 22 D. HALL stable Brazilian grain supplies for Asian countries including Japan (JBIC 2015).7 Finally, in March 2015 Itochu invested in Naturalle, a collector of mainly non-GMO soybeans that handles about 1 million tons of grain per year; most of its sales are to China (Yushi 2015d, 39). An important aspect of many Japanese investments has been the need to improve and expand grain storage, distribution and export infrastructure. Several Japanese projects have come together in developing a large specialist grain export terminal at Itaqui Port near São Luís on Brazil’s northern coast. Until recently, northern Brazil’s dearth of export facilities has meant grain from the north and northeast has been shipped thousands of kilometers to backlogged harbors in the south and southeast. The Itaqui terminal is one of several efforts to open up northern export points closer to producing areas and Asian markets. It began operations in 2015 with a capacity of 5 million tons per year, and planned to expand (Yushi 2015c, 33, 2015e, 43). It is managed by Tegram, a consor- tium whose members as of 2015 were Glencore, CGG Group, and joint ventures between NovaAgri and CHS and Louis Dreyfus and Amaggi. Sojitz’ investment in CGG and Toyota Tsusho’s in NovaAgri were motivated by the desire to participate (Sojitz 2013; Toyota Tsusho 2015), and 2016’s FAI report highlights their Itaqui investments (p.9). Japanese involvement deepened in early 2017 with the announcement that Zen- Noh Grains Brazil Holdings would buy one third of Dreyfus and Amaggi’s grains-collecting and port terminal venture (Schroeder 2017). Recent years have also seen broader Japanese government promotion of Japanese investment in Brazil’s grain sector. Both 2013’s Infrastructure Export Strategy and 2014’s Global Food Value Chain Strategy support such moves. Japanese prime minister Shinzō Abe’s 2014 visit to Brazil saw an agreement to cooperate on improving Brazil’s grain distribution infrastructure (Sagimori and Inai 2014), the decision to begin an annual public-private bilateral Dialogue on Agriculture and Food, and the announcement of the NEXI-backed loan to Amaggi mentioned above. The two countries held a Seminar on Improvement of Grain Transportation in Brazil in São Luís in 2015 (MAFF 2016b,22–23). Finally, in September 2018 JICA signed a $50 million loan agreement with Amaggi to support the latter’s grain supply chain activities in northeastern Mato Grosso (including warehouses and financing for farmers) in order to ‘advance sustain- able agricultural development in this region and bring benefits to Japanese and global food security’ (JICA 2018).

Argentina Some Japanese grain traders had a presence in Argentina before the 2007–8 food crisis. Zen-Noh began trading with the Asociación de Cooperativas Argentinas (ACA) in 1964, and by 2016 ACA had exported about 10 million tons of feed grains to Japan (Zen-Noh 2016, 7). One small-scale project is worth discussing for its unusual features, including its prefectural government-level origins, its appearance at a time that FAI for food security was not a major Japanese priority, its resonance with the ‘direct supply’ vision, and its media proﬁle in Japan. The initiative originated in a food security plan formulated in

7The 2016 FAI report says (p. 8) this acquisition also received trade insurance from NEXI, but I have not been able to confirm that. THE JOURNAL OF PEASANT STUDIES 23 the late 1990s by Gifu Prefecture governor Hiromu Kajiwara.8 Kajiwara wanted the prefecture to buy farmland in Argentina and entrust production on it to emigrants from Gifu and their descendants, and asked Tomohiro Nakada, president of a vegetable-growing company, to work with Gifu on the scheme. While the prefecture withdrew after criticism (including worries that food imports would ‘squeeze prefectural agriculture’), Nakada founded Gialinks (Gi = Gifu, A = Argentina, links) in 2000. This private company has two main businesses in South America. In 2003, it bought 1250 hectares of former experimen- tal farmland in Argentina from JICA and entrusted production on them to nikkei farmers. As of 2010 farmers were growing 3000 tons of non-GMO soya, corn and other crops, with at least some certified organic to Japanese standards. Most production went to local markets and Europe, and about 400 tons per year to Japan (Nihon Keizai Shimbun 2010). Gialinks also began a relationship with nikkei farmers in Yguazu, Paraguay in 2003, and imports their non-GMO soya. Nakada’s goal was to make Yguazu ‘a frontline base for Japanese food-securing’ (Endō 2012). A nikkei agricultural cooperative central organization in Paraguay also agreed with Gialinks to work towards supplying grains if Japanese food supply conditions become tight. Gialinks bought about 3000 tons of soya in 2010 (Nikkei Sangyō Shimbun 2010). While this is a vanishingly small percentage of Japan’s soya consumption, I have seen more main- stream media coverage of Gialinks than of most of the much bigger projects discussed in this paper. One prompt for this attention was the Japanese government’s 2010 invitation to Nakada to discuss Gialinks’ food-securing activities at a FAO summit in Tokyo; he then attended an UNCTAD meeting in Geneva and expressed support for PRAI (Nakada 2010). Another was that after 2011’s Great East Japan Earthquake the Yguazu cooperative donated 100 tons of non-GMO soybeans which Gialinks arranged to have processed into over 1 million blocks of tofu for disaster victims (Asahi Shimbun 2011). One article por- trayed this as the success of Gialinks’ approach: capacity built up in ordinary times secured food for Japan in an emergency. Nakada sees Gialinks’ work as raising Japan’s food self- sufficiency ratio (Decide 2012, 17), presumably because the food, while grown abroad, is ‘made by Japanese’ (Endō 2012). Argentina has received larger-scale Japanese investment since 2007. Sojitz chose it for the first overseas investment of the agribusiness department it established in 2009. In 2010, it set up a fully-owned subsidiary, Sojitz Buenas Tierras del Sur S.A., which leased 11,000 hectares of farmland in the Pampas to grow mainly soybeans, corn, and wheat. The farming was managed by an Argentinian firm. This deal is among the best-known Japanese ‘land grabs’ (Hall n.d.). Chikahide Mori explained Sojitz’s move into agriculture in terms similar to land grab debate arguments about increasing corporate interest in farmland acquisitions, stating that given rising world population, demand growth in big emerging markets, and grain price spikes deriving from expanding use of grains for energy and investment fund activities, Sojitz needed to get directly involved in farming to secure food supplies. He gave precise reasons for choosing Argentina from a very short list of potential countries (the others were the US and Brazil) (Nihon B ōeki Geppō 2011; see also Inajima and Suzuki 2010). NEXI insured the investment, writing that

8My account draws mainly on Miyaji (2010); Gialinks (n.d.); Asahi Shimbun (2010); Chūbu Keizai Shimbun (2011); Decide (2012). 24 D. HALL

As this is the ﬁrst case of NEXI support for serious development of agricultural enterprise by a Japanese company, it can be said to be an extremely important case. In future, NEXI will wholeheartedly support projects like this in which the overseas activities of our country’s companies contribute to securing stable food supplies. (NEXI 2010) While NEXI framed the project as being about Japan’s food supply, and McMichael calls it ‘security mercantilist’, Sojitz planned to export the crops mainly to China, India and Vietnam (while beginning with exports to Japan) (Inajima and Suzuki 2010; Nihon Bōeki Geppō 2011, 37). The project, however, is defunct; after a 3-year trial, Sojitz decided proﬁt- ability would be a problem given harvest volumes and the land’s rental price (Bloomberg 2013a). Company representatives also argue, however, that their experiences in Argentina allowed them to ‘step up’ to investing in Brazil’s CGG (see above). Further, CGG in 2013 established CGG Trading Argentina, which in 2015 shipped 1.2 to 1.4 million tons of soya, wheat, corn and sorghum and sells to Sojitz (Yushi 2015e,43–44). Marubeni, meanwhile, formed a ‘comprehensive alliance’ with Molino Canuelas, an Argentinian food products company with its own farmland and grain origination network, in May 2009. Molino supplies Marubeni with soya and other grains to sell to Asia (especially Japan) and Europe, and the two companies jointly own port facilities (Yushi 2015a,23–24; MAFF 2012a, 21).

Australia Australia has seen several major shōsha grain investments, with wheat the key crop. The country appeals for several reasons: its importance as a grain producer and exporter, its proximity to Japan and Asia, the long-term involvement of shōsha like Mitsui and Mitsu- bishi in its grain trade, the recent liberalization of that trade and the 2008 removal of the single desk for wheat exports, and 2014’s Japan-Australia EPA. I do not know of any shōsha investments in grain farming in Australia; rather, they have invested in originators, distribution systems, and export infrastructure. Sumitomo has done the most.9 It became the first foreign company to acquire Austra- lian grain infrastructure when it bought 50% of harbor terminal and silo management company Australian Bulk Alliance (ABA) in 2005. In 2010 it made ABA a 100% subsidiary and bought 50% of originator Emerald Grain; ABA was integrated with Emerald in 2011. It bought the remainder of Emerald in 2014. Sumitomo thus took full control over Austra- lia’s fifth-largest grain originator, one that in 2014 had annual revenues of around $1.5 billion, handled roughly 4.5 million tons of grain, and had a storage and logistics chain including silos in 14 locations and rail links to the Port of Melbourne. Both Emerald and Sumitomo sought to use the deal to supply Asian markets. In 2012, Mitsui moved beyond its long-term role as an FOB buyer of Australian grains for, especially, the Japanese and South Korean markets when it bought 25% of Western Australian grain originator Plum Grove. The deal was part of an effort to shift Mitsui’s Aus- tralian presence away from resources and towards agriculture (Tasker 2012; Callick 2014). One report said ‘Mitsui is eyeing port, rail and grain handling assets worth hundreds of millions of dollars on Australia’s east coast as part of a ‘bold’ push to more than triple its share of Australian grain exports by 2020’–impressive given that Mitsui was already

9This paragraph is based on RIA Oreanda-News (2012); Bettles (2014); Yushi (2015f). THE JOURNAL OF PEASANT STUDIES 25 the sixth-largest exporter of Australian wheat (Wallace 2014). This push, too, was motivated by the desire to supply Japan, China, and Asia, and by the EPA. Toyota Tsusho deepened its strategic partnership with Nidera (see above) in 2012 when it bought 10% of Pentag Nidera Pty Ltd., a grain collector and exporter owned 51% by Nidera (Yushi 2015c). The shōsha, however, sold its stake to Nidera in 2015, as the latter (i.e. COFCO) took full control (Agrimoney.com 2015). Mitsubishi bought 80% of Olam Grain Australia in 2014 for $64 million US and renamed it Agrex Australia; by August 2017, Mitsubishi had 100% ownership (Agrex Australia n.d.; ABC News 2014). Mitsubishi thus gained a stake in the Newcastle Agri Terminal, a high-speed grain handling port facility which became operational in February 2014.

Russia Russia’s grain sector has attracted shōsha and Japanese government attention for several reasons. The most basic are Russia’s status and potential as a grain producer and exporter, and the proximity of farmland and harbors in the Far East Federal District (RFE) to Japan and Asia. The Russian government also stepped up encouragement of grain exports and foreign investment in agriculture around 2009, including by promoting a ‘Far East Grain Corridor’ to move grain by rail from western Siberia to eastern ports (Yoshida 2010; Nishimura and Soejima 2012; Promar Consulting 2013b, 36; Wegren, Nikulin, and Trotsuk 2015). Russian officials have expressed a preference for Japanese and South Korean over Chinese agricultural investment in the RFE (Zhou 2017). There has also been inter-governmental discussion of Japanese investment in agriculture in and grain exports from the RFE, including in relation to the status of four islands the Soviet Union seized from Japan at the end of World War II (Japan Times 2016). The obstacles to Japanese FAI, however, are formidable. They include poor storage and transportation infrastructure; the dearth of export facilities in Russia’s far east; the dubious investment environment; the imposition of Russia’s 2010 grain export ban; and the sanctions Japan imposed after Russia annexed Crimea. 2009–10 saw a flurry of shōsha interest in Russia (Yoshida 2010; Promar Consulting 2013b, 36, 60–61). In 2009, Sojitz partnered with the Russia Grain Union to promote grain exports to Asia, and planned to construct a grain terminal at Vostochny Port in Vrangel. Marubeni contracted to import 50,000 tons of grain to Japan from the RFE (Japan’s first Russian feedgrain imports since the Soviet Union’s collapse). It formed comprehensive alliances in 2010 with Amurzerno, a Khabarovsk-based grain originator, and Fetexim, a Vladivostok port logistics firm, aimed at improving grains distribution, stabiliz- ing supply, and exporting 400,000 tons of grain per year to Japan and Asia from 2013. All these initiatives faltered with the 2010 grain export ban. In November 2009, Itochu tied up with Siberia Agriculture Holdings, and in March 2010 began shipping Russian wheat to Taiwan (Yoshida 2010). There are reports that Sojitz tried and failed to grow wheat in far eastern Russia in 2009 (Promar Consulting 2013b, 61), and as noted above a shōsha was interested in investing in a farm that instead went with Hyundai Heavy Industries. Other projects began after 2010. In 2012, Mitsui bought 10% of Sodrugestvo, Russia’s biggest soybean meal producer, which has a large network of grain cars and storage facilities and a deep-water terminal in Kaliningrad; it also exports wheat (Sazonov 2012; Yushi 2015b, 28). 2012 also saw a small shōsha, Ebistrade, begin contracting RFE farmers to grow 26 D. HALL buckwheat on 170 hectares of land. Japan imports most of its buckwheat from China, and Ebistrade wanted eventually to import about 10,000 tons (10% of Japan’s demand). As of the October 2014 harvest, the company was hoping to make its first imports (Nishimura 2012; Bosutōku Tsūshin 2014). Ebistrade’s website states as of early 2019 that the company imports approximately 5,000 tons of buckwheat from Russia per year, but does not mention contract farming (Ebistrade n.d.). Finally, in March 2014 Marubeni signed a memorandum of cooperation with two Russian companies regarding studying expanding Russia’s grain exports to Asia, including through construction of a grain terminal at Zarubino, but I do not know whether anything has come of this (FESCO 2014; MAFF 2016a, 6). A 2018 survey of Japanese investment in the RFE refers to agricultural cooperation as ‘prospective’ (Petrunina, Kiba, and Shusharina 2018, 529).

China and other final markets This paper mostly discusses supply-side investments. The analysis is incomplete, however, without attention to long-term sales agreements and investments in processing (soybean crushing, flour mills, etc.) in importing countries (Hiraga 2018, 169–170). These initiatives support those in growing and sourcing by securing final markets and encouraging producers and originators to partner with Japanese firms, and help explain how Japan’s traders handle far more grain than Japan imports. The key importing country is, of course, China. While direct Japanese investment into soybean crushing in China seems (particularly in comparison to the surge of ABCD investment in the mid-2000s) to be limited (Hiraga 2016, 13), the shōsha have brought other techniques to bear. Marubeni started selling in China in a big way in 2008 (Kaiun 2009, 23), and partnerships were crucial. It formed one with Sinograin Oils & Fats to work together on grain supply and distribution in 2009, and strengthened its ‘bridgehead’ through a partnership with Sino- grain and Shandong Liuhe Group to construct feed processing plants (Marubeni 2009, 5–6; H. Yoshida 2011). Other shōsha have made similar deals and investments. Itochu formed a trading alliance with COFCO in 2008 (GRAIN 2008, annex; JFTC 2014, 100). Mitsui tied up with the large feed and stockbreeding company New Hope Group in 2009 (Wakita 2013, 157). Mitsubishi signed a supply contract for up to 5 million tons of soybeans per year with COFCO in 2011 (World-Grain.com 2012; for other shōsha investments in China see Wakita 2013, 157). Zen-Noh in 2011 formed a joint venture in Hong Kong with ACA to sell grains in China and Asia (Zen-Noh 2016,7–8). The shōsha have also invested in Southeast Asian flour mills and feed grain companies (Yushi 2015c, 33; Yushi 2015e,45–46).

Marubeni: a made-in-Japan grain major? Representatives of Marubeni, the top sōgō shōsha grain trader, made unusually pure and consistent statements of the economies of scale vision in the years after the food crisis, and I focus here on the period from 2009 to the conclusion of the Gavilon purchase in 2013; I brieﬂy note later developments in the conclusion.10 Marubeni frequently presented

10This section is based on Fujisawa 2012; Himeno 2008; Kaiun 2009; Lee, Jung, and Kim 2014; Marubeni 2009; Shūkan Daiyamondo 2009; Yamaguchi 2009; Murata 2012; Nikkei Business 2010, 2012; Yoshida 2011, 2012; Zaikai 2012. THE JOURNAL OF PEASANT STUDIES 27 itself as contributing to Japan’s ‘stable supply of grain’ or ‘food security’. By the late 2000s, though, the ﬁrm was concerned about being outbid (kaimake) by the grain majors and China. Food Division head Daisuke Okada said that ‘There’s no fear of Japan starving through not being able to secure food. But when it comes to negotiating power in trading, it’s a crisis situation’ (Nikkei Business 2010, 38). Observers saw a ‘Japan premium’ emerging in soybean markets as Japan’s relatively small demand and lack of alternative sources led traders like Cargill and ADM to charge Japanese buyers markups while China received discounts. For Okada, this indicated the dangers of continuing to take a client position relative to the grain majors. So what to do? Marubeni laid out its options and decision:

When considering how best to invest in the production of grain, there are two general strategies Marubeni can choose from. The first is to invest directly in the farms themselves. The other is to invest in the distribution of the products of those farms. Marubeni has chosen to invest in the latter. (Marubeni 2009,4) The goal was to construct a storage and distribution supply chain allowing direct purchases from farmers in a variety of countries, with a focus on the US and Brazil and to a lesser degree Australia, Russia and Ukraine. Kenji Himeno of Marubeni’s Grain Bureau argued that the shōsha needed to invest large amounts of capital in grain storage and to establish efficient transportation systems linking accumulation points to export harbors (2008). Logis- tics, too, were key: transportation makes up 20%–40% of the price of grain (Nikkei Business 2010, 38), so large volumes must be assembled in a timely fashion to make efficient (hope- fully just-in-time) use of contracted ships. Because Japan’s domestic demand could not generate the scale economies required to avoid kaimake, Marubeni had to procure grain for other countries, especially China. The Grain Bureau’sKōji Fukuda said that ‘It may look like we’ve steered towards supplying China, but our primary reason for doing that is to secure volume and quality for our Japanese customers’ (quoted in Kaiun 2009). By 2009 Mar- ubeni was already handling twice as much grain for foreign markets like South Korea and Taiwan as it was for Japan (Yamaguchi 2009, 94; see also Marubeni 2009,7). Journalist Keisuke Yamaguchi summed up: ‘Raising purchasing power in producing areas by increasing grain handling volumes: Marubeni’s strategy to become a [grain] major is simple and clear’ (2009, 94). The notion that Marubeni wanted to become a ‘made-in-Japan’ (wasei) or (after the Japanese flag) a hinomaru grain major received wide play in Japan’s business press. While Marubeni representatives said they did not seek to take on all the grain majors’ roles and planned to keep cooperating with and buying from them, Marubeni did aim to develop major-like procurement systems and, in Asada’s words, major-class trading volumes (Yoshida 2011). The Gavilon acquisition (the largest in Marubeni’s history) was central to these goals, and was both a consequence of and a further spur to Marubeni’s moves into China. As Topham and Niu (2014) put it, ‘The concept was simple: take Gavilon’s vast storage network in the Americas, combine it with Marubeni’s export capabilities to Asia, and sell corn, soybeans and wheat, to China.’ Gavilon ’s former owners reportedly decided to accept Marubeni’s bid because of the latter’s high sales volumes in China (11 million of the 25 million tons of grain the company handled) and its relationships there (Murata 2012). Marubeni linked this strategy to its lack of interest in farmland. The company magazine quoted above said the ‘chief’ reason the company was focusing on distribution was ‘the 28 D. HALL desire to avoid the high risk that comes with investing directly in farms’ (Marubeni 2009, 4). Okada implicitly critiqued the versions of the ‘direct supply’ vision that focus on land:

Investing in our own farmlands, producing grain, supplying Japan – I don’t think that’s a grain strategy. The place to put our competitive power is in ocean shipping rates. If we increase handling volumes, that in itself will see our ocean shipping transportation costs fall. (quoted in Yamaguchi 2009, 97) Similarly, when asked whether Marubeni was thinking of ‘developing idle agricultural land in places like Africa or Asia’, Asada responded: ‘We aren’t thinking of developing farmland at the moment. One reason we spent almost 300 billion yen buying Gavilon is that even without holding our own farmland and engaging in farming, we can get better results’ (quoted in Zaikai 2012). The zero-sum aspect of Marubeni’s strategy, ﬁnally, is illuminated not by Marubeni statements but by China’s response to the Gavilon deal. China carried out a lengthy review of the acquisition that raised concerns about its implications for the bargaining power of the country’s soybean crushers. The deal was approved only with conditions, including the requiriement that Gavilon and Marubeni keep selling soya to China as sep- arate companies and that they not share market information (Blas 2013).

Conclusions My goals in this paper were to document and explain post-2007 Japanese state and corporate engagement with overseas grain production and trading. On the documentation side, I have shown that this investment involved large numbers of deals and huge amounts of capital. The shōsha and Zen-Noh have increased their handling volumes and ability to source their own grains, and now sell large amounts of North and South American soybeans not just to Japan but to third countries including China. Japa- nese FAI has focused on the US, Brazil, Argentina and Australia, prioritized origination, storage, and distribution infrastructure over farming, and overwhelmingly preferred deals with existing companies to greenfield investments. The Japanese state has supported these projects in many ways, from direct financial support for certain projects to information provision to spearheading PRAI. Japanese FAI in grains has not, of course, been free of problems. Sojitz withdrew from its first Argentinian venture, Mitsui has struggled with earnings at Multigrain (Mitsui & Co. 2013c), and Marubeni has taken a large write-down on Gavilon and cut staff (Hubbard 2016) – not to speak of the ProSAVANA debacle. But early criticisms that ‘Japan’s’ response to the food crisis and land rush was less effective than that of, say, South Korea, are hard to sustain a decade later. What explains the characteristics of post-2007 Japanese strategies and investments? They were shaped, first, by the legacies of earlier decades, especially shōsha capacities, experience and relationships (including in the grain trade), and some hard-earned lessons about the risks of overseas grain farming; state engagement in securing Japan’s food supplies; and the simultaneous pursuit of the ‘global supply’ and ‘direct supply’ visions of Japan’s food security. The changes of the 2000s, including China’s rising soya imports, Japan’s dwindling share of world grain imports, the 2007–8 food crisis, and the land rush, rekindled interest in these two visions, but also prompted a third that saw THE JOURNAL OF PEASANT STUDIES 29 shōsha grain sales to other countries (especially China) as essential if Japanese firms were to stay in the game. Diverse goals, strategies and projects emerged from this combination of legacies, capabilities, pressures and opportunities. While the government’s guidelines hoped (in a framing that fits the treatment of countries as actors in Asian/MENA arguments) to see a comprehensive public-private approach to pursuing FAI for food security, there have been tensions and disputes over the goals and modalities of Japan’s foreign grain trade investments. Shōsha grain trade moves were under way before the FAI policies were formulated in 2009, and only a minority seem to have received direct state support (though the amounts involved were large). Working out the more indirect impact of state efforts on shōsha FAI (including Japanese negotiations with producing states, information provision, and informal state-shōsha coordination) would require further research. The government’s ability to present such varied initiatives together in the FAI reports may derive from the breadth of Japanese conceptions of how foreign investment supports food security, a capaciousness which makes it difficult to imagine FAI in grains that would not fit. All three visions have been very much in play in Japan’s grain trade engagement, and individual projects and policies can serve more than one of them. Some overall statements about their influence, however, can be made. The global supply vision endures especially in government projects and rhetoric, including in areas not directly related to FAI. The need to secure direct supplies of grain (including non-GMO soya) for Japan continues to be articulated by state and corporate actors, and has motivated initiatives like NEXI’s insurance of Japanese bank provision of working capital to Brazilian and Argentinian concerns in exchange for commitments to supply Japan. Even here, however, the fit with the ‘Asian/MENA’ conceptions that focus on direct farmland acquisitions is awkward, as efforts often employ mechanisms other than buying or leasing farmland. The large shōsha farmland acquisitions in Brazil (Mitsui/Multigrain, Mitsubishi/Agrex, and Sojitz/CGG), too, supply China and other Asian markets along with Japan. Marubeni, Japan’s largest grain trader, rejects farming grain. While the global and direct supply visions have thus helped to direct Japan’s post-2007 FAI, it is the twin core propositions of Marubeni’s approach to the grain trade that best capture the overall approach: concentrate on origination and trading (notably storage and transportation infrastructure) rather than farming, and sell as much grain as possible to third country markets, especially China. This vision brings corporate profitability and Japan’s food security more directly into connection than do the other two by means of the initially counter-intuitive argument that the shōsha can only stably supply Japan by maximizing sales to other countries. I have, however, seen few if any direct government statements of the need to sell to China; as noted above, government writings often leave the final destination of crops produced and/or traded through Japanese FAI vague, and highlight contributions to global, Japanese, or Asian rather than specifically Chinese food security. This is not surprising; given tensions between the two countries, it is difficult to envisage the Japanese government framing things the way that Marubeni does. The shōsha are, however, central to all three visions of FAI, and the extent to which they can maintain their implicitly zero-sum approach to the global grain trade as China comes to take more control over its imports will be a central determinant of the future of Japan’s globalizing national food security visions. 30 D. HALL

Acknowledgements A much earlier version of this paper was written for the conference ‘Land Grabbing: Perspectives from East and Southeast Asia’, Chiang Mai University, 5–6 June 2015, and I have presented related work at Cornell University, Roskilde University, University of Massachusetts Boston, and the Univer- sity of Toronto. I am grateful to the participants in and organizers of those events, to two reviewers for JPS, and to Jennifer Clapp, Ariane Goetz, Eric Helleiner, Midori Hiraga, Takeshi Ito, Sarah Martin, Anders Riel Muller, and Kana Okada for their comments and suggestions, and to Matt Gaudreau for his comments and research assistance. All errors are my own.

Disclosure statement No potential conﬂict of interest was reported by the author.

Funding This work was supported by a Short-Term Research Grant from Wilfrid Laurier University.

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Derek Hall (PhD in Government, Cornell University) is Associate Professor in the Department of Pol- itical Science and the Balsillie School of International Aﬀairs at Wilfrid Laurier University. His research focuses on the political economy of food, agriculture, land and environment in Japan and Southeast Asia. He is the author of Land (Polity, 2013) and, with Philip Hirsch and Tania Murray Li, of Powers of Exclusion: Land Dilemmas in Southeast Asia (NUS Press and University of Hawai’I Press, 2011).