In Japan 7 Eleven is Investing in Farmland

Convenience store chains Lawson Inc. (2651) and Seven & I Holdings Co. (3382) are so sure Japan’s aging farmers can’t meet demand for fresh vegetables that they’re investing in cropland and training young people to work the fields.

Takeshi Niinami, who heads an agricultural reform committee advising Prime Minister Shinzo Abe and is the chief executive officer of Lawson, the nation’s second-largest operator, started 12 farming joint ventures since 2010 and plans 28 more.

He’s expanding as Abe cuts subsidy payments to food-rice growers and creates land banks to consolidate small holdings into large tracts that can be leased by companies as older farmers put down their plows. The prime minister has also floated the idea of establishing special economic zones this year, which could test majority corporate ownership of farmland, something that’s blocked by current laws.

“Farm output will keep falling unless we take action,” said Yayoi Sugihara, a spokesman for Lawson in Tokyo. “We want to bring on young farmers to become professional producers.”

For Lawson, Seven & I’s 7-Eleven outlets and Itochu Corp.’s partly owned FamilyMart Co., a growing appetite for fresh fruit and vegetables means more frequent customer visits. Lawson estimates shoppers who drop in to buy perishable items visit its stores about twice as often as others and spend 20 percent more.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza