VII Sweetpotato Distribution and Pricing

As sweetpotatoes are used in a wide range of markets, from household consumption to processed foods, starch-related products, and alcohol, unique systems have evolved to distribute them to end users. With sweetpotatoes for household consumption, most of which are supplied to consumers by way of marketing systems, there are significant differences between wholesale and consumer prices. This is an inherent problem that must be solved if demand is to improve from current levels.

1. For fresh consumption

(1) Most vegetables intended for fresh consumption are distributed through markets. Some are traded directly between producers and retailers, as in "Seikyo" [Consumers' cooperative (Co-op)]. But the basic route is as follows:

Producers (harvest) > JA [agricultural cooperatve] (selection, shipment) > vegetable companies, markets > dealers > retailers > consumers

With sweetpotatoes, however, unlike potatoes, JA-affiliated bodies have less influence; instead, farmer-level voluntary marketing cooperatives, traders having curing facilities who buy up sweetpotatoes in producing areas, and trading companies have a large share. Thus the form of distribution varies by district. (For information on curing, refer to "X. Cultivation Methods, 7. Storage, (2) Curing storage")

(2) In Kagoshima Prefecture, for instance, sweetpotatoes are sorted into three grades (A-C) based on shape, and into seven grades (4L to 2S) based on size. While pricing is generally determined through bidding, some markets employ person-to-person dealing instead. In the final stage of distribution, the sweetpotatoes are sold, via intermediate wholesalers, to general supermarkets, greengrocer supermarkets and retailers, prior to consumption in households across Japan.

(3) In terms of shipping patterns, sweetpotatoes produced in Chiba Prefecture are shipped mainly to the Kanto area, those produced in Ibaraki Prefecture to areas north of Kanto, those produced in Tokushima Prefecture to Osaka, and those produced in Kagoshima Prefecture to Nagoya and Fukuoka markets.

○ Prices of table sweetpotatoes by market

(Unit; yen/kg)

Year	Producer price	Wholesale price		Retail price
		Tokyo	Osaka	Tokyo	Osaka
1991	275	184	275	590	847
1992	266	241	352	690	875
1993	313	230	321	665	866
1994	223	187	304	629	876
1995	193	151	228	536	802
1996	193	187	305	559	903
1997	166	176	295	524	867
1998	176	197	277	537	789
1999	200	198	265	543	784

Note:	1) Producer prices are from the "Survey on Prices and Wages in Farming Villages"; wholesale prices from "Monthly Report of the Central Wholesale Market" and "Survey on Retail Prices".
	2) Since sampling methods for data used in the analyses differ, the prices for each year are taken from the same sample. (Producer prices are higher than wholesale prices in this table).

○ Historical change in price indexes by month and market (1990-1999 average)

2. For processed foods and shochu

Distribution practices for this segment of the market vary with intended use. For primarily processed foods such as mushikiriboshi, flakes, frozen diced sweetpotatoes and shochu, a contracted production system with processing manufacturers is employed in many cases. As with sweetpotatoes for fresh consumption, farmers' voluntary marketing cooperatives, large-scale farmers who also collect and ship products, and specialized collecting/shipping traders all participate in distribution. For instance, a top processing food company in Kagoshima Prefecture collects about 50% of the sweetpotatoes produced in the prefecture for processed foods, under contracts with 4 JAs and 8 collecting traders. In addition to such arrangements, many confectionery makers, mostly small and medium-sized companies, obtain sweetpotatoes from the market.

3. For starch-related products

To deal with sluggish demand for starch, planned production was started in 1984. Most raw material is processed to starch either in JA-affiliated starch factories, using sweetpotatoes obtained directly from local farmers or from a JA, or in starch industrial associations using sweetpotatoes obtained via collecting traders.

Based on the Law for Stable Prices of Agricultural Products, sweetpotatoes for starch-related products are purchased by national agreement at a price no lower than the standard price for raw material (25,278 yen/ton for the 1999 harvest year) set by the government. Within this framework, starch made from such potatoes is purchased by the government when appropriate, to support producer prices.