Causes of decline in the Japanese tulip bulb industry
2019
Niisato, Y. | Takeda, T.
The peak year for tulip bulb production in Japan was 1993. Since then, however, production has continued to decrease. One of the reasons for this decline is the increased import of low-priced bulbs from the Netherlands after the relaxation of the quarantine in 1988. Recently, however, both imports as well as domestic production have declined. In this paper, we analyze the causes of this decline. We look at two periods - 1993 to 2001 and 2001 to 2015 - due to the difference in production and imports. We analyze causes that affect price and quantity of tulip bulbs from shifts in the supply and demand curves. We examine demand factors such as prices of substitutes and complements for bulbs, prices of consumer goods, national income and demand shocks (change in preference of flowers such as a gardening boom, expected income and population). Supply factors (domestic production and imports) include prices of complementary crops, substitute crops, production factors (material inputs and labor), capital input, supply shocks (e.g. weather) and import conditions (e.g. exchange rate). The main influential factors under demand conditions are pessimistic expectations of future income owing to the long-term depression and negative changes in people's preference for flowers and plants, whereas under supply conditions, the main influences include the decline in Japanese agriculture, pessimistic prospects for the tulip bulb sector and the Dutch exporters' shift to the Chinese market.
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