Agricultural Policy Monitoring and Evaluation 2024

16. Japan

Main findings

Support to agriculture

Japan has reduced its support to agriculture notably over the past decades. Support to producers (PSE) as a share of gross farm receipts declined to 33% in 2021-23, down from 54% 20 years earlier but still twice the OECD average. Total support (TSE) for the agricultural sector was estimated to be 0.8% of Japan’s Gross Domestic Product (GDP) in 2021-23.

Market Price Support (MPS) remains the main element of Japan’s agricultural support due to border measures, particularly for rice, pork, and milk. Slightly lower domestic prices and rising border prices, together with a depreciation of the Japanese yen (JPY) have contributed to reduce the share of MPS in producer support since 2022, particularly for rice and pork. Still, average producer prices overall are 38% higher than world reference prices in 2021-23. Budgetary support to producers consists mostly of payments based on area, income, or output. The share of potentially most-distorting support declined since 2010 but still accounted for 79% of PSE in 2021-23.

Expenditures for general services (General Service Support Estimate, GSSE) accounted for 26% of Japan’s total support to the sector in 2021-23. GSSE corresponds to almost 13% of the value of agricultural production, higher than the OECD average but lower than in the 2000s. About 80% of the GSSE goes to developing and maintaining agricultural infrastructure (particularly irrigation), while 11% goes to financing the agricultural knowledge and innovation system.

Key recent policy changes

The Biodiversity Strategy of the Ministry of Agriculture, Forestry and Fisheries (MAFF) was revised and released in March 2023 in response to the Kunming-Montreal Global Biodiversity Framework (KM-GBF). The new strategy defines the 2030 vision and approaches to tackling biodiversity-related issues in the agriculture, forestry and fisheries sectors. The strategy calls for more efforts in reducing the impact of agriculture, forestry and fisheries on the global environment and facilitating collaboration for biodiversity conservation within the whole food supply chain. The strategy is also reflected in the National Biodiversity Strategy and Action Plan of Japan 2023-2030 (NBSAP), which was approved by the cabinet in March 2023.

A revised “Food Security Reinforcement Policy Framework” was adopted in December 2023. This policy framework, originally released in December 2022, presents a roadmap to ensure a stable food supply, and sets several targets to facilitate structural transformation by increasing production and use of domestic resources. The revision expanded targets such as facilitating adoption of smart technologies and securing stable imports.

To reduce excessive dependence on imported raw materials for chemical fertiliser, MAFF allocated supplementary budgets of JPY 6.8 billion (USD 48.4 million) for measures promoting the use of domestic organic fertilisers. The main measures include payments to livestock farmers and compost manufacturers to support the manufacture of fertiliser pellets made from composted livestock manure. MAFF also provided support to cover the costs of pilot projects for the use of domestic materials such as sewage sludge in fertiliser and to strengthen networks of raw material providers, fertiliser producers, and fertiliser users to expand practical use of domestic fertilisers.

Japan experienced a range of natural events that caused extensive damage to agriculture, forestry and fisheries operations. This includes a series of torrential rains and flooding in June and July 2023, typhoon Lan in August 2023, and a magnitude 7.6 earthquake in the Noto Peninsula on 1 January 2024. Measures for restoration efforts in the sector included covering expenses required for removal sediments and disaster waste, providing financial support for the reconstruction and repair of damaged agriculture buildings and machinery, and grants for “direct payment to farmers in hilly and mountainous areas” and “multifunctional payment” for restoration of damage to farmland or agricultural waterways and joint use facilities in rural communities.

Assessment and recommendations

• Japan’s food system policy, the MIDORI Strategy, is a promising sector-wide initiative to accelerate sustainable productivity growth through innovation. In particular, the MIDORI Act supports producers and business operators working on reducing their environmental burden by incentivising the adoption of environmentally friendly practices and technologies. This initiative should be complemented by further efforts in promoting R&D, networking, capacity-building, strategic advice, and multi-actor partnerships.

• Japan has made progress in reforming agricultural support policies since the early 2000s but the relative support to producers remains twice the OECD average and continues to be dominated by MPS, which distorts markets and contributes to high food prices. Reducing MPS and other commodity-specific support can encourage agricultural and rural innovation, speed up needed structural change, and improve environmental sustainability.

• Japan sees Smart Agriculture and digitalisation as a way to boost sustainable productivity growth. Aligning these efforts with support for skills development and knowledge transfer will further help farmers to reap the benefits of technological innovations. Agricultural education, training and extension systems should keep track of technology and industry developments to be sure to provide farmers with the right skills and knowledge.

• Comprehensive financial safety nets for farmers, such as a revenue insurance programme, have played an important role in mitigating the risk and damage from natural disasters. Given that Japan faces various challenges such as ageing and depopulation in rural areas and expects more frequent and intense climate-related disasters, efforts to prepare wide-ranging programmes such as improved warning systems and better flood control to build the sector’s resilience should be strengthened.

Development of support to agriculture

Figure 16.1. Japan: Development of support to agriculture

Table 16.1. Japan: Estimates of support to agriculture

Million USD

	1986-88	2000-02	2021-23	2021	2022	2023p
Total value of production (at farm gate)	72 767	76 354	70 845	80 521	68 490	63 525
of which: share of MPS commodities (%)	68.36	63.81	67.37	67.31	67.30	67.49
Total value of consumption (at farm gate)	94 458	107 904	101 824	117 687	97 281	90 504
Producer Support Estimate (PSE)	44 611	43 964	25 818	32 717	23 346	21 391
Support based on commodity output	40 996	40 837	19 839	26 871	16 479	16 166
Market price support¹	39 458	38 480	18 269	25 083	14 911	14 813
Positive market price support	39 458	38 480	18 269	25 083	14 911	14 813
Negative market price support	0	0	0	0	0	0
Payments based on output	1 539	2 358	1 570	1 788	1 568	1 353
Payments based on input use	1 434	976	1 258	738	2 313	724
Based on variable input use	403	85	507	10	1 472	39
with input constraints	403	85	0	0	0	0
Based on fixed capital formation	890	724	476	391	634	404
with input constraints	403	85	0	0	0	0
Based on on-farm services	142	167	275	336	208	280
with input constraints	0	0	0	0	0	0
Payments based on current A/An/R/I, production required	621	613	1 872	1 990	1 918	1 708
Based on Receipts / Income	0	0	283	178	348	323
Based on Area planted / Animal numbers	621	613	1 589	1 813	1 570	1 386
With input constraints	0	0	1 226	1 356	1 199	1 123
Payments based on non-current A/An/R/I, production required	0	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	1 560	1 538	2 849	3 118	2 636	2 793
With variable payment rates	0	0	0	0	0	0
with commodity exceptions	0	0	0	0	0	0
With fixed payment rates	1 560	1 538	2 849	3 118	2 636	2 793
with commodity exceptions	1 560	1 257	2 643	2 883	2 437	2 607
Payments based on non-commodity criteria	0	0	0	0	1	0
Based on long-term resource retirement	0	0	0	0	1	0
Based on a specific non-commodity output	0	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0	0
Miscellaneous payments	0	0	0	0	0	0
Percentage PSE (%)	57.42	53.62	32.61	37.11	30.35	30.51
Producer NPC (coeff.)	2.24	2.07	1.38	1.51	1.32	1.34
Producer NAC (coeff.)	2.35	2.16	1.48	1.59	1.44	1.44
General Services Support Estimate (GSSE)	8 769	12 141	8 943	10 374	9 216	7 238
Agricultural knowledge and innovation system	514	861	935	1 044	896	866
Inspection and control	55	66	104	111	82	118
Development and maintenance of infrastructure	7 747	10 620	7 176	8 384	7 155	5 989
Marketing and promotion	152	248	622	719	985	161
Cost of public stockholding	301	345	105	115	98	103
Miscellaneous	0	0	0	0	0	0
Percentage GSSE (% of TSE)	16.29	21.66	25.83	24.07	28.30	25.28
Consumer Support Estimate (CSE)	-53 525	-49 487	-26 518	-35 762	-21 708	-22 083
Transfers to producers from consumers	-38 964	-38 469	-18 712	-25 875	-15 217	-15 042
Other transfers from consumers	-14 520	-11 104	-8 244	-10 578	-6 847	-7 308
Transfers to consumers from taxpayers	-108	35	5	5	4	4
Excess feed cost	68	51	434	686	353	262
Percentage CSE (%)	-56.73	-45.82	-25.72	-30.39	-22.32	-24.40
Consumer NPC (coeff.)	2.31	1.85	1.35	1.45	1.29	1.33
Consumer NAC (coeff.)	2.31	1.85	1.35	1.44	1.29	1.32
Total Support Estimate (TSE)	53 272	56 139	34 765	43 096	32 567	28 633
Transfers from consumers	53 485	49 573	26 956	36 453	22 064	22 350
Transfers from taxpayers	14 308	17 670	16 054	17 221	17 349	13 590
Budget revenues	-14 520	-11 104	-8 244	-10 578	-6 847	-7 308
Percentage TSE (% of GDP)	2.06	1.24	0.77	0.86	0.77	0.69
Total Budgetary Support Estimate (TBSE)	13 814	17 659	16 496	18 014	17 656	13 820
Percentage TBSE (% of GDP)	0.53	0.39	0.37	0.36	0.42	0.33
GDP deflator (1986-88 = 100)	100	105	99	98	98	101
Exchange rate (national currency per USD)	147.09	118.19	127.23	109.77	131.43	140.51

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for Japan are: wheat, barley, soybean, rice, sugar, milk, beef and veal, pig meat, poultry, eggs, apples, cabbage, cucumbers, grapes, mandarins, pears, spinach, strawberries and Welsh onions.

Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

Legal and strategic frameworks

The Basic Plan for Food, Agriculture and Rural Areas revised in 2020 (hereafter “the 2020 Basic Plan”) sets Japan’s agricultural policy direction for the next decade. The 2020 Basic Plan aims to ensure a stable food supply and improved food self-sufficiency and continues necessary agricultural policy reforms both to make the sector competitive and manage issues facing the sector, while putting an increased emphasis on rural communities, smart agriculture and digitalisation, and risk management (e.g. with respect to natural disasters).

The Strategy for Sustainable Food Systems, MIDORI (hereafter the MIDORI Strategy), formulated in May 2021, defines the path to transform Japan’s food systems and increase the agriculture and food systems’ sustainability and productivity potential by 2050. This strategy involves: 1) enhancing engagement of stakeholders at each stage of food supply chains; and 2) promoting innovation to reduce environmental burdens. It sets 14 Key Performance Indicators (KPIs) to be achieved by 2050 through promoting the development and implementation of innovative technologies and production systems as well as enhancing efforts at each stage of inputs, production, processing and distribution, and consumption. More specifically, the agriculture-related KPIs include:

• Zero CO₂ emission from fossil fuel combustion in the agriculture, forestry and fisheries sectors

• 50% reduction in risk-weighted use of chemical pesticides1

• 30% reduction in chemical fertiliser use

• Increase of organic farming area to 1 million ha (equivalent to 25% of farmland)2

• 30% improvement of labour productivity in food production, including through automation (by 2030)

• Sustainable sourcing for import materials (by 2030)

Domestic farm support programmes

Japan maintains a system of border protection and domestic price support for key agricultural products. Average tariffs on agricultural products were 13.4% in 2022, compared to 2.4% for non‑agricultural products. However, agricultural tariffs vary considerably. More than 35% of tariff lines are duty-free, but 2.3% of them are above 100% (ad valorem equivalent), while 13.1% of agricultural tariff lines have non-ad valorem tariffs (WTO, 2023[1]). Tariff rate quotas (TRQs) with high out-of-quota tariffs apply to some commodities, such as starch and dairy products.

Rice imports are managed by a state trading enterprise, fulfilling Japan’s minimum-access commitment under the WTO Agreement on Agriculture. A TRQ of 682 200 tonnes (milled) applies. The maximum mark-up (collected by the government when importing and selling on domestic markets) for rice imports is set at JPY 292 (USD 2.1) per kg, and the out-of-quota tariff-rate is JPY 341 (USD 2.4) per kg.

A revenue-based payment is available for farmers meeting certain requirements who produce rice, wheat, barley, soybean, sugar beet and starch potato. The payment covers 90% of the difference between current revenue and a benchmark based on the previous five years’ revenues, with the cost shared between the government (75%) and the farmers’ reserve fund (25%).

The direct support payment for upland crops (wheat, barley, soybean, sugar beet, starch potato, buckwheat and rapeseed) is based on both area and output. The area-based payments are based on current planting, and output-based payments according to the volume of sales and the quality.

A crop diversification payment goes to farmers who switch their use of paddy fields from table rice production to other crops (wheat, soybeans, or rice for feed and processing). This payment is area-based, but output is also taken into account for rice for feed and flour. Within this crop diversification programme, a payment is also provided to municipal governments if the production area employs high-yield rice variety for feed and processing, or cultivates buckwheat or rapeseed.

The Livestock Stabilisation Programme, known as Marukin, provides support payments to beef cattle and hog producers when the standard sales price falls below the standard production cost. Ninety per cent of the difference between costs and sales prices are paid to producers, to which the government contributes 75% and the rest are provided by the producers’ reserve fund. Apart from the Marukin, output-based compensation goes to producers of raw milk used for dairy processing.

Agricultural mutual aid is a form of commodity insurance that is voluntary and available for a range of commodities (rice, wheat, barley, livestock, fruit, and other field crops) and horticultural facilities. It covers yield losses, damage to facilities from pests and natural disasters, losses caused by death or culling of livestock and veterinary expenses. Crop quality losses are also insured for some agricultural products including rice, wheat, barley, and fruit. Government support covers around 50% of the insurance premium.

In 2019, Japan launched the non-product specific revenue insurance programme. The programme compensates the loss of farm revenue stemming from both market and natural causes, relative to a benchmark based on the previous five years’ revenues. The government supports 50% of the insurance premium and 75% of the reserve fund. Farmers must choose between participating in the agricultural mutual aid programme or revenue insurance programme to avoid duplicate payments.

Japan provides financial support to young farmers (under 50 years old) during a training period and initial operation period. Annual subsidies are also available for agricultural management entities to employ and train young farmers.

The Agricultural Land Act authorises Agricultural Committees in municipalities to manage agricultural land use. Purchasing, selling and leasing of agricultural land need to be approved by the Committee. In 2014, farmland banks were established in all prefectures to promote the accumulation and concentration of agricultural land. The farmland banks have the role of lending out concentrated agricultural land to business farmers and improve agricultural land conditions and infrastructure (expansion of plots, investment in drainage equipment, etc.) as necessary. The government provides financial support to regions that lease agricultural land to the farmland banks and co-operate in accumulation and concentration of agricultural land. In addition, MAFF revised the “Act on Promotion of Improvement of Agricultural Management Foundation” in April 2023 and under the Act, municipalities formulate “Regional Plan” through discussions between farmers and local people. This plan can be a blueprint for regional agriculture that clarifies the future use of farmland and contribute to accelerating the accumulation and concentration of agricultural land.

Public investment in rural and agricultural infrastructure is a core agricultural policy, including agricultural roads, dams and irrigation and drainage facilities. The government also invests in natural disaster preparedness and restoring farm infrastructure, as well as constructing public health and recreational facilities associated with agriculture.

About 40% of total agricultural land and total agricultural output are located in hilly and mountainous areas. Area-based direct payments go to farmers in these areas to compensate for the physical disadvantages of these locations for agricultural production to prevent this land from being abandoned. Other payments are available to support collective engagement of local stakeholders in maintaining the multifunctional roles of agriculture.

Japan has defined an agricultural greenhouse gas (GHG) emissions reduction target of 49.5 MtCO₂eq by 2030. GHG mitigation efforts in agriculture are conducted mostly via support payments, grants, credits or non-financial services. For instance, direct payments for environmentally friendly agriculture are provided to farmers who conduct GHG mitigation activities, such as applying compost and extending midseason drainage in paddy field. These activities must be in conjunction with synthetic fertilisers and pesticides use that is less than half of that of conventional farming practices in the region. The government provides investment support for farmers using climate-smart technologies such as renewable energy and biomass-based greenhouse heating systems in horticulture.

Trade policies

Japan is currently a party to 20 Economic Partnership Agreements (EPAs) and other trade agreements, including with Singapore, Mexico, Malaysia, Chile, Thailand, Indonesia, Brunei Darussalam, the Association of Southeast Asian Nations (ASEAN), the Philippines, Switzerland, Viet Nam, India, Peru, Australia, Mongolia, the European Union, the United States, the United Kingdom, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the Regional Comprehensive Economic Partnership (RCEP). In addition, Japan is engaged in EPA negotiations with Colombia, Türkiye, Bangladesh, and the Gulf Cooperation Council (GCC), as well as in negotiations for the plurilateral free trade agreement with the People’s Republic of China (hereafter “China”) and Korea.

Innovation for sustainable productivity growth

Strategic planning

Sustainable productivity growth is the core of the MIDORI Strategy. The strategy aims to boost productivity and sustainability of agriculture, forestry, fisheries and food industries in Japan through innovation. To facilitate the implementation of the MIDORI Strategy, the Act to Promote Low Environmental Impact Business Activities for the Establishment of Environmentally Harmonized Food Systems (hereafter the MIDORI Act) entered into force in July 2022. This Act supports producers and business operators working on reducing their environmental burden.

Under the MAFF, the Agriculture, Forestry and Fisheries Research Council (AFFRC) is responsible for planning and implementing relevant technology R&D policies. AFFRC formulates the Innovation Strategy for Agriculture, Forestry and Fisheries Research every year. The Innovation Strategies of 2023 and 2024 prioritise the following two goals: facilitating R&D to achieve the KPIs in the MIDORI strategy; and accelerating the implementation of Smart Agriculture to mitigate labour shortages. AFFRC co-ordinates, examines and evaluates R&D conducted by public agricultural research organisations such as National Agricultural Research Organisations (NARO) and Japan International Research Centre for Agricultural Sciences (JIRCAS), universities, other public R&D agencies, and some private companies. AFFRC also manages competitive research grants.

Programme implementation

At farm, sector, rural and global levels, MAFF funds a wide variety of actions to foster innovation, to share information about new innovative technologies and practices, and to incentivise producers to adopt them. MAFF’s rural development policy also supports innovation and economic diversification. For instance, Support for Innovations from Rural Areas is a scheme launched in 2022 to create new businesses and added value by using local resources. The scheme supports those who seek diversification by facilitating investment and building platforms among entrepreneurs. Having multiple sources of income can stabilise incomes and provide new opportunities. Income sources could include farm tourism, food processing, and renewable-energy production. Inter-sectoral collaboration is key for these to succeed.

The MIDORI Act established a certification system to encourage the adoption of environmentally friendly practices and technologies. Producers can be certified by the prefectural and municipal governments by developing an implementation plan for environmentally friendly activities in co‑ordination with the Basic Plan of their region.3 Business operators, which provide technologies, machinery and services that help producers reduce the use of chemical fertilisers and pesticides, or expand organic farming and other environmentally friendly practices, can be also certified by the MAFF. As of March 2024, more than 5 700 producers and 64 business operators have been certified. These certified producers and business operators are eligible for tax incentives and financial benefits.

Labelling for environmentally friendly agricultural products: in line with the MIDORI Act, MAFF launched the Visualization Labelling scheme in March 2024. Under the scheme, MAFF has developed a simple calculation tool and relevant guidelines for farmers to evaluate their efforts for reducing GHG emissions using primary data on their farming practices. Through MAFF’s website, farmers can access to the calculation sheet, where the formula and relevant data that take into account the differences of each region have been pre-installed to calculate the GHG emission. The scheme covers 23 commodities including rice, vegetables and fruits. The label indicates avoided emissions compared to the estimated emissions of conventional farming in the region by 5% with one star, by 10% with two stars and by 20% or more with three stars. For rice, farmers’ efforts to conserve biodiversity can also be evaluated and indicated through the labelling in accordance with the guidelines. In advance of launching the scheme, MAFF conducted a pilot project of selling products with a label to communicate the GHG reduction efforts, resulting in a total of 789 co-operating retail outlets as of March 2024.

Research and Innovation

Japan funds a wide variety of R&D and dissemination programs aimed at improving sustainable agricultural productivity growth. National Agricultural Research Organisations (NARO) is the largest knowledge generator in the field of agricultural science in Japan. NARO has more than 1 700 researchers among its 3 200 staff, 21 research centres and departments including five regional agricultural research centres, and an annual budget of JPY 74 billion (USD 526.7 million). In the current medium-term operational plan (2021‑25), NARO sets four research segments: “agri-food business”, “smart production systems” “agri-biosystem”, and “robust agricultural system”. The second and fourth segments are highly linked and relevant for sustainable productivity growth by e.g. facilitating a digital shift of production environment management and conducting data-driven pest and weed control technology for stable crop production.

In April 2021, NARO established the Core Technology Research Headquarters (CTRH) as an organisation consisting of four research centres to strengthen R&D on AI, data, agricultural robotics, genetic resources, and advanced analysis. CTRH promotes the development and utilisation of advanced technologies and research infrastructure, which are combined with agricultural and food industry technologies of other research centres, thereby accelerating NARO’s R&D and contributing to the realisation of “Society 5.0” in the agricultural and food fields.4

Co-operative Agricultural Extension Service Programmes: prefectural governments deliver public agricultural extension services as an integrated system with prefectural agricultural research organisations. Traditionally, prefectural agricultural research centres developed breeding and farming techniques, and agricultural extension offices in each prefecture incorporated them into farming. As of 2022, there are about 7 200 prefectural extension advisors working in 361 extension service offices which cover 117 branch offices in Japan. MAFF provides guidelines for agricultural extension services and controls the quality of the prefectural extension advisors. Prefectural extension advisors need to pass a MAFF qualification examination. Prefectures receive subsidies from the national government that cover 5% of the cost of agricultural extension services. Additionally, there are several measures to support e.g. pilot studies in which extension advisors are required to participate and collaborate with researchers for testing environmentally friendly farming practices and smart technologies.

In 2012, MAFF introduced a system of Agricultural Innovation Support Experts to respond to the technical needs of advanced professional farmers. All prefectures established an agricultural innovation support centre, and as of 2023 a total of 629 agricultural innovation support experts are working among the prefectural extension advisors having a high level of technical knowledge and coordination capacity. For instance, 95 of them are specialised in Smart Agriculture.

MAFF offers an open innovation platform, called Field for Knowledge Integration and Innovation (FKII). The FKII encourages networking and collaboration among various industries and fields such as private firms, producers, universities and R&D institutions. As of January 2024, it has 4 974 members and 176 R&D groups which create research strategies and business models for specific purposes, carry out R&D, and commercialise its results. For instance, “the platform for new livestock production systems using ICT” was established in 2017 under the FKII, and the collaboration among ICT vendors, electronics manufacturers, universities, research institutions and producers has created the new milking barn system, which incorporates cutting-edge technologies such as robots and AI to improve productivity and animal welfare. It is already on sale as a packaged product and is in operation at more than ten dairy farms nationwide.

As part of the Small Business Innovation Research (SBIR) that contributes to sustainable productivity growth, MAFF recently established the Comprehensive Support for Startups. This start-up funding provides step-by-step and systematic support to researchers at universities and research institutes from the development of technology seeds (defined as Phase 0) to efforts toward commercialisation (from Phase 1 to 3). A project for Phase 3, the final stage of commercialisation, was launched in 2023. In the first public competition, out of 111 applications 25 projects were selected covering topics such as smart agriculture, circular economy, and genome editing.

Since 2022, MAFF has conducted and led cultivar development and R&D to help increase the adoption of organic farming and to reduce the risk-weighted use of chemical pesticides and chemical fertilisers, among other things listed as the KPIs in the MIDORI Strategy. To make producers aware of new innovative technologies and varieties, MAFF published “Strategy for Sustainable Food Systems ‘MIDORI’ Technology Catalogue (Ver.3.0)” in May 2023 to promote 225 available technologies and 81 to be developed by 2030, which can contribute to achieving the MIDORI Strategy’s KPIs.

The ASEAN-Japan MIDORI Cooperation Plan, adopted at the first ASEAN-Japan Ministers of Agriculture and Forestry Meeting (AJMAF) on 4 October 2023, aims to foster co-operation projects with ASEAN countries by utilising Japanese technology and sharing experience to build resilient and sustainable agriculture and food systems in the ASEAN region and, ultimately, to contribute to food security in the region. The ASEAN Member States (AMS) and Japan focus on the suitability and necessity of technologies in pursuing resilient and sustainable farming in implementing the co-operation between AMS and Japan which commonly share the regional particularities such as high humidity and temperature, abundance of paddy fields, and small- and medium-sized farmers.

To accelerate application of agricultural technologies which can contribute to enhance production potentials and achieve resilient and sustainable food systems in Asia-Monsoon region, MAFF assigned JIRCAS to conduct the project “Accelerating application of agricultural technologies which enhance production potentials and ensure sustainable food systems in the Asia-Monsoon region” from 2022 to 2025. The International Centre for the MIDORI Strategy, established as a networking hub, started dissemination of the information of scalable technologies for the region under the advice of the International Scientific Advisory Board for the MIDORI Strategy. As one of the activities, “Technology catalogue Contributing to Production Potential and Sustainability in the Asia-Monsoon Region (ver.2.0)”, showcasing 31 scalable technologies, was released by the centre. The collaborative research activities have also been conducted in some Asia-Monsoon countries to demonstrate the application of scalable agricultural technologies such as BNI (Biological Nitrification Inhibition)-enabled wheat, AWD (Alternate Wetting and Drying), and rice blast differential system utilizing the research networks of Japanese agricultural research institutes.

Smart agriculture and digitalisation

Accelerating the implementation of smart agriculture and digitalisation is one of the key objectives of the 2020 Basic Plan to address labour shortages and improve productivity.5 For example, efforts are being made to automate farm work and contribute to labour savings by utilising a smartphone-operated paddy field water management system, and agriculture management applications linked to location information will make it easier such that even unskilled farmers can take the initiative in production activities by digitising and automating work records.

In June 2022, MAFF revised the Smart Agriculture Promotion Comprehensive Package. The revisions clarify the roles of smart agriculture for stable and sustainable domestic food production. The document identifies specific measures necessary to reach the digital agriculture target of having “most of the business farmers in Japan practice data-driven agriculture by 2025.” These measures include conducting demonstration projects and providing training opportunities.

• Smart agriculture demonstration projects, started in 2019, aim to promote field implementation of smart agriculture that utilises cutting-edge technologies such as robotics, AI, and IoT. The project offers selected farms to introduce advanced technologies by making an agreement to provide farm management data in return for free access to the technologies. Collected farm data are analysed to measure impacts of technology adoption, and results are open to public to disseminate knowledge and experience. As of 2023 a total of 217 demonstration projects have been conducted in different regions covering different farm types such as paddy rice, vegetables, horticulture, tea production, and livestock. Demonstrated technologies include autonomous tractor, drones for spraying pesticides, smartphone-operated paddy field water management system, and cattle GPS tracking system.

• As the use of smart agriculture continues to advance in agricultural settings, it is important to increase opportunities for learning and training about smart agriculture at agricultural educational institutions that foster future farmers. For this reason, from 2022 a lecture on smart agriculture was included in the curriculum of all agricultural high schools and farmers’ academies. In addition, MAFF offers training opportunities for teachers to acquire the latest knowledge necessary to teach smart agriculture at agricultural educational institutions, as well as providing smart agricultural machinery and equipment to the institutions for practical training.

• The Digital Garden City Nation Initiative, established in December 2022, facilitates digitalisation in rural areas as a way to eliminate the digital divide between urban and rural regions. To accelerate digitalisation, the initiative supports broadband deployment in rural areas including disadvantaged areas (e.g. hilly and mountainous areas), as well as training digital professionals. According to the five-year action plan for the whole economy, 2.3 million digital professionals will be trained by the end of March 2027. In the agriculture, forestry and fisheries sectors, professional training to acquire new IT and digital skills in smart agriculture, forestry and fisheries is to be provided to 30 000 people per year.

Recent policy developments

Domestic policy developments in 2023-24

Food systems sustainability

The Biodiversity Strategy of the Ministry of Agriculture, Forestry and Fisheries was revised and released in March 2023 in response to the Kunming-Montreal Global Biodiversity Framework (KM-GBF) adopted in December 2022. The new strategy defines the 2030 vision and approaches to tackling biodiversity-related issues in the agriculture, forestry and fisheries sectors. The strategy calls for:

• conserving biodiversity and ecosystem services in rural areas

• reducing the impact of agriculture, forestry and fisheries on the global environment and contributing to its conservation

• facilitating collaboration within the whole food supply chain

• promoting stakeholders’ understanding of biodiversity and behavioural change through encouraging more use of environmentally friendly raw materials and disseminating information to consumers

• greening policy instruments

• encouraging stakeholders to utilise the Biodiversity Strategy in its main business.

The strategy is aligned with the MIDORI Strategy and the Basic Plan for Food, Agriculture and Rural Areas. It is also reflected in the National Biodiversity Strategy and Action Plan of Japan 2023-2030 (NBSAP), which was approved by the cabinet in March 2023.

In March 2023, MAFF published the “Guidance on Sustainable Management for Food Industry”. It was the first guidance made by MAFF with the overall goal of facilitating sustainable development of the food industry by illustrating how to tackle environmental, social and governance (ESG) issues surrounding food companies. The guidance is mainly targeted to managers aiming to practice sustainable management in small and medium-sized enterprises (SMEs) that are business partners of large major food companies. It covers how to set targets (e.g. climate change, respect for human rights, and food loss and waste reduction) and implement specific measures for commitments, along with methods of information disclosure.

Risk management

A series of torrential rains and flooding hit Japan in June and July 2023, leaving extensive damage to agriculture, forestry and fisheries. Total estimated damages were JPY 162.4 billion (USD 1.2 billion).6 In August 2023, typhoon Lan caused JPY 30.2 billion (USD 214.9 million) in damage to agriculture.7 On 1 January 2024, a magnitude 7.6 earthquake struck the Noto Peninsula in Ishikawa Prefecture, leaving devastating damage in the region including the agricultural sector. MAFF adopts several measures for restoration efforts in the sector. They include covering expenses required for removal disaster waste, financial supports for the reconstruction and repair of damaged agriculture house and agricultural machinery, application of grants for “direct payment to farmers in hilly and mountainous areas” and “multifunctional payment” for restoration of damage to farmland/agricultural waterways and joint use facilities in rural communities, as well as the commodity and revenues insurance programmes.

Food security and diversifications of input supplies

The revision of the “Food Security Reinforcement Policy Framework” was made on 27 December 2023. The policy framework, originally released in December 2022, presents a roadmap to ensure a stable food supply, and sets several targets to facilitate the structural transformation by increasing production and utilisation of domestic resources. The revision expanded targets such as facilitating adoption of smart technologies and securing stable imports.

To reduce excessive dependence on imported raw materials for chemical fertiliser, MAFF implemented measures to increase the use of domestic resources for organic fertilisers. In total, MAFF allocated JPY 6.8 billion (USD 48.4 million) from the JFY 2023 supplementary budget.8 The main measures include support payments to livestock farmers and compost manufacturers to partially cover costs for building facilities for the manufacture of fertiliser pellets made from composted livestock manure. Compost pellet is a solution for wide-area distribution across regions. MAFF also provided support to cover the costs of pilot projects for the use of domestic materials such as sewage sludge in fertiliser and to strengthen networks of raw material providers, fertiliser producers, and fertiliser users to expand practical use of domestic fertilisers.

MAFF allocated JPY 4.5 billion (USD 32 million) from the JFY 2023 supplementary budget to strengthen food supply chain security, with an emphasis on supporting food manufacturers in strengthening collaboration with producing areas and diversifying raw material procurement sources. This is to reduce procurement risks in the context of high prices of imported raw materials.

Trade policy developments in 2023-24

Japan’s agriculture, food, forestry and fishery exports reached a new record of JPY 1.45 trillion (USD 10.3 billion) in 2023. To build on this trend and reach the objectives of JPY 2 trillion (USD 14.2 billion) by 2025 and JPY 5 trillion (USD 35.6 billion) by 2030, Japan renewed the 2020 Strategy of Export Expansion of Agricultural, Forestry, Fishery Products and Food in December 2023.

The renewed strategy sets out additional measures to promote exports. These include further establishment of Japan Food Export platforms in promising countries and regions, and tightening collaboration between MAFF and Japan Agricultural Cooperatives (JA).9 The platforms, consisting of Japan External Trade Organization (JETRO) overseas offices and overseas diplomatic missions, provide comprehensive, professional, and continuous support to exporters in destination countries and regions. There are eight platforms established in the United States, the European Union, Thailand, Viet Nam, Singapore, China, Hong Kong (China), and Chinese Taipei, with platforms under consideration in Malaysia and UAE. The collaboration with JA covers various measures such as the establishment of model case areas that specialise in producing export products under supervision, including by Japan Food Export platforms, to be aware of the demands and regulations of the destination countries and regions. MAFF also supports aspiring farmers and JA officers to receive training to be export experts.

Policy context

Key economic and agricultural statistics

Japan is the world’s third largest economy after the United States and China with relatively small land area and high population density (Table 16.2). Agriculture constituted 1% of GDP and 3% of employment in 2022, but the agriculture and agro-food sector as a whole accounted for 9% of GDP if all food-related industries are considered (MAFF, 2024[2]). Livestock accounted for more than one-third of the total agricultural production value in 2022, followed by vegetables (25%), rice (16%) and fruits (10%) (MAFF, 2024[3]).

Two-thirds of the country area is covered by mountains, leaving only 12% of the total land area for agriculture, more than half of which are rice paddy fields. Total agricultural land has decreased from 4.8 million ha in 2000 to 4.3 million ha in 2022 (MAFF, 2022[4]) due to the abandonment and conversion of farmland to non-farm uses (e.g. residential, industrial, or commercial uses). The agricultural workforce declined by more than half since 1980 to 1.9 million in 2022, and the pace of this decline has accelerated in the last decade (SBJ, 2023[5]). The average farm size increased from 1.4 ha to 3.3 ha between 1990 and 2022 (MAFF, 2023[6]), but still remains small compared to other OECD countries. The average age of farmers was 68.4 years in 2022 and about 70% of farmers in Japan are over 65 years old (MAFF, 2023[6]; MAFF, 2024[7]).

Table 16.2. Japan: Contextual indicators

	Japan		International comparison
	2000*	2022*	2000*	2022*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	3 461	5 704	8.6%	4.2%
Population (million)	127	125	3.0%	2.4%
Land area (thousand km2)	365	365	0.4%	0.4%
Agricultural area (AA) (thousand ha)	4 830	4 325	0.2%	0.2%
			All countries1
Population density (inhabitants/km2)	340	335	52	64
GDP per capita (USD in PPPs)	27 290	45 649	9 363	25 965
Trade as % of GDP	8.7	19.4	12.3	16.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	1.5	1.0	2.9	3.8
Agriculture share in employment (%)	5.0	2.9	-	-
Agro-food exports (% of total exports)	0.3	0.9	6.4	8.0
Agro-food imports (% of total imports)	9.7	7.8	5.8	6.9
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	74	61	-	-
Livestock in total agricultural production (%)	26	39	-	-
Share of arable land in AA (%)	93	88	32	34

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organization (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

The country has experienced slow economic growth and deflation for most of the past two decades, but has one of the lowest unemployment rates among OECD countries (Figure 16.4). Japan’s average core consumer price index climbed 3.1 % in 2023, marking its fastest increase in 41 years, mainly driven up by rising food prices.

Japan is one of the world’s largest importers of agro-food products, and the United States is the biggest source of agricultural imports. The food self-sufficiency rate was 38% in 2022 on a calorie basis, meaning that more than 60% of Japan’s calorie supply depended on imports. Agro-food exports are much smaller than imports, but the export value in 2022 was JPY 886 billion (USD 6.3 billion) which is about five times higher than that of 2000 (MAFF, 2023[8]). Most of Japan’s agro-food exports are directed at final consumers (Figure 16.5). Processed food products such as alcohol and beverages, sauces and seasonings, and snacks account for the majority of Japan’s agro-food exports. Among unprocessed products, beef, green tea, and apples are the most exported.

Japan’s agricultural Total Factor Productivity (TFP) growth averaged 1.3% a year between 2012 and 2021, which is slightly above the global average and twice the growth estimated for 1991-2000 (Figure 16.6; Table 16.3). Recent TFP growth in Japan’s primary agriculture has allowed some modest output growth, offsetting reductions in the use of primary production factors, in particular labour, and intermediate inputs.

Japan’s nitrogen and phosphorus balances remain among the highest in OECD countries (Table 16.3). The high and increasing nitrogen balance is due to a combination of high fertiliser use and livestock production on limited pastureland. The high phosphorus balance, in contrast, is partly a result of soil characteristics (OECD, 2019[9]; Shindo, 2012[10]). Agriculture’s share of total energy use is below the OECD average, as is its share in GHG emissions – partly a consequence of the sector’s below-average contribution to the national GDP. The volume of agricultural water use has remained stable for the past few decades. In 2019, the Japanese agricultural sector used 67.9% of water of which over 90% was directed for paddy field irrigation (MLIT, 2022[11]). While average water stress in Japan has fallen somewhat, it remains much higher than the OECD average.

Table 16.3. Japan: Productivity and environmental indicators

	Japan		International comparison
	1991-2000	2012-2021	1991-2000	2012-2021
			World
TFP annual growth rate (%)	0.7%	1.3%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2022*	2000*	2022*
Nitrogen balance, kg/ha	170.8	179.3	32.1	28.2
Phosphorus balance, kg/ha	72.0	56.8	3.3	2.3
Agriculture share of total energy use (%)	1.2	1.1	1.7	2.0
Agriculture share of GHG emissions (%)	2.6	2.8	8.7	10.1
Share of irrigated land in AA (%)	54.7	54.4	-	-
Share of agriculture in water abstractions (%)	65.8	67.9	47.0	49.5
Water stress indicator	20.7	18.7	8.7	..

Note: * or closest available year. Data for nutrients balance refer to the year 2016.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Agricultural land reform was implemented immediately after World War II, transferring farmland ownership from landlords to previously tenanted farmers in order to improve their economic and social position. The Agricultural Land Act restricted sales of farmland for the purpose of non-cultivation or asset holding, as well as strongly protected farmers’ rights. Acquisition of land rights for agricultural use was restricted to companies, other than farmers-organized companies, until 2009, when the Agricultural Land Act was revised to allow non-agricultural companies to lease farmland. Japan also invested in agricultural research, extension services, and land infrastructure to recover from the devastation of the war. At the same time, the government kept controls on rice procurement – from production to distribution to consumers – under the Food Management Law in order to secure food supply.

To address the rising disparity in living standards and productivity between agriculture and other sectors, Japan implemented the Agricultural Basic Act in 1961 to increase farmers’ incomes by promoting the modernisation of agriculture. From the mid-1950s to the mid-1990s, agricultural policies focused on price and marketing control, including tariffs for key products, particularly rice, to ensure affordable food prices for consumers while increasing farm income in rural areas.

In 1993, at the conclusion of the Uruguay Round trade negotiations, Japan agreed to a preferential quota on rice imports. The Food Management Law was repealed in 1995, introducing market mechanisms for rice distribution. Following the replacement of the GATT with the WTO in1995, Japan converted non-tariff border measures to tariff rate quotas (TRQs) for major commodities, including rice.

Rapid globalisation of the economy, together with the continued decline in farming population and farmland area adversely impacted Japanese farming communities. In response, the Agricultural Basic Act was replaced by the Food, Agriculture and Rural Areas Basic Act in 1999 to establish four basic principles: 1) a stable food supply; 2) the desired multifunctional roles of agriculture; 3) sustainable development of agriculture; and 4) development of rural areas. Under the act, ten-year agricultural policy plans, named the Basic Plan for Food, Agriculture and Rural Areas, have been formulated since 2000.

Recent agricultural policy reforms have been aimed at helping the sector become more competitive and resilient. The government-administered rice production quota system was abolished in 2018, and other pro-competitiveness reforms have encouraged farmland accumulation and concentration, and re-organising agricultural co-operatives. In 2019, non-product specific revenue insurance was introduced to diversify farmers’ risk-management tools. The “MIDORI” Strategy was introduced in 2021; this is a sector-wide initiative to improve environmental, social, and economic outcomes throughout supply chains by 2050.

Promoting agricultural and food exports has also become a key policy goal, as demand for Japanese food products increases globally. Japan improved market access through large-scale trade agreements in recent years, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in 2018, the Japan-EU Economic Partnership Agreement (Japan-EU EPA) in 2019, the Japan-US Trade Agreement in 2020, and the Regional Comprehensive Economic Partnership (RCEP) in 2022.

Table 16.4. Japan: Agricultural policy trends

Period	Policy directives	Changes in agricultural policies
Prior to1960	Eradication of rural poverty and securing food supply	Agricultural land reform implemented to help farmers own farmland (by transferring it from landlords to previously tenanted farmers in order to improve their economic and social position) Arrangements to increase food production (Agricultural Co-operatives Act of 1947, Agricultural Disaster Compensation Act of 1947, Agricultural Land Act of 1957) Policy priority given to increasing rice production to solve serious food shortage (Food Management Law of 1942, Five Year Food Production Increase Plan of 1952)
1960-1980	Reduction of income disparities between agriculture and other industries	Agricultural Basic Act (1961) to increase farmers’ income by increasing farm size, improving farmland, adopting agricultural machinery and technology and shifting from rice and wheat-based production to livestock, vegetables and fruits. Rice policy goal changed from increasing rice production to managing quantity as full self-sufficiency achieved in 1967 Rice production adjustment control introduced in 1971
1980-2010	Adjusting towards internationalisation, bringing market principles to the agricultural sector, and integrating concepts of ‘rural area’ and ‘food’ into agricultural policies	Agricultural Management Framework Reinforcement Act (1993) systematises support for qualified farmers Act on Stabilization of Supply, Demand and Prices of Staple Food (1994) changes the role of government in rice state trading; government only purchases for stockpiling purposes Quantitative quotas of rice replaced by tariff rate quota (1999) Act on Food, Agriculture and Rural Areas (1999) aims to establish stable agricultural structure in the new economic and social conditions; food self-sufficiency goal and direct payments for farmers in mountainous areas introduced
2010-Present	New agricultural reforms to enhance competitiveness and resilience	Farmland reforms (2009 revision of Agricultural Land Act to allow non-agricultural companies to lease farmland, 2013 Act on Promotion of Agricultural Land Intermediary Management to facilitate agricultural land consolidation) Amendment of Agricultural Co-operatives Act (2015) Abolition of rice production quota system (2018) Introduction of the revenue insurance programme (2019) Large-scale trade agreements (CPTPP, Japan-EU EPA, Japan-US Trade Agreement, RCEP) and export promotion of agricultural and food products Formation of the MIDORI Strategy with sustainability and food related goals (2021)

Support to farmers declined from close to 57% of gross farm receipts in the mid-1980s to less than 31% in 2023. The share of market price support also declined, while Japan provides a range of budgetary forms of producer support, higher domestic prices continue to provide the majority of transfers to producers, accounting for close to 70% of PSE in 2021-23 (Figure 16.7).

References

[2] MAFF (2024), GDP calculation for agriculture and food related sector (in Japanese), https://www.maff.go.jp/j/tokei/kouhyou/keizai_keisan/index.html.

[7] MAFF (2024), Statistics on agricultural labour (in Japanese), https://www.maff.go.jp/j/tokei/sihyo/data/08.html.

[3] MAFF (2024), Total agricultural output (national estimate) (in Japanese), https://www.maff.go.jp/j/tokei/kouhyou/nougyou_sansyutu/.

[6] MAFF (2023), Agricultural structure statistics 2022 (in Japanese), https://www.maff.go.jp/j/tokei/kouhyou/noukou/.

[8] MAFF (2023), Overview of import and export of agricultural, forestry, and fishery products (in Japanese), https://www.maff.go.jp/j/tokei/kouhyou/kokusai/attach/pdf/index-58.pdf.

[4] MAFF (2022), Arable land area as of 15 July 2022 (in Japanese), https://www.maff.go.jp/j/tokei/kouhyou/sakumotu/menseki/.

[11] MLIT (2022), Water resources in Japan (in Japanese), https://www.mlit.go.jp/mizukokudo/mizsei/mizukokudo_mizsei_tk2_000014.html.

[9] OECD (2019), Innovation, Agricultural Productivity and Sustainability in Japan, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/92b8dff7-en.

[5] SBJ (2023), Labour Force Survey, Statistics Bureau of Japan (in Japanese), https://www.e-stat.go.jp/dbview?sid=0003007108.

[10] Shindo, J. (2012), “Changes in the nitrogen balance in agricultural land in Japan and 12 other Asian Countries based on a nitrogen-flow model”, Nutrient Cycling in Agroecosystems, Vol. 94/1, pp. 47-61, https://doi.org/10.1007/s10705-012-9525-x.

[1] WTO (2023), World Tariff Profiles 2023, https://www.wto.org/english/res_e/publications_e/world_tariff_profiles23_e.htm.

Notes

← 1.  The risk-weighted use of chemical pesticides is estimated based on the Acceptable Daily Intake (ADI) level of a chemical in humans.

← 2.  It is planned to expand the total area of organic farming from 25 000 ha as of 2020 to 1 million ha by 2050.

← 3.  According to the MIDORI Act, prefectural and municipal governments are required to jointly develop a “Basic Plan” by introducing and implementing environmentally friendly measures that focus on improving soil health, reducing the use of chemical pesticides and fertilizers, and reducing GHG emissions suited to the natural, economic, and social conditions of their regions.

← 4.  Society 5.0 is the vision of the future society that Japan should strive towards that follows the eras of the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0), and information society (Society 4.0). The 6th Science, Technology, and Innovation Basic Plan (Cabinet decision of 26 March 2021), depicts Society 5.0 as “a society that is sustainable and resilient against threats and unpredictable and uncertain situations, that ensures the safety and security of the people, and that individual to realize diverse well-being.”

← 5.  Smart agriculture refers to agriculture using advanced technologies such as robots, Artificial Intelligence (AI), and the Internet of Things (IoT). It is expected to save labour and automate farming work, while the use of data is expected to improve the quality and productivity of agricultural products.

← 6.  Total damages were estimated as of July 2024.

← 7.  Total damages were estimated as of July 2024.

← 8.  Japanese fiscal year (JFY) runs from 1 April to 31 March.

← 9.  Japan Agricultural Cooperative (JA) is organised in every prefecture and municipality throughout the country, based on the principle of mutual co-operation, with the purpose of protecting farming and living of its individual members.