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16. Japan
Support to agriculture
Over the past decade, Japan has reduced its support to agriculture, but more recently the change in support levels has been moderate. Support to producers (PSE)
remains high as a share on gross farm receipts (41% in 2017-19) and is almost 2.4 times above the OECD average. The total support estimate to agriculture (TSE)
represented 0.9% of Japan’s GDP in 2017-19, most of which went to direct support to producers (PSE).
Market price support (MPS) remains to be the main element of the PSE, accounting for about 80% in 2017-19. It is largely sustained by border measures, in particular for
rice, pork and milk. Payments to producers decreased between 2018 and 2019. Budgetary support to producers is mostly delivered as payments based on area and
income.
The share of expenditures for general services provided to agriculture (GSSE) relative to TSE is 20%, which is higher than the OECD average but has decreased since the
1990s. The majority of the GSSE nanced the development and maintenance of agricultural infrastructure, representing more than four- fths of the GSSE in 2017-19.
Main policy changes

The Basic Plan for Food, Agriculture and Rural Areas, which sets Japan's comprehensive agricultural policy direction for the next 10 years, was revised in March 2020. In
response to challenges such as the decrease of farming population and the implementation of new large-scale trade agreements, the plan aims to strengthen the
agricultural production base regardless of farm size or its hilly and mountainous condition. Emphasis is also placed on sustaining rural areas. Finally, the Basic Plan
addresses responses related to the COVID-19.
A series of large-scale natural disasters, including typhoons and heavy rains, hit Japan in 2019, causing major damages to the agricultural sector. The damages in the
agricultural, forestry and sheries sectors are reported at JPY 460.2 billion (USD 4.2 billion). The government earmarked supplementary budget funds of JPY 105.4 billion
(USD 1 billion) for the restoration of these sectors, mostly used for the recovery of agricultural facilities and farmland as well as landslides and road destruction in
mountains.
Japan raised its consumption tax rate for most goods and services from 8% to 10% in October 2019. However, the consumption tax rate for food and beverages, other
than liquor and eating-out services, is set at 8% in order to lessen the burden especially on lower income households.
The Japan-US Agreement came into effect on 1 January 2020. Under the agreement, Japan eliminates or lowers custom duties for certain US agricultural products and
provides preferential US-speci c quotas for others. The United States eliminates or reduces custom duties on 42 agricultural products.
Assessment and recommendations

Japan has made some progress towards agricultural policy reforms since the early 2000s and has implemented programmes that are steps towards a more
market-oriented sector. But support to producers remains more than twice the OECD average as a percentage of gross farm receipts, and continues to be
dominated by market price support (MPS), which is among the potentially most distorting form of support. Further improvements are possible to reduce MPS and
eliminate measures impeding market signals.
https://www.oecd-ilibrary.org/sites/751935f0-en/index.html?itemId=/content/component/751935f0-en 1/12
The implementation of the Comprehensive and Progressive Agreement for Trans-Paci c Partnership and the Japan-EU Economic Partnership Agreement decreased
the border measures for agricultural commodities imported under these agreements. With the bilateral agreement with the United States entering into force, some
US agricultural products will bene t from improved market access. Increased competition in the domestic market may also contribute to structural change and
further productivity growth in Japanese agriculture. But the exclusion from trade barrier reduction of certain key products such as rice limits the bene ts to be
reaped.
The continued support provided for crop diversi cation is likely to help reduce abandonment of paddy elds. However, other policies should be aligned with the
ambition to reallocate rice area to other crops, implying in particular a reduction of high market price support for rice.
Large scale natural disasters continued to occur in 2019, causing signi cant income loss to the agricultural sector. The funds needed to restore damaged
infrastructure, both at regional and farm level, put substantial pressure on the national and local public budgets. Having a safety-net for farmers, such as a revenue
insurance programme, is one step towards mitigating the risk and damage. However, as climate-related disasters are expected to become more frequent and
intense, the government should strengthen efforts to prepare comprehensive programmes to build the sector’s resilience.
There is signi cant room to improve the environmental performance of agriculture. Japan has one of the highest nutrient surpluses among OECD countries.
Moreover, though GHG emissions from agriculture were the lowest among OECD countries, the sector accounts for more than three-quarters of total methane
emissions and half of the national nitrous oxide emissions. Japan has set a Nationally Determined Contributions (NDCs) target of 26% emissions below 2013 by
2030 but no speci c target for the agricultural sector. Several environmental programmes have been implemented but agricultural policy programmes should
provide consistent incentives to adopt sustainable production practices. An integrated agri-environmental policy framework with quantitative targets in which all
farmers commit to improving their environmental performance should be developed.
Although the share of expenditures for general services provided to agriculture relative to total support is higher than the OECD average, the level has decreased
since the 1990s. Moreover, most of these expenditures were programmed for infrastructure development and maintenance. Further progress is needed in
supporting agricultural knowledge and innovation to enhance the sector’s productivity and sustainability.
Policy responses in relation to the COVID-19 outbreak

Agricultural policies
Japan1 announced a JPY 108.2 trillion (USD 992 billion) stimulus package in April 2020, equivalent to about 20% of its GDP. The package includes the following measures
for the agriculture and food sector.
Agricultural producers who have di culty continuing their business operation bene t from access to increased loan limits, interest concessions and low interest
credit of long-term funds nanced by the Japan Finance Corporation.
To mitigate the impact of reduced milk consumption due to schools being closed, JPY 2.3 billion (USD 21.5 million) programme supports dairy farmers and
processors for excess milk diverted to further processing and non-fat dry milk diverted to animal feed.
Producers and vendors who were planning to deliver their food and agricultural products for school meals could receive supports to nd alternative sales channels.
Producers and vendors could also donate these remaining products to food banks with transportation costs compensated.
The government provides a subsidy to employers within the agriculture and food sector who grant special paid leave in addition to statutory annual paid leave to their
employees, whether on xed-term or permanent contracts, when they need to take leave to care for their children whose school or childcare provider is temporarily closed
as a COVID-19 emergency response.
The Ministry of Agriculture, Forestry and Fisheries (MAFF) extended the premium payment deadlines for agricultural mutual aid and revenue insurance programme.
Measures for COVID-19 were included in the Basic Plan for Food, Agriculture and Rural Area (the Basic Plan), which Japan revised in March 2020. The Basic Plan, which
sets Japan's comprehensive agricultural policy direction for the next 10 years, addresses stimulating demand for domestic agricultural products, securing agricultural
labour, and providing relevant information to consumers on food supply.
Agro-food supply chain policies

As short-term demand for domestic agricultural products (e.g. beef, dairy, vegetables, cut- owers) continues to fall, MAFF has attempted to stimulate demand for
agricultural products through press conferences, websites and social media.
MAFF published basic operation guidelines for farmers and food business operators in case of workers becoming infected by COVID-19. The guidelines were made
available online.
Consumer policies
The government has monitored food supply chains for any food shortages. MAFF provides information on food availability to the public and also ensures that staple food
(rice and wheat) has been stocked. The government has also called on citizens to avoid panic buying.

Figure 16.1. Japan: Development of support to agriculture
Note: * Share of potentially most distorting transfers in cumulated gross producer transfers.
Source: OECD (2020), “Producer and Consumer Support Estimates”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-pcse-data-en.
StatLink https://doi.org/10.1787/888934144363
Support to producers (%PSE) has declined gradually over the long term. During 2017-19, it represented around 41% of gross farm receipts (Figure 16.1). This is down
from 57% thirty years ago (1986-88) but remains 2.4 times higher than the OECD average. The share of potentially most distorting support (mainly MPS) has decreased
only moderately and still accounts for about 80% of the PSE, meaning it continues to be the main element of that support. Producer support increased slightly in 2019 as
larger MPS more than offset some reductions in budgetary support. On average, price gaps widened as lower border prices were not transmitted to domestic prices
(Figure 16.2). Prices received by producers were on average 62% higher than world market prices in 2017-19. The level of support varies by commodities but MPS is often
the main component of support based on individual commodities (Single Commodity Transfers, SCT). The highest price gap and thus the highest share of SCT in
commodity gross farm receipts are seen in rice, followed by barley, grapes, sugar, milk, and cabbage (all above 50%) (Figure 16.3). Expenditures for GSSE were equivalent
to 16% of agriculture value added in 2017-19 and were mainly used on the development and maintenance of irrigation and drainage facilities as well as natural disaster
prevention. Total Support to Agriculture (TSE) as a share of GDP was 0.9 %, and has declined over time from 2.1% in 1987-89.

Figure 16.2. Japan: Drivers of the change in PSE, 2018 to 2019

Figure 16.3. Japan: Transfer to speci c commodities (SCT), 2017-19

Table 16.1. Japan: Estimates of support to agriculture
Million USD
1986-88 2000-02 2017-19 2017 2018 2019p
Total value of production (at farm gate) 72 767 76 354 82 944 82 670 81 999 84 162
of which: share of MPS commodities (%) 68.4 63.8 66.6 66.4 67.0 66.3
Total value of consumption (at farm gate) 94 458 107 904 118 244 117 050 118 381 119 300
Producer Support Estimate (PSE) 44 611 43 955 37 403 37 780 36 785 37 645
Support based on commodity output 40 996 40 828 31 692 31 610 31 213 32 252
Market Price Support1 39 458 38 471 30 101 30 134 29 508 30 661
Positive Market Price Support 39 458 38 471 30 101 30 134 29 508 30 661
Negative Market Price Support 0 0 0 0 0 0
Payments based on output 1 539 2 358 1 591 1 476 1 705 1 591
Payments based on input use 1 434 976 852 937 879 740
Based on variable input use 403 85 10 11 10 10
with input constraints 403 85 0 0 0 0
Based on xed capital formation 890 724 580 667 611 463
Based on on-farm services 142 167 262 260 258 267
Payments based on current A/An/R/I, production required 621 613 2 089 2 437 1 950 1 879
Based on Receipts / Income 0 0 201 119 261 222
Based on Area planted / Animal numbers 621 613 1 888 2 318 1 689 1 658
with input constraints 0 0 1 225 1 243 1 235 1 198
Payments based on non-current A/An/R/I, production

0 0 0 0 0 0
required
Payments based on non-current A/An/R/I, production not

1 560 1 538 2 770 2 795 2 743 2 773
required
With variable payment rates 0 0 0 0 0 0
with commodity exceptions 0 0 0 0 0 0
With xed payment rates 1 560 1 538 2 770 2 795 2 743 2 773
with commodity exceptions 1 560 1 257 2 536 2 566 2 510 2 532
Payments based on non-commodity criteria 0 0 0 0 0 0
Based on long-term resource retirement 0 0 0 0 0 0
Based on a speci c 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 (%) 57.4 53.6 41.4 41.8 41.2 41.3
Producer NPC (coeff.) 2.24 2.07 1.62 1.63 1.62 1.62
Producer NAC (coeff.) 2.35 2.16 1.71 1.72 1.70 1.70
General Services Support Estimate (GSSE) 8 769 12 141 9 228 9 452 9 144 9 088
Agricultural knowledge and innovation system 514 861 987 986 984 990
Inspection and control 55 66 93 68 73 138
Development and maintenance of infrastructure 7 747 10 620 7 893 8 184 7 827 7 668
Marketing and promotion 152 248 134 98 143 160
Cost of public stockholding 301 345 121 116 116 132
Miscellaneous 0 0 0 0 0 0
Percentage GSSE (% of TSE) 16.3 21.7 19.8 20.0 19.9 19.4
Consumer Support Estimate (CSE) -53 525 -49 474 -43 181 -42 720 -42 857 -43 967
Transfers to producers from consumers -38 964 -38 460 -30 824 -30 964 -30 195 -31 312
Other transfers from consumers -14 520 -11 100 -12 979 -12 470 -13 264 -13 202
Transfers to consumers from taxpayers -108 35 6 5 5 6
Excess feed cost 68 51 615 709 597 540
Percentage CSE (%) -56.7 -45.8 -36.5 -36.5 -36.2 -36.9
Consumer NPC (coeff.) 2.31 1.85 1.59 1.59 1.58 1.60
Consumer NAC (coeff.) 2.31 1.85 1.58 1.57 1.57 1.58
Total Support Estimate (TSE) 53 272 56 130 46 637 47 237 45 934 46 739
Transfers from consumers 53 485 49 559 43 802 43 434 43 459 44 514
Transfers from taxpayers 14 308 17 670 15 813 16 272 15 739 15 427
Budget revenues -14 520 -11 100 -12 979 -12 470 -13 264 -13 202
Percentage TSE (% of GDP) 2.1 1.3 0.9 1.0 0.9 0.9
Total Budgetary Support Estimate (TBSE) 13 814 17 659 16 535 17 102 16 426 16 078
Percentage TBSE (% of GDP) 0.5 0.4 0.3 0.4 0.3 0.3
GDP de ator (1986-88=100) 100 105 96 96 96 96
Exchange rate (national currency per USD) 147.09 118.19 110.56 112.18 110.44 109.05
Note: p: provisional. NPC: Nominal Protection Coe cient. NAC: Nominal Assistance Coe cient. 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.
Contextual information
Japan is the world’s third largest economy after the United States and the People’s Republic of China (hereafter “China”) with relatively small land area and high population
density. The country has experienced slow economic growth and a low in ation rate for most of the past decade, but the unemployment rate is one of the lowest in OECD
countries (Figure 16.4). Agriculture constitutes a small share in the economy (1.2% of GDP and 3.2% of employment in 2018) (Table 16.2). The agricultural output had a
long downward trend but has been gradually increasing since 2014.
Due largely to the country’s mountainous topography, the agricultural area only represents 11.8% of total land, more than half of which is rice paddy elds (MAFF, 2019[1]).
The average farm size remains much smaller than that in other OECD countries, but increased from 1.1 hectares to 2.5 hectares between 1987 and 2019 (MAFF, 2020[2]).
The average age of farmers is 66.8 years and more than 80% of farmers in Japan are over 60 years old (MAFF, 2019[3]). In 2015, farms with more than JPY 30 million
(USD 0.25 million) of sales accounted for 3% of all farms, but for 53% of total output (OECD, 2019[4]).

Table 16.2. Japan: Contextual indicators
Japan International comparison
2000* 2018* 2000* 2018*
Economic context Share in total of all countries
GDP (billion USD in PPPs) 3 404 5 248 8.5% 4.6%
Population (million) 127 126 2.9% 2.5%
Land area (thousand km2) 365 365 0.4% 0.4%
Agricultural area (AA) (thousand ha) 4 830 4 444 0.2% 0.1%
All countries¹
Population density (inhabitants/km2) 340 339 53 62
GDP per capita (USD in PPPs) 26 841 41 502 9 275 21 924
Trade as % of GDP 9 15 12.4 15.3
Agriculture in the economy All countries¹
Agriculture in GDP (%) 1.5 1.2 3.1 3.6
Agriculture share in employment (%) 5.0 3.2 - -
Agro-food exports (% of total exports) 0.3 0.7 6.2 7.3
Agro-food imports (% of total imports) 9.7 8.0 5.5 6.3
Characteristics of the agricultural sector All countries¹
Crop in total agricultural production (%) 72 64 - -
Livestock in total agricultural production (%)25 35 - -
Share of arable land in AA (%) 93 94 32 33
Notes: *or closest available year.
1. Average of all countries covered in this report. EU treated as one.
Sources: OECD statistical databases; UN Comtrade; World Bank, WDI and national data.
The food self-su ciency rate was 37% in 2018 on a calorie basis (MAFF, 2019[5]), the lowest in recorded history, meaning that more than 60% of Japanese calorie supply
depended on imports. Japan is one of the world’s largest importers of agro-food products and the United States is the biggest source of agricultural imports (FAO,
2020[6]). Forty- ve per cent of imports are processed products for consumption (Figure 16.5).
The share of agricultural exports in total exports, on the other hand, constitutes only 0.7%. Most Japanese agricultural exports are directed at nal consumers
(Figure 16.5). Processed food products such as alcohol and beverages, snacks, sauces and seasonings account for the majority of Japan’s agro-food exports. Among the
unprocessed products, apples and beef are the most exported products.

Figure 16.4. Japan: Main economic indicators, 2000 to 2019
Sources: OECD statistical databases; World Bank, WDI and ILO estimates and projections.

Figure 16.5. Japan: Agro-food trade
Note: Numbers may not add up to 100 due to rounding.
Source: UN Comtrade Database.
Output growth was negative during 2007-16, as the decline in primary factor growth (land and labour) was larger than the increase in total factor productivity
(Figure 16.6). This can be explained by the abandonment of farmland and conversion to non-farm uses (e.g. residential or commercial uses), causing agricultural land
area to decrease by 27.6% in the past 60 years (MAFF, 2019[7]).Moreover, the number of commercial farm households is 1.13 million, decreased by more than 50% since
1990.

Figure 16.6. Japan: Composition of agricultural output growth, 2007-16
Note: Primary factors comprise labour, land, livestock and machinery.
Source: USDA Economic Research Service Agricultural Productivity database.
Japan’s nitrogen and phosphorus balances are among the highest in OECD countries (Table 16.3). The nitrogen balance in 2018 was 179.3 kg per hectare, increasing from
2000, derived from a high degree of fertiliser use and livestock production, combined with a low share of pastureland (Shindo, 2012[8]). The phosphorus balance in 2018
is 57.3 kg per hectare in comparison to 2.3 kg per hectare for the OECD average, and it is in part linked to soil-type related fertilisation needs identi ed in the past. That is,
the reaction of soil in Japan, particularly Andosols, with inorganic phosphate render the phosphate almost insoluble and unavailable for uptake by plants, requiring more
intensive phosphorus use by the agricultural sector (FAO, 2015[9]).
In line with its small role in the economy, agriculture’s share in total energy use, 1.2% in 2018, is well below the OECD average. Greenhouse gas (GHG) emissions from
agriculture were 2.6% of the total emissions in Japan — the lowest among OECD countries. However, breaking down the type of GHGs in Japan, in 2017, the agricultural
sector is responsible for more than three-quarters of total methane emissions, mainly coming from livestock enteric fermentation and rice cultivation. Almost half of the
national Nitrous Oxide (N2O) emissions are from manure and fertiliser application (GIO, 2019[10]).
The volume of agricultural water use remains stable for the past few decades. In 2018, the Japanese agricultural sector used 67.6% of water of which 94% was directed
for paddy eld irrigation (MLIT, 2019[11]).

Table 16.3. Japan: Productivity and environmental indicators
Japan International comparison
1991-2000 2007-2016 1991-2000 2007-2016
World
TFP annual growth rate (%) 0.8% 0.4% 1.6% 1.6%
OECD average
Environmental indicators 2000* 2018* 2000* 2018*
Nitrogen balance, kg/ha 170.8 179.3 33.3 29.1
Phosphorus balance, kg/ha 72.0 57.3 3.3 2.3
Agriculture share of total energy use (%) 1.3 1.2 1.7 2.0
Agriculture share of GHG emissions (%) 2.6 2.6 8.1 8.9
Share of irrigated land in AA (%) 54.7 54.4 - -
Share of agriculture in water abstractions (%) 65.8 67.6 46.0 49.0
Water stress indicator 21.0 19.3 9.9 8.9
Note: * or closest available year.
Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.
Description of policy developments

Main policy instruments
Japan maintains a system of high border protection and domestic price support for key agricultural products. In general, Japanese tariffs on agricultural products are
higher than those on non-agricultural products. On average, they amounted to 15.7% in 2018,2 compared to 2.5% for non-agricultural products. However, agricultural
tariffs vary considerably among products with over 35.7% of tariff lines duty free and 2.9% above 100% (ad valorem equivalent); 13.2% of agricultural tariff lines are non-
ad valorem (WTO, 2019[12]). Tariff-rate quotas (TRQs) with high out-of-quota tariffs are applied to some commodities such as rice, wheat, barley and dairy products.
Rice import is conducted through state trading ful lling Japan’s minimum-access commitment under the WTO Agreement on Agriculture. A TRQ of 682 200 tonnes
(milled) is applied. The maximum mark-up (price differences collected by the government when importing and selling) for rice imports is set at JPY 292 (USD 2.7) per kg
and the out-of-quota tariff-rate is JPY 341 (USD 3.0) per kg.
A crop diversi cation payment is paid to farmers who switch their use of paddy elds from table rice production to other crops (wheat, soybeans, rice for feed and our).
This payment is area based (output is also considered for rice for feed and our). In addition, a payment is provided to municipal government making unique efforts such
as using high-yield variety rice for feed and our, or cultivating buckwheat or rapeseed.
The direct support payment is provided for upland crops (wheat, barley, soybean, sugar beet, starch potato, buckwheat and rapeseed) based on area and output. The
area-based payments are based on current planting, while the output-based payments are based on the volume of sales and the quality. Subsidy rates for both payments
vary by quality and variety.
The revenue based payment is available for certain crops (rice, wheat, barley, soybean, sugar beet and starch potato) in case the revenue drops below the past average
revenue, 90% of the difference between the current revenue and the past average is compensated by the government (75%) and the farmers’ reserve fund (25%).
The Livestock Stabilization Programme for Beef, known as Beef Cattle Marukin, provides support payments to beef cattle producers when the standard sales price falls
below the standard production cost. The payments cover 90% of the difference between costs and sales prices. A quarter of the grant payments is paid from the fund
lled by cattle producers. A similar programme is applied for hog producers. Additionally, the compensation is paid to producers of milk used for processing.
The revenue insurance programme launched in January 2019 provides a safety net for farmers. The programme is revenue-based and compensates the loss of farm
revenue stemming from various factors including market and natural causalities, relative to a benchmark based on the previous ve years’ revenues. Government
supports 50% of the insurance premium and 75% of the reserve fund.
Commodity insurance mainly covers yield losses and damage of production equipment due to natural disasters, but degradation of crop quality is also insured for some
commodities (rice, wheat, barley, and fruit). This voluntary programme is available for a range of commodities (rice, wheat, barley, livestock animal, fruit, and eld crops).
Government support covers around 50% of the insurance premium. In principle, farmers can participate in either revenue insurance programme or commodity insurance
to avoid duplicated payments by the government programmes.
To foster well-quali ed agricultural entities, the government has set up a certi ed farmer programme. The programme grants certi ed status to farmers (both individuals
and corporations) with a management plan approved by national or local municipal authorities. The certi ed farmers receive several bene ts such as income support
payments and tax breaks.
To attract younger farmers, Japan offers three types of support programmes. First, a payment is available to new young farmers during a training period (maximum of
two years). Second, another payment is granted during the initial operation period (maximum of ve years). Up to JPY 1.5 million (USD 13 756) is paid annually to eligible
trainees and farmers. Third, the government also provides funding for a maximum of JPY 1.2 million (USD 11 005) to subsidise the training cost of young farmers for a
maximum period of two years for agricultural co-operation.
The Farmland Banks3 were established in 2014 to facilitate the consolidation of farmland. These intermediary institutions are found in each prefecture, and some
manage large areas of farmland in their regions. The Farmland Banks improve farmland conditions and infrastructure if necessary, and then lease the consolidated
farmland to business farmers (e.g. corporations, large-scale family farmers, new farmers). Subsidies are provided to land owners and regional authorities that lease
farmland under their responsibility to the Farmland Banks.
Public investment has long been one of the core policies to be implemented for improving rural infrastructure, such as farmland (e.g. enlargement of land plot),
agricultural roads, and irrigation and drainage facilities. The government also invests in the prevention and restoration of farm infrastructure from natural disaster, as well
as public health facilities construction in rural areas.
Hilly and mountainous areas represent about 40% of total agricultural land and of total agricultural output in Japan. Direct payments are provided to farmers in these
areas with the aim to compensate for the production disadvantage (e.g. steep slope and smaller cultivation area), avert the abandonment of agricultural land, and
contribute to environmental protection and landscape preservation.
Direct payments for environmentally-friendly agriculture are provided to farmers who conduct activities which are effective in preventing global warming or conserving
biodiversity together with reducing the use of synthetic fertilisers and pesticides by more than half relative to conventional farming practices in the region. Examples of
supported activities include cover crop planting, compost application and organic farming. Farmers are required to comply with Good Agricultural Practices (GAP) to
receive the payments.
Having rati ed the Paris Agreement on Climate Change, Japan plans to decrease GHG emissions from the agricultural sector in several ways: reducing fuel consumption
for horticultural facilities and agricultural machinery to reduce CO2 emissions, disseminating water management methods for paddy elds to lower methane emissions,
and improving fertiliser use e ciency to reduce N2O. On climate change adaptation, the agricultural adaptation plan, with a road map until 2025, looks at managing
climate risk (e.g. new variety development, infrastructure against increasing natural disasters) but also envisions taking advantage of positive opportunities that may
arise.
Japan has seventeen Economic Partnership Agreements (EPAs) in force, covering Singapore, Mexico, Malaysia, Chile, Thailand, Indonesia, Brunei Darussalam, the
Association of Southeast Asian Nations (ASEAN), Philippines, Switzerland, Viet Nam, India, Peru, Australia, Mongolia, the Comprehensive and Progressive Agreement for
Trans-Paci c Partnership (CPTPP), and the European Union.4 These EPAs have accelerated structural reforms in the agricultural sector to counter market competitions.
Such efforts include the implementation of “the Comprehensive TPP related Policy Framework”, which provides various programmes to increase productivity of the sector.
Japan is engaged in several other EPA negotiations including with Colombia and Turkey, and plurilateral negotiations such as the FTA among China, Japan and Korea, and
the Regional Comprehensive Economic Partnership (RCEP).
Domestic policy developments in 2019-20

The Basic Plan for Food, Agriculture and Rural Areas, which sets Japan’s agricultural policy direction for the next 10 years, was revised in March 2020. Facing a multitude
of challenges such as the decrease of farming population and the new trade environments by the implementation of large-scale trade agreements, the plan aims to
strengthen the agricultural production base regardless of farm size or its hilly and mountainous condition. The emphasis is also placed on sustaining rural areas. The
Basic Plan maintains its goal of increasing the country’s calorie-based food self-su ciency rate to 45% by scal year 2030. Additionally, the Basic Plan addresses
responses related to the COVID-19, such as boosting domestic demands for agricultural products and providing necessary information to consumers.
Across all of the sectors, Japan accelerates the practical application of labour-saving technology using arti cial intelligence and robots to resolve the growing labour
shortage. The agricultural sector also bene ts from advances in these technologies. Aiming to enable almost all business-oriented farmers to utilise data in their work ow
by 2025, the government began supporting the incorporation of current leading technologies into agricultural production. With the involvement of producers, municipal
governments, the national agriculture research institute, and private sector actors, 121 production sites conduct this smart agriculture project.
In 2019, the government formulated a new programme to promote the implementation of new technologies at agricultural production sites, aiming to further advance the
utilisation of smart agriculture technologies. In particular, the programme conducts research and development (R&D) on smart agriculture technologies in various farming
elds and builds a consultation system for farmers on smart agriculture so that these technologies can be su ciently implemented.
The Agricultural, Forestry and Fishery Products and Food Export Facilitation Act came into force in April 2020. With the new Act, the government aims to facilitate the
exports of agricultural, food, forestry and shery products. Previously, multiple ministries oversaw export policies for these products – e.g. the Ministry of Health, and
Labour and Welfare issued a sanitary certi cate necessary for export, while the Ministry of Agriculture, Forestry and Fisheries (MAFF) negotiated food safety requirements
set by import countries. The new Act streamlines and centralises the management of the operations related to these exports at the headquarters established within
MAFF. The new structure seeks to clarify the responsibilities within government agencies and expedite the administrative process of export.
A series of large-scale natural disasters hit Japan in 2019. Typhoons, heavy rains, ooding, landslides, and earthquakes all caused major damages to the agricultural
sector. The damages in the agricultural, forestry and sheries sectors from these disasters are reported at JPY 460.2 billion (USD 4.2 billion). The government earmarked
supplementary budgets of JPY 105.4 billion (USD 1 billion) for the restoration of these sectors, mostly used for the recovery of farmland and agricultural facilities as well
as landslides and road destructions in the mountains.
Japan amended the Fertilizer Regulation Act in 2019. This amendment allows the production and sales of fertilisers that combine chemical fertilisers with compost of
livestock manure or soil improvement additives. It also provides standards for raw materials to be used for producing fertilisers. These standards promote the utilisation
of industrial by-products and compost in fertilisers, and also aim to improve the safety of these fertilisers. Furthermore, while previous labelling standards were focusing
only on indicating raw materials and the nutrient contents, the amendment provides for additional labelling standards on the effects and features of fertilisers. The
amended act aims to enable farmers to attain e cient management of soil and to contribute to the improvement of soil fertility.
The Act on the Promotion of Food Loss and Waste Reduction came into force on 1 October 2019. The main purpose of the Act is to promote food loss and waste
reduction as a national movement through the collaboration of various entities, including the national and local governments, businesses, and consumers. The Act
prescribes the responsibilities of the national and local governments to raise public awareness on food loss and waste, and support food-related business operators and
related entities. In particular, the Act obligates the national government to establish a basic policy (by Cabinet decision) on reducing food loss and waste, and local
governments are obliged to make their best efforts to establish their basic plans, based on the basic policy. In addition, the Act declares October as a promotion month for
reducing food loss and waste to enhance understanding and interest among the public.
In October 2019, Japan raised its consumption tax for the rst time in ve and a half years. The tax rate was increased from 8% to 10% to secure stable revenue for the
national social security system that bene ts. For the rst time, the government also introduced a reduced tax rate system. While most goods and services are subject to
the increased tax rate, the consumption tax rate for food and beverages other than liquor and eating-out services, is set at 8% in order to lessen the burden especially on
lower income households.
Trade policy developments in 2019-20

Japan’s tariff-rate-quotas continued to be under- lled in scal year (FY) 2019 (April 2019-March 2020) for some products, including butter and butter oil, prepared whey for
infant formula, and skimmed milk powder for school lunches. Japan issued special safeguard measures in FY 2019 for some products, including butter and inulin. Japan
decided to import up to 20 000 tonnes of butter under state trading in FY 2020 in order to meet domestic demand.
The Japan–European Union Economic Partnership Agreement entered into force on 1 February 2019 after more than four years of negotiations. The agreement
substantially reduces tariffs and trade barriers for both parties. Overall, Japan eliminates duties on about 94%5 of imports from the European Union and the European
Union liberalises 99% of tariff lines once fully in place after 21 years. The agreement is set to eliminate tariffs on about 82% of the EU’s agro-food products exported to
Japan. Duties on most remaining products are to be reduced over time, while Japan has opened TRQs for others. EU’s tariffs on beef, tea, alcoholic beverages and other
priority products from Japan are to be eliminated, most upon the agreement’s entry into force. Tariffs for rice remained unchanged for both parties. Aside from market
access, the agreement establishes rules on the protection of more than 50 Japanese Geographical Indications (GIs) for wines, spirits and agricultural products in the EU,
and 200 EU GIs in Japan.
About ve months into the negotiations, Japan and the United States reached a bilateral trade agreement in September 2019 and the agreement entered into force in
January 2020. Under the Trade Agreement between Japan and the United States of America, Japan sets to eliminate or reduce customs duties and mark-ups on main
agricultural imports from the United States including beef, pork and wheat, while maintaining tariffs for its rice. The United States eliminates or reduces customs duties
on 42 agricultural products such as cut owers and yams (nagaimo) which Japan has an interest to export into the United States.
Speci cally, Japan provides staged tariff reductions on US beef from 38.5% to 9% in fteen years. On pork, Japan eliminates the 4.3% ad valorem duty, and reduces the
speci c duty (from JPY 482 to JPY 50 (USD 4.4 to USD 0.5) per kilo) both over nine years. The mark-up (price differences collected by the government when importing and
selling) on US wheat is reduced by 45% by 2026, and a US speci c quota is set at 120 000 tonnes increased to 150 000 tonnes in ve years. The agreement provides for
the use of safeguards for surges in imports of beef, pork, processed pork, whey, oranges and race horses.
References
[6] FAO (2020), FAOSTAT (major import partners), http://www.fao.org/faostat/en/#data/TM (accessed on 3 April 2020).
[9] FAO (2015), World Reference Base for Soil Resources 2014, update 2015 International soil classi cationn system for naming soils and creating legends for soil maps.
World Soil Resources Reports No. 106, http://www.fao.org/3/i3794en/I3794en.pdf.
[10] GIO (2019), Japan’s GHG emissions data (FY1990ｰ2017, Final gures), http://www-gio.nies.go.jp/aboutghg/nir/nir-j.html#b.
[2] MAFF (2020), Agricultural structure statistics 2019, https://www.maff.go.jp/j/tokei/kouhyou/noukou/index.html (accessed on 26 March 2020).
[13] MAFF (2020), Information on Covid-19, https://www.maff.go.jp/j/saigai/n_coronavirus/index.html.
[7] MAFF (2019), agricultural land (cultivated and planted) statistics, https://www.e-stat.go.jp/stat-search/ les?
page=1&layout=datalist&toukei=00500215&tstat=000001013427&cycle=7&year=20180&month=0&tclass1=000001032270&tclass2=000001032271&tclass3=000001125355
.
[3] MAFF (2019), Agricultural Structure Statistics 2019 (Japanese), https://www.maff.go.jp/j/tokei/kouhyou/noukou/index.html#r.
[1] MAFF (2019), Arable land area as of 15 July 2019, https://www.maff.go.jp/j/tokei/kouhyou/sakumotu/menseki/index.html#r.
[5] MAFF (2019), The food self-su ciency rate FY 2018 (Japanese), https://www.maff.go.jp/j/press/kanbo/anpo/attach/pdf/190806-2.pdf.
[11] MLIT (2019), Water resources in Japan, http://www.mlit.go.jp/mizukokudo/mizsei/mizukokudo_mizsei_tk2_000014.html.
[4] OECD (2019), Innovation, Agricultural Productivity and Sustainability in Japan, OECD Food and Agricultural Reviews, OECD Publishing, Paris,
https://dx.doi.org/10.1787/92b8dff7-en.
[8] Shindo, J. (2012), “Changes in the nitrogen balance in agricultural land in Japan and 12 other Asian Countries based on a nitrogen- ow model”, Nutrient Cycling in
Agroecosystems, Vol. 94/1, pp. 47-61, http://dx.doi.org/10.1007/s10705-012-9525-x.
[12] WTO (2019), World Tariff Pro les 2019, https://www.wto.org/english/res_e/booksp_e/tariff_pro les19_e.pdf.
Notes
← 1. Source of the information on policy responses relative to the COVID-19 outbreak: (MAFF, 2020[13]).
← 2. Simple average MFN applied.
← 3. Public Corporations for Farmland Consolidation to Core Farmers through Renting and Subleasing.
← 4. Order according to the effectuation date of agreements.
← 5. Based on the number of liberalised tariff lines.
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complete version of the publication, available at the link provided.
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Tackling coronavirus (COVID-19) - Browse OECD contributionsTackling coronavirus (COVID-19) ×

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Main policy changes

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Assessment and recommendations

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Policy responses in relation to the COVID-19 outbreak

Agro-food supply chain policies

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Market Price Support1 39 458 38 471 30 101 30 134 29 508 30 661

Negative Market Price Support 0 0 0 0 0 0

Payments based on output 1 539 2 358 1 591 1 476 1 705 1 591

Based on variable input use 403 85 10 11 10 10

with input constraints 403 85 0 0 0 0

with input constraints 403 85 0 0 0 0

Based on on-farm services 142 167 262 260 258 267

Based on Receipts / Income 0 0 201 119 261 222

with input constraints 0 0 1 225 1 243 1 235 1 198

Payments based on non-current A/An/R/I, production

Payments based on non-current A/An/R/I, production not

With variable payment rates 0 0 0 0 0 0

with commodity exceptions 0 0 0 0 0 0

with commodity exceptions 1 560 1 257 2 536 2 566 2 510 2 532

Payments based on non-commodity criteria 0 0 0 0 0 0

Based on long-term resource retirement 0 0 0 0 0 0

Based on a speci c non-commodity output 0 0 0 0 0 0

Based on other non-commodity criteria 0 0 0 0 0 0

Percentage PSE (%) 57.4 53.6 41.4 41.8 41.2 41.3

Producer NPC (coeff.) 2.24 2.07 1.62 1.63 1.62 1.62

Producer NAC (coeff.) 2.35 2.16 1.71 1.72 1.70 1.70

Inspection and control 55 66 93 68 73 138

Marketing and promotion 152 248 134 98 143 160

Cost of public stockholding 301 345 121 116 116 132

Percentage GSSE (% of TSE) 16.3 21.7 19.8 20.0 19.9 19.4

Transfers to consumers from taxpayers -108 35 6 5 5 6

Excess feed cost 68 51 615 709 597 540

Percentage CSE (%) -56.7 -45.8 -36.5 -36.5 -36.2 -36.9

Consumer NPC (coeff.) 2.31 1.85 1.59 1.59 1.58 1.60

Consumer NAC (coeff.) 2.31 1.85 1.58 1.57 1.57 1.58

Transfers from consumers 53 485 49 559 43 802 43 434 43 459 44 514

Transfers from taxpayers 14 308 17 670 15 813 16 272 15 739 15 427

Budget revenues -14 520 -11 100 -12 979 -12 470 -13 264 -13 202

Percentage TSE (% of GDP) 2.1 1.3 0.9 1.0 0.9 0.9

Percentage TBSE (% of GDP) 0.5 0.4 0.3 0.4 0.3 0.3

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2000* 2018* 2000* 2018*

Economic context Share in total of all countries

GDP (billion USD in PPPs) 3 404 5 248 8.5% 4.6%

Population (million) 127 126 2.9% 2.5%

Land area (thousand km2) 365 365 0.4% 0.4%

Agricultural area (AA) (thousand ha) 4 830 4 444 0.2% 0.1%

Population density (inhabitants/km2) 340 339 53 62

GDP per capita (USD in PPPs) 26 841 41 502 9 275 21 924

Trade as % of GDP 9 15 12.4 15.3

Agriculture in the economy All countries¹

Agriculture in GDP (%) 1.5 1.2 3.1 3.6

Agriculture share in employment (%) 5.0 3.2 - -