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Japan, a new framework law to relaunch agriculture

GIAPPONE-1
GIAPPONE-1

A new law regulating the agricultural sector with an emphasis on topical issues has been adopted in Japan, with the aim of also addressing some structural problems. The measure adopted by Parliament – the “Framework Law on Food, Agriculture and Rural Areas” – introduces important innovations, provides for the reorganisation and strengthening of agricultural policies, especially those most likely to affect the future of the sector, and tackles sensitive issues such as food safety, environmental, social and economic sustainability of agricultural activities, and digital transformation. The law also provides new tools to counter the chronic decline in agricultural population, an ongoing problem for Japan.

More specifically, in the area of food security, the new approach moves away from the previous approach based on stability of supplies and interventions aimed at supporting the domestic market, towards more far-reaching policies capable of dealing with exogenous shocks, such as natural disasters, pandemics, the effects of climate change, uncertain geopolitical scenarios and recent conflicts. Measures include incentives to increase domestic production and reduce the high dependence on imports (especially of wheat, soya beans and feed). Other measures planned include the diversification of supply markets, the expansion of emergency stocks and the creation of a “brand Japan” aimed at supporting exports and reducing import dependency by reorienting production.

The promotion of “brand Japan” is also linked to the issue of environmental, social and economic sustainability of agriculture. In this area, the reform aims at Japan’s greater alignment with the environmental policies of the most advanced countries in environmental protection by increasing the awareness of all the players involved, ranging from operators in the sector to end consumers. The latter are ultimately urged to contribute to supporting production costs, which are always rising due to soaring energy prices, the progressive devaluation of the yen and increasingly frequent adverse climate conditions.

Offsetting labour shortages and creating value added are two of the objectives underlying  digital transition in the sector. In this regard,, new processing methods and innovative distribution systems, energy savings and increased production through transgenic methods, and the use of drones or self-driving tractors are just some of the innovative tools brought into play by the new law. Since high costs have so far prevented a real penetration of many of these technologies in the field, supplementary instruments to the framework law have been identified (e.g. the “Law for promoting the use of agritech to increase agricultural production”) that provide for subsidised loans or loan for use agreements through agricultural associations.

More generally, twenty-five years after the last major amendment in 1999, the new framework law substantially changes the previous regulations dating back to 1961, which are deemed no longer adequate to current internal and external conditions. In recent years, in fact, factors such as the lowering of the food self-sufficiency rate, the ageing of the agricultural population, the ineffectiveness of state subsidies – together with external factors, such as new geopolitical conditions, the vulnerability of trade routes, and increased sensitivity to environmental issues – have contributed to reducing the weight of agriculture on the Japanese economy. In 2022, the sector’s share of gross domestic product (GDP) was only 0.86% (1.02% if fishing and forestry products are considered). Nevertheless, agriculture is still one of the country’s core activities and certain crops, such as rice, continues to be considered an essential element of national identity.

The reform is ultimately an important step towards strengthening the sector. Despite its production potential, in fact, Japan does not achieve food self-sufficiency and imports almost 60% of its requirements. The total  agricultural production, which amounted to about EUR 65 billion in 2022, is mainly focused on livestock (accounting for 39% of the total production), fruit and vegetable products (accounting for 25%), rice (accounting for 15%) and fruit (accounting for 10%).

With specific reference to trade relations between Italy and Japan, in 2023 the agribusiness sector was one of the main sectors of Italian exports: with a value of agri-food exports of more than EUR 1 billion, in 2023 Italy was the third largest supplier to Japan among the EU Member States, after France and Spain. Japan’s agri-food exports to Italy, instead, reached EUR 29.3 million.

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