The Current Situation and Problems of Farming Entry from the Non-Agricultural Sector

“The Bill for Partial Amendment to the Agricultural Land Act” which was to be implemented in December 2009, deregulates the farmland leasing scheme under certain conditions. This Bill makes it easier to start a farming operation by allowing corporations other than “agricultural production corporations,” as well as non-farmers, to lease farmland.<br>This amendment would bring a large number of new entrants to farming from the non-agricultural sector, despite the fact that entry through ownership is still prohibited.<br>The problem of entering farming from the non-agricultural sector has often been discussed in the context of farmland use schemes. However, judging from the realities of such entry, several viewpoints have been lacking, such as how agricultural management should be understood, including the role of such factors as farmland, labor, and technologies, or how we should support operations that have entered farming.<br>On April, 2007, the government’s Headquarters for the Promotion of Policies for Food, Agriculture and Rural Areas approved the “New Agricultural Policy for the 21 Century,” which aimed at raising the number of corporations entering farming other than “agricultural corporations” up to 500 by the end of FY2010. On 1 March, 2009, 349 corporations had begun engaging in farming through leasing farmland, including 125 from the construction sector and 72 from the food business sector.<br>At first, such entry was encouraged mainly for the aims of revitalizing rural areas, reusing abandoned farmland, as well as reforming the construction sector, which has been affected by the reduction in public investment projects.<br>A more recent feature has been an acceleration of farming entry due to a desire to obtain sufficient amount of food materials or PB agricultural products. However, such a tendency should be recognized as a movement of change in agricultural structure underlying the production, marketing and consumption of agricultural products.<br>According to a survey conducted in June 2008 by “The Association of Farming Entrants Corporations” (“Nogyo Sannyu Hojin Renraku Kyogikai”) and the National Chamber of Agriculture, not a few corporations have had some trouble in the farming operations. The problems are as follows:<br>1) while farm management size is different for each corporation, corporations which have a plan to enlarge their leased acreage are characterized by the establishment of cultural techniques, organization of marketing channels, and above all, their future prospect.<br>2) more than half of the responding corporations were in the red, but they still have a commitment to continuing agriculture, without thought of profit, in order to keep workers employed and to procure food materials.<br>3) even corporations operating at a deficit are improving their management, with higher productivity achieved through marketing channels and supported by subsidies.<br>Under the Diet’s deliberations of the Agricultural Land Act, several authorization conditions have been added to the Act in order to promote rural community development and appropriate land use.<br>Under the new scheme, farming entrants from non-agricultural sectors would increase in number, and corporations would have more options in how they entered into agricultural production. This means that management problems would be more highlighted and securing more continuous and sustainable profit would be a key issue. In this context, we realize that such problems almost are the same as present farm management.<br>