Miller Magazine Issue: 122 February 2020

JAPAN 80 MILLER / FEBRUARY 2020 Japan is the third-largest economy in the world after the United States and China. It was the world's second-largest from 1968 until 2009, when it was overtaken by China. It is also the world's fourth-largest exporter and fourth-larg- est importer. Japan has a well-educated, industrious work- force and its large, affluent population makes it one of the world's largest consumer markets. Per capita income of $43,118 underpins its strength as a consumer market. Manufacturing has been the most remarkable, and inter- nationally renowned feature of Japan's economic growth. Today, Japan is a world leader in the manufacture of auto- mobiles, machine tools, optical and precision equipment, machinery, and chemicals. Japan has few natural resources and its agricultural sec- tor remains relatively protected, although a long-overdue domestic reform process was started in anticipation of recent trade deals, such as the Comprehensive and Pro- gressive Trans-Pacific Partnership (CPTPP) and Japan-Eu- ropean Union Economic Partnership Agreement (JEEPA). The Japanese agricultural sector accounts for about 1.4% of the total country's GDP. Only 12% of Japan's land is suitable for cultivation. Japan is highly dependent upon the import of natural resources. It is the world’s largest net buyer of food products in the world. Due to the lack of arable land, a system of terraces is used to farm in small areas. This results in one of the world's highest levels of crop yields per unit area. Rice accounts for almost all of Japan's cereal production. Ja- pan is the second-largest agricultural product importer in the world. A small agricultural sector is highly subsi- dized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. Only 20% of Japan’s land is suitable for cultivation. Topogra- phy greatly limits Japan's agriculture, which can produce only 40% of its food needs. Around 85% of the territory is occupied by mountains and most of the remaining ar- able land is dedicated to growing rice. Other agricultural produce of Japan are vegetables, fish, poultry, fruit, dairy products, pork, beef, flowers, potatoes, sugar cane, tea, legumes, wheat, and barley. In the Asian country, there has been a growing concern about farming as the current farmers are aging with a dif- ficult time finding successors. Japan has the fastest-aging agricultural labor force. In almost a decade, the number of Japanese agricultural producers has fallen from 2,2 million to 1,7 million and the average age is 67 years. Only 7% of Japan's active population is employed in the country- side, and most farmers work only part-time. Almost 10 percent of agricultural land has been abandoned. Certain agricultural operations, especially in unpopular areas, are struggling due to a lack of labor and it is becoming in- creasingly difficult to pass on farms to the next generation. The decline of family farming and the rural economy is considered one of the most pressing political challenges of contemporary Japanese society. Japan has one of the lowest food self-sufficiency rates among major world economies. The nation’s food self-sufficiency rate on a caloric intake basis was 37 per- cent in 2018, the lowest level in 25 years. This under- scores the government’s challenge in reaching its goal of 45 percent by 2025. The food self-sufficiency rate re- fers to the ratio of domestically consumed food supplied by producers in the country. The government reduced the target rate based on the caloric intake to 45 percent from the initial target of 50 percent amid criticism that the earlier goal was not achievable. It also moved the target date back to 2025 from 2020. The government is looking for ways to reach its goal but has also concluded free trade agreements with trans-Pacific economies and the European Union. The pacts have opened its market wider to imports. The United States is Japan’s top supplier of agricultural products, with a 25% market share in 2018. In recent