environmentally friendly farming in japan 2012
TRANSCRIPT
Financial Supports for Environmentally-Friendly Farming and Scientific Farming in Japan
25th September, 2012
and Scientific Farming in Japan
Agriculture, Forestry, Fisheries and Food Business Unit
Table of Contents
1 Organic Farming/Environmentally-Friendly Farming
2 The Great East Japan Earthquake
3 Scientific Farming 3 Scientific Farming
4 Financial Supports of JFC
1
Certification system for organic farming/environmentally-friendly farming
1.1 Certification System for Organic Farming
- In Japan, the agricultural products produced in accordance with organic Japan
Agricultural Standards are allowed to be called ‘”organic” and labeled with the
“organic JAS” logo.
- Eco-farmer is a certification system for environmentally-friendly farmer who makes
integrated efforts for improving the soil and reducing the use of chemical fertilizers
and pesticides, which is certified by local governments.
Conventional
Farming
Environmentally-friendly
Farming
Organic
Farming
2
Use of fertilizer/pesticide
high
low
Farming Farming Farming
Eco-Farmer Special Grown
Agricultural Products
Organic JAS
Zero20%～30% Less
Less Than 50%
Source: Ministry of Agriculture, Forestry and Fisheries of Japan
Changes in organic production certified under the organic JAS program
Changes in the number of Eco-farmers
5.65.65.65.6
5.75.75.75.76.0 0.40%（10,000 tons） 25
- Although the organic farming is spreading steadily, organic products account for
only 0.2 percent of total domestic agricultural production, which is a low figure
compared with other countries .
- On the other hand, the number of Eco-Farmers has reached 216,000 in 2011.
- Compared with the rapid growth of Eco-farmers, the number of organic farmers
has not experienced dramatic increase. While the organic JAS is similar to Eco-farmer system, the organic JAS costs much time and money for farmers, but it
doesn’t seem to benefit much.
1.2 Changes in Organic Farming
（ ）
3.43.43.43.4
4.84.84.84.8
4.94.94.94.9
5.35.35.35.3
5.65.65.65.6
0.10%0.10%0.10%0.10%
0.16%0.16%0.16%0.16%
0.17%0.17%0.17%0.17%
0.18%0.18%0.18%0.18% 0.18%0.18%0.18%0.18% 0.18%0.18%0.18%0.18%
0.0
1.0
2.0
3.0
4.0
5.0
2001 2005 2006 2007 2008 2009
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
Share of organic production(%)
Source: Ministry of Agriculture, Forestry and Fisheries of Japan
（10,000 tons）
0.10.10.10.19.99.99.99.9 12.712.712.712.7 16.716.716.716.7 18.618.618.618.6 19.619.619.619.6 21.121.121.121.1 21.621.621.621.6
0
5
10
15
20
2001 2005 2006 2007 2008 2009 2010 20113
（10,000 farmers）
1.3 Reasons for the Stagnation of Organic Farming
- The survey shows that only 4.5 percent of consumers in Japan prefer organic
products when they buy vegetables and fruits.
- But it’s not that organic farming is less-developed in Japan. Rather, Japanese
farmers have made greatest efforts to produce safe and high-quality products and
gained consumer confidence. As a result, it is difficult for consumers to find
distinctive advantages of organic farming over normal farming.
- In additions, the organic JAS regulations were established in 2000 while the Law
on promotion of organic agriculture was enacted in 2006. Due to strict regulations
which was introduced earlier than incentive measures, some farmers feel
challenged to practice organic farming. As a result, further incentive measures
are needed.
Important factors for buying vegetables and fruits (Five multiple answers)are needed.
4
69696969 59595959 42424242 40404040 37373737 28282828 27272727 16161616 15151515 13131313 11111111 9999 6666 5555 5555 3333 3333 2222 1111 111100001010101020202020303030304040404050505050606060607070707080808080
fre
s
h
re
a
s
o
n
a
b
le
d
o
m
e
s
tic
p
ro
d
u
c
ts
p
ro
d
u
c
ts
in
s
e
a
s
o
n
b
a
rg
a
in
s
a
le
ta
s
ty
m
o
d
e
ra
te
q
u
a
n
tity
g
o
o
d
c
o
lo
r
w
ith
in
b
u
d
g
e
t
lo
c
a
l p
ro
d
u
c
ts
g
o
o
d
lo
o
k
in
g
c
le
a
ra
n
c
e
p
ric
e
p
re
s
e
rv
a
b
le
tra
c
e
a
b
le
O
rg
a
n
ic
J
A
S
v
o
lu
m
e
d
is
c
o
u
n
ts
e
a
s
y
p
re
p
a
ra
tio
n
fa
m
o
u
s
g
ro
w
in
g
a
re
a
o
th
e
rs
n
o
p
a
rtic
u
la
r p
o
in
t
( % )
Source: JC General Research Institute
2.1 The Damage by the Great East Japan Earthquake
- On March 11 2011, Japan was hit by 9.0 magnitude earthquake.
- The massive earthquake and the subsequent tsunami incurred enormous
damages on the farmland, agricultural facilities and products especially in the
coastal regions of Iwate, Miyagi, Fukushima prefecture.
- The nuclear accident that followed the tsunami had negative impacts on
agricultural products such as shipment restrictions and harmful rumor.
Cultivated areaCultivated areaCultivated areaCultivated area(2010)(2010)(2010)(2010)
Damaged areaDamaged areaDamaged areaDamaged area
Aomori Aomori Aomori Aomori 156,800ha156,800ha156,800ha156,800ha 107ha107ha107ha107ha
The damages to agriculture-forestry-fisheries sector
5
Aomori
Iwate
Miyagi
Fukushima
ChibaIbarakiTokyo
×epicenter
Aomori Aomori Aomori Aomori Iwate Iwate Iwate Iwate Miyagi Miyagi Miyagi Miyagi Fukushima Fukushima Fukushima Fukushima Ibaraki Ibaraki Ibaraki Ibaraki ChibaChibaChibaChiba
156,800ha156,800ha156,800ha156,800ha153,900ha153,900ha153,900ha153,900ha136,300ha136,300ha136,300ha136,300ha149,900ha149,900ha149,900ha149,900ha175,200ha175,200ha175,200ha175,200ha128,800ha128,800ha128,800ha128,800ha
107ha107ha107ha107ha1,209ha1,209ha1,209ha1,209ha14,558ha14,558ha14,558ha14,558ha5,927ha5,927ha5,927ha5,927ha1,063ha1,063ha1,063ha1,063ha1,162ha1,162ha1,162ha1,162ha
TotalTotalTotalTotal 900,900ha900,900ha900,900ha900,900ha 24,026ha24,026ha24,026ha24,026ha
CategoryCategoryCategoryCategory DamagesDamagesDamagesDamages
Farmlands and agricultural facilitiesFarmlands and agricultural facilitiesFarmlands and agricultural facilitiesFarmlands and agricultural facilities
Farm products, etc. Farm products, etc. Farm products, etc. Farm products, etc.
FisheriesFisheriesFisheriesFisheries
ForestryForestryForestryForestry
88 million yen88 million yen88 million yen88 million yen
6 million yen6 million yen6 million yen6 million yen
126 million yen126 million yen126 million yen126 million yen
22 million yen22 million yen22 million yen22 million yen
TotalTotalTotalTotal 243 million yen243 million yen243 million yen243 million yen
Source: Ministry of Agriculture, Forestry and Fisheries of Japan
Impacts on farmers in Iwate, Miyagi, Fukushima
2.2 Impacts on Farmers and Consumers
- According to JFC surveys（2012）, more than 70% farmers in the affected area
still suffer the consequences of the earthquakes. Concretely, the downslide of selling
price and harmful rumor are the main cause of bad influences.
- In addition, from the aspect of consumers, 38% of people answer that they do not
purchase the agricultural products produced in the conceivable radiation
contaminated area.
Impacts on consumers’ behavior towards agricultural products produced in the area affected by nuclear accident
Not suffer
7
71.4%71.4%71.4%71.4%
17.1%17.1%17.1%17.1%
11.6%11.6%11.6%11.6%
14.2%14.2%14.2%14.2%
1.6%1.6%1.6%1.6%
16.6%16.6%16.6%16.6%
8.4%8.4%8.4%8.4%
21.6%21.6%21.6%21.6%
37.8%37.8%37.8%37.8%
Source: Japan Finance Corporation
Still Suffering
Had suffered, but not anymore
Not sufferNo idea
Don’t purchase fresh foods
No opportunity to purchase
Don’t purchase
Purchase
Don’t mind
3.1 What is Plant Factory
- The plant factory is a farming facility that enables year-round and pesticide-free
production by artificially controlled environment.
- By controlling the internal environment, plant factories can produce vegetables
about two to four times faster than conventional farming. In addition, as multiple
cultivation shelves (a multi-shelf system) are used, the mass production in a small
space is facilitated.
- About 130 plant factories currently operate across Japan, growing lettuce, herbs,
tomatoes, strawberries, and so on. Actions for large-scale production and entry
into the market are already being implemented.
8
The fully artificial light-type
is the cultivation method
without the sunlight
in a confined space
The sunlight- type
is the cultivation method
with the natural sunlight
in a greenhouse
Source: Ministry of Economy, Trade and Industry of Japan
3.2 Growing Attentions for Plant Factory
- Since the Earthquake of March 11, Plant factory has been attracting greater
attention than ever before. The plant factory is expected as a solution unaffected
by weather, agricultural pests and soil damages from Tsunami or nuclear accident.
- JFC surveys(2009,2012) shows that consumers’ awareness of plant factory has
increased from 69 percent in 2009 to 76 percent in 2012 and the purchase
experience also raised from 9 percent to 17 percent.
- The research also shows that consumers find advantages of the plant factories
over conventional farming in terms of “safety” “looks ” ”ecology”.
Vegetables produced in the plant factories are much superior to the others.
The consumer image for vegetables produced in plant factories
9
5%5%5%5%2%2%2%2%
9%9%9%9%10%10%10%10%
3%3%3%3%6%6%6%6%8%8%8%8%
16%16%16%16%
8%8%8%8%
25%25%25%25%
30%30%30%30%
9%9%9%9%
18%18%18%18%
26%26%26%26%
55%55%55%55%
66%66%66%66%
59%59%59%59%
51%51%51%51%
62%62%62%62%
61%61%61%61%
54%54%54%54%
17%17%17%17%
17%17%17%17%
6%6%6%6%
7%7%7%7%
18%18%18%18%
10%10%10%10%
9%9%9%9%
7%7%7%7%
2%2%2%2%
7%7%7%7%
5%5%5%5%
4%4%4%4%
3%3%3%3%
7%7%7%7%
0%0%0%0% 10%10%10%10% 20%20%20%20% 30%30%30%30% 40%40%40%40% 50%50%50%50% 60%60%60%60% 70%70%70%70% 80%80%80%80% 90%90%90%90% 100%100%100%100%pricepricepriceprice
tastetastetastetaste
lookslookslookslooks
safetysafetysafetysafety
nutritionnutritionnutritionnutrition
luxuryluxuryluxuryluxury
ecologyecologyecologyecology
Vegetables produced in the plant factories are much superior to the others.
Vegetables produced in the plant factories are slightly superior to the others.
Almost same.
Vegetables raised in the conventional way are slightly superior to vegetables produced in the plant factories
Vegetables raised in the conventional way are much superior to vegetables produced in the plant factories
Source: Japan Finance Corporation
3.3 Advantages and Challenges of Plant Factory
- There remain a number of issues; high building and running costs, difficulties in
establishment of cultivation technique, and securing of human resource
development.
- Vegetables grown in plant factory didn’t match the existing food certification
system because fertilizers for nutriculture are used to the water prepared for
breeding and cultivation.
- Since March 2012, New third party certification system which evaluates the safety
of vegetables produced in plant factories has been introduced.
- Capable of stable year-round production
10
Advantages
- Capable of stable year-round production
- Can be Installed on non-farmland areas, such as industrial parks and vacant stores
in shopping districts
- Grow safe, high-quality agricultural produce with no or minimal pesticide use
- Possible to employ novice farmers due to the light workload and the ease of
standardizing procedures
- Comfortable work environment in which the elderly and people with disabilities can
work with ease
Challenges
- High energy costs and facility installation costs
- Cultivation technology yet to be established
- Lack of human resources with both cultivation skills and facility management skills
- Limited types and varieties of crops available for production
Source: Ministry of Economy, Trade and Industry of Japan
4.1 JFC Supports for Farmers’ Business Expansion or Recovery
- JFC provides long-term financing with fixed, low-interest rates, taking into account
unique business characteristics such as long investment recovery periods and
unstable incomes influenced by the weather risk.
- JFC also serves as a safety net for the agriculture, forestry, and fisheries industry,
providing quick and flexible finance for disasters, etc. - In response to the earthquake on March 11, JFC established an interest-free
Special Earthquake Loan for those who suffer from direct or indirect
damages by the earthquake or tsunami.
Loan condition①Name Purpose Term Interest rate Credit Limit
11
Name Purpose Term Interest rate Credit Limit
Super-L Loan
1 facilities/machines2 farmland acquisition3 long term working capital
25 years or less 0.55%~1.30%
Individuals
150 million yen
Corporation
500 million yen
Or
100% of project costs
Safety-NetLoan
1 long term working capital 2 Disaster recovery
10 years or less 0.55%~0.75% 6 million yen
Special Earthquake Loan
1 Disaster recovery
Loan periods andgrace periods are both extended by 3 years
0.00%
Super L Loan
Individual
150 million yenCorporation
500 million yen Safety Net Loan
12 million yen
4.2 JFC Supports for Farmers’ New Challenges
- The Agricultural Improvement Loan is an interest-free financing program that
supports farmers’ challenges such as when they adopt a new crop or technology.
- For Eco farmers, the maximum repayment periods can be extended from 10 years
to 12 years and the maximum loan amount also can be expanded from 80 percent
to 100 percent of total project costs.
- To support further challenging projects, JFC established the Capital Subordinated
Loan in 2009. It is not recognized as debt but as capital in borrowers’ financial
statement because borrowers don’t need to repay principal for the first 8 years
and interest rates are reviewed regularly according to their financial performances.
Loan condition②
12
②Name Purpose Term Interest rate Credit Limit
Agricultural Improvement Loan
・facilities (when farmers adopt a new crop or technology and commence processing or retailing)
10 years or less→12 years or less
for Eco farmers0.00%
Individuals
50 million yenCorporation
150 million yen Or
80% of project costs
→100% for Eco farmers
Capital Subordinated Loan
・facilities (when farmers work on challenging projects in
the new business area）
18 years(including an 8-year grace period)
①ROA≧10% 4.90%
②0%≦ROA<10%2.65%
③ROA<0% 0.40%
100 million yen
JFC contributes to the reconstruction and reinforcement of the domestic agriculture and stable supplies of safe and good-quality of foods.
15