Agriculture plays a vital role in food supply, regional economies, and cultural preservation.
To support agriculture, governments at national and local levels implement various policies in the form of agricultural subsidies.
However, in reality, the allocation of these subsidies is often criticized for being biased or unfair.
This article provides an introductory overview of agricultural subsidies, their objectives, and the impacts of unequal distribution.
{tocify} $title={Table of Contents}Objectives and System Overview of Agricultural Subsidies
Agricultural subsidies refer to financial support provided by national and local governments to reduce risks faced by farmers and stakeholders, enhancing the sustainability of domestic agriculture.
They are designed for a range of objectives, such as stabilizing agricultural production, revitalizing rural areas, and ensuring farmers' income security.
While these policies are crucial for food security and regional development, unfair advantages enjoyed only by certain regions or large-scale farmers have become a notable social issue.
Disparities in Benefits and Their Background
Not all farmers benefit equally from the agricultural subsidy system.
Due to the system's complexity and strict application requirements, certain farmers are favored while others are left behind.
This section explores the actual state of subsidy allocation and the structure of the resulting disparities.
By uncovering the background behind these imbalances, we seek clues for improving the system.
Current State of Subsidy Distribution and Case Examples
The distribution methods for subsidies are highly complex, involving various conditions and criteria that vary by region and policy design.
For example, certain areas may be designated as priority support regions, or subsidies may be directed toward farmers growing crops aligned with policy goals (e.g., rice, wheat, soybeans).
Requirements such as having a minimum management scale or collaboration history with agricultural cooperatives are also common.
While such conditions may seem logical, they often lead to uneven support distribution.
Large-scale agricultural corporations or farmers affiliated with major agricultural cooperatives often secure subsidies more smoothly due to accumulated know-how and administrative support.
On the other hand, small-scale family farms or independent farmers may give up on applying due to lack of information or complex paperwork.
In geographically disadvantaged areas like depopulated or mountainous regions, it is even harder to benefit from policies, leading to chronic under-support.
This not only hinders local agricultural development but also negatively affects young farmers' retention and succession.
Detailed Analysis of Disparities by Region, Scale, and Business Type
Analysis of subsidy recipients shows that areas near major cities or with well-developed infrastructure have better access to administrative and cooperative support, resulting in faster and more accurate information sharing.
Farmers in these areas can quickly learn about new programs and easily consult with local support centers or specialists.
This enables smoother document preparation and application processes.
Conversely, in remote rural areas, mountains, or islands, limited internet access and transportation make it harder for farmers to stay informed.
In aging communities, digital application processes can become an added barrier.
If the responsible office is far or lacks permanent staff, submitting paperwork can become physically difficult, limiting program participation.
Small-scale or individual farmers often lack the time or knowledge for paperwork due to busy daily farming duties.
With a lack of personnel with expertise in documentation and systems, opportunities for support are scarce.
Even when support systems exist through cooperatives or municipalities, a shortage of staff or varying service quality further widens the gap.
Thus, geographical factors, business types, and capability to utilize systems are root causes of subsidy distribution disparities.
System Issues and Historical Background
Japan's agricultural subsidy system began in the post-war recovery period and evolved over time.
Initially focused on resolving food shortages and stabilizing farmland, the system later shifted to address overproduction and structural changes during the economic boom, becoming more complex.
This chapter highlights the structural issues of the current system by looking at policy evolution, the impact of notable programs like the "gentan" (rice production reduction) policy, and recent events such as the "Reiwa Rice Crisis."
By reflecting on the history, we gain clearer insight into the current system's challenges and future improvement directions.
Evolution of Past Policy Designs
Japan’s agricultural subsidy system was originally established as part of postwar land reforms and the food control system of the 1950s to address food shortages. These policies prioritized the stabilization of domestic agriculture and food security for the population, with significant funding allocated to support them.
During the 1960s and 1970s, the government implemented rice purchase programs and price guarantee systems, enabling producers to secure stable incomes.
However, as Japan’s food self-sufficiency improved during the period of rapid economic growth, the problem shifted to overproduction. Consequently, the direction of agricultural policy also underwent a major transformation.
In 1970, the gentan (production adjustment) policy was introduced to curb production, and subsidies became increasingly focused on encouraging reduced output.
Furthermore, from the 1980s onward, with trade liberalization and Japan’s accession to the World Trade Organization (WTO), agricultural policy was expected to align more closely with market economics.
In this context, changes occurred in the allocation criteria and target groups for subsidies. Systems began to favor large-scale farmers who owned a certain amount of land, incorporated agricultural enterprises, and those with strong ties to agricultural cooperatives.
As a result, the benefits of subsidies became concentrated in certain groups, exacerbating disparities based on region and business type.
Impact and Limitations of the Gentan Policy
The gentan policy, implemented from 1970 to 2017, aimed to reduce surplus rice production by encouraging farmers to switch to alternative crops or leave land fallow.
As part of this policy, subsidies were offered to compensate for income shortfalls from non-rice crops, which often didn’t yield the same profits.
However, this subsidy structure significantly influenced farmers’ decision-making.
Instead of focusing on market demand or production efficiency, farmers began prioritizing crops that offered the highest subsidies, leading to a policy- and subsidy-dependent agricultural structure.
For example, some farmers continued growing low-demand crops simply because subsidies were available, delaying the development of competitive agricultural products.
Moreover, the guaranteed income from subsidies diminished the motivation to invest in efficiency and quality improvements.
This structure ultimately weakened Japan’s agricultural competitiveness and flexibility, making independent farming management difficult in the long term.
Even after the policy ended in 2018, rice production did not rebound. Instead, the aging and shrinking farming population became more pronounced.
Reflecting on this history is crucial for re-evaluating the current agricultural subsidy system.
In addition, the “Reiwa Rice Crisis” of 2024 became a symbolic event, highlighting the lingering effects of past policies on today’s agriculture.
That year, a combination of unstable weather, reduced rice acreage, and vulnerability due to reliance on imported rice led to a nationwide shortage and a sudden price surge.
In urban areas especially, consumers faced store shelves emptied of rice, and the issue gained widespread attention on social media.
This situation stemmed from the long-term reduction of domestic production capacity under the gentan policy and the lack of effective alternative mechanisms after the system’s abolition.
The Reiwa Rice Crisis sparked national debate on the fundamentals of agricultural subsidies and production control, and emphasized the urgent need for a new, reliable supply framework.
Current Issues Seen Through Historical Context
Historically, agricultural subsidies were essential to support domestic agriculture—especially during postwar reconstruction and Japan’s economic boom, when rebuilding agriculture and securing food supply required major investments.
However, these subsidy systems were not always based on a consistent long-term vision. Instead, they were often influenced by vested interests—politicians, bureaucrats, cooperatives, and large-scale farmers.
As a result, subsidies were not always directed to the areas or farmers most in need, but rather concentrated in politically influential regions and organizations.
Examples include policy allocations aimed at electoral districts or preferential treatment for areas with powerful agricultural cooperatives.
This structure has raised concerns about the transparency and fairness of the subsidy system, increasing calls for reform.
Modern challenges such as aging farmers and a lack of successors are also insufficiently addressed by the current system.
While support programs for new farmers do exist, high startup costs—such as land acquisition and investment in expensive machinery—create barriers that prevent many aspiring young farmers from entering the field.
For new small-scale farmers, particularly those relocating from urban areas, strict eligibility requirements and weak local support networks make entry into agriculture even more difficult. On-the-ground challenges remain significant.
International Comparison and Global Perspective
The challenges of agricultural subsidy systems are not unique to Japan. Countries around the world continue to explore various ways to support agriculture.
To improve Japan’s system, it is essential to study and analyze the successes and failures of other nations and apply the insights gained to drive institutional reform.
This section explores agricultural subsidy systems in major regions such as the European Union (EU) and the United States, comparing differences in policy design, methods of assessing social value, and efforts toward environmental protection and regional revitalization to find lessons for Japan’s agricultural policy.
By learning from other countries, we can explore how Japan can build a more sustainable support structure for agriculture moving forward.
Comparative Analysis of Agricultural Subsidy Systems
Internationally, the agricultural policies of the EU and the U.S. are commonly used as benchmarks.
In the EU, the Common Agricultural Policy (CAP) provides direct payments to farmers, regardless of production volume. These payments are also recognized as compensation for providing public benefits, such as maintaining rural areas and protecting the environment.
Notably, additional incentives are offered to farmers who practice eco-friendly agriculture or engage in maintaining rural landscapes, showing a clear institutional emphasis on sustainability.
In contrast, the U.S. implements various subsidy programs under the Farm Bill, with core support systems including price supports and disaster compensation for major crops like corn, soybeans, and wheat.
While large-scale agricultural corporations receive substantial support—drawing criticism—recent years have seen the introduction of new grants to assist urban and organic farming. These measures aim to increase support for small-scale farmers and young entrants.
Both the EU and the U.S. have strengthened support policies that consider not only economic efficiency but also environmental, social, and diversity-related factors, offering valuable insights for Japan's policy reform.
Lessons from Global Examples for Reform
These international examples demonstrate the importance of support policies that evaluate broader social values—not just production quantity or scale. These include environmental protection, community preservation, climate change mitigation, and biodiversity conservation.
In the EU, for example, extra payments are provided to farmers who adopt environmentally conscious farming methods or who continue farming under geographically disadvantaged conditions such as mountainous regions.
In the U.S., grant programs support sustainable small-scale farming in urban areas and fund initiatives like local farmers’ markets that serve low-income populations—linking agricultural support with social welfare policies.
This underscores the growing recognition of agriculture’s multifaceted role—not just as an industry but as a pillar of community life and the broader economy.
By adopting such perspectives, Japan can build sustainable agricultural models that reflect regional characteristics, support the retention of young farmers, and revitalize depopulated areas.
Long-term perspectives and new policy ideas are needed now more than ever to simultaneously strengthen the future of agriculture and ensure broader societal sustainability.
Future Reform Proposals and Solutions
As previously discussed, Japan’s agricultural subsidy system still faces issues such as uneven distribution, complex application processes, and disparities based on scale and location.
Structural problems, including the long-lasting effects of the gentan policy and the decline in new farmers, have also become apparent.
To address these challenges and create an environment where all farmers can operate fairly and sustainably, a fundamental review of the current system is needed.
This section presents concrete policy improvement proposals and outlines a vision for a more resilient and diverse future for Japanese agriculture.
Specific Policy Reform Proposals
Based on the structural challenges of Japan’s agricultural subsidy system, we propose realistic and effective reforms.
Ensuring transparency and fairness is essential, along with designing a system where all farmers can benefit equally.
Increased support for young farmers and environmentally conscious practices is also critical.
We propose the following four practical reform strategies:
Improved Information Access and Simplified Procedures
Establish a unified information platform jointly managed by national and local governments where farmers can easily access subsidy details, application periods, eligible farm types, region-specific support, and sample forms.
The platform should feature intuitive search tools, FAQs, visual guides, and videos to ensure user-friendly navigation.
Some local governments are already leading the way. For example, Kamishihoro Town in Hokkaido has created a dedicated support site that allows farmers to easily search for and confirm subsidy information and eligibility.
In Fukui Prefecture, municipalities and agricultural cooperatives have partnered to dispatch agricultural supporters who visit elderly and small-scale farmers for on-site consultations.
Digitalization of application processes is also key.
Create a nationwide standardized online application system that allows simple step-by-step submission via smartphone or computer. Link it to identification systems such as the My Number card or agricultural certification systems to streamline verification.
Features such as application tracking, real-time update notifications, and electronic signature capabilities should be included to enhance user convenience.
Support for elderly or digitally inexperienced users is also essential.
Local agricultural cooperatives and municipal offices should assign subsidy advisors to offer in-person or phone-based assistance.
Mobile support teams that offer traveling consultation services or application assistance should be deployed to respond flexibly to local needs.
Flexible Support Systems Based on Region and Farm Size
Designing diverse and flexible support frameworks tailored to different management scales, crop types, regional characteristics, and farmer demographics (such as age and experience) enables the creation of a fairer and more effective subsidy system.
For example, large-scale farms can be supported with investment subsidies for improving production efficiency and implementing smart agriculture technologies, including the introduction of ICT (Information and Communication Technology) systems to secure labor.
ICT systems refer to solutions that utilize technologies such as computers, smartphones, sensors, and cloud services for task management, yield forecasting, and weather data integration—greatly contributing to the efficiency and labor-saving of agriculture.
Conversely, for small-scale farmers, focused support could include establishing local farmers' markets, adopting e-commerce platforms, or promoting branding of local processed products to diversify sales channels and boost local economic integration.
Additionally, for solo or elderly farmers, support packages that provide lightweight machinery or reduce physical workloads should be considered.
Differences in climate, terrain, infrastructure, and availability of regional resources should also be factored into policy design. Rather than enforcing uniform national standards, systems should be adaptable at the municipal level.
Some regions are already implementing such approaches. For instance, in Shihoro Town, Hokkaido, where large-scale field crop farming is dominant, subsidies are focused on smart agriculture using ICT and drone-based support tools.
In contrast, in remote island communities such as Goto City in Nagasaki Prefecture, special subsidies have been introduced to help small farms overcome logistics challenges by improving basic facilities and strengthening local direct sales.
These examples demonstrate how region-specific subsidy systems, tailored to mountain areas, islands, or suburban agriculture, help address regional disparities while promoting sustainable agricultural operations.
Enhanced Support for New and Young Farmers
To encourage entry into agriculture, a comprehensive support system that addresses multiple entry barriers is needed—not just financial assistance.
First, initial investments should be supported through expanded low-interest loan programs and grants with repayment waivers, covering land acquisition, facility construction, and agricultural machinery purchases.
Prefectures like Nagano and Miyazaki have already introduced “New Farmer Support Packages” that integrate land matching, financial aid, and housing support.
For inexperienced or young farmers, practical training programs—including on-the-job training (OJT) and agricultural business management courses—should be developed. Each region should assign agricultural advisors to assist them.
In Kumamoto and Hokkaido, collaboration with agricultural universities enables one- to two-year practical training programs to prepare participants for local farming careers.
Additionally, improving living support—such as migration aid, housing assistance, and matching with local communities—is essential for long-term settlement.
Startup-oriented agricultural entrepreneurs also need “hands-on” support (伴走支援), including help with business planning, securing funding, and developing sales channels, to ensure the sustainability of their ventures.
Subsidy Systems Emphasizing Environmental and Community Contributions
It is important to establish systems that evaluate not only production volume but also agriculture’s positive impact on the environment and community.
Qualifying initiatives might include reduced use of pesticides and chemical fertilizers, organic farming, and the use of renewable energy like solar power or biomass.
Farmers who organize food education classes with local schools, host farming events for seniors, or actively participate in local festivals should also be recognized for their community involvement.
Such farmers could receive bonus points in subsidy applications or be prioritized in special funding categories to promote agriculture’s societal value.
Some Japanese regions have already adopted these kinds of systems.
For example, Sado City in Niigata Prefecture offers tiered subsidies for organic and low-pesticide farming as part of its “Coexistence with the Crested Ibis” agricultural initiative. Community engagement and environmental education are also included in evaluation criteria.
In the Aso region of Kumamoto Prefecture, grassland conservation agriculture is subsidized to maintain scenic pastures and pastoral traditions, along with school collaboration and farming experience programs.
In Tōmi City, Nagano Prefecture, participation in community activities is factored into subsidy decisions for new or relocating farmers, helping integrate agriculture into local society.
These examples show that subsidy programs prioritizing environmental preservation and community contributions already exist and offer models for national policy design.
This shift supports the transition toward “sustainable agriculture” that coexists with local communities and the environment, moving beyond traditional metrics like output and efficiency.
Outlook for a Sustainable Agricultural Support Model
To ensure the long-term stability of Japanese agriculture and secure food safety, a system that balances sustainability and diversity is essential.
Building an agricultural framework that can adapt to changes such as climate change and population decline requires more than a focus on yield or productivity. It also demands the development of high-value-added agriculture that leverages local resources and cultural heritage.
For example, branding products based on regional specialties and traditional farming methods, as well as promoting “experience-based agriculture” tied to tourism and education, are effective ways to strengthen ties with consumers.
In practice, Obuse Town in Nagano Prefecture has supported its economy by integrating tourism with agriculture, centered around local specialties like chestnuts and wine grapes.
Introducing green agriculture—farming practices that minimize environmental impact—also enhances international appeal and boosts export competitiveness.
For instance, Shizuoka Prefecture promotes organic JAS certification in tea production, gaining high praise both domestically and abroad for its environmentally friendly approach.
Furthermore, combining smart agriculture using technologies like ICT and AI for operational efficiency and risk management is crucial for attracting younger generations and transforming farming into a more appealing industry.
As a case in point, Minamikyushu City in Kagoshima Prefecture has introduced tea plantation management systems using drones and IoT, achieving both labor savings and improved product quality.
Establishing a comprehensive policy framework that supports these multifaceted approaches will be key to sustaining Japan’s agriculture into the future.
Summary and Conclusion
Agricultural subsidies are a vital system that supports domestic agriculture—an indispensable part of national life and the economy.
However, the current system faces challenges such as biased distribution and structural inequities, concentrating benefits on certain farmers and regions.
Historical context and international comparisons reveal that disparities in access to information and a system that favors large-scale farms are among the most pressing issues.
So, what can we do to correct these imbalances and create a sustainable environment where more farmers can thrive?
There are many areas to address—from raising consumer awareness and strengthening community cooperation, to promoting public participation in the policy-making process.
What kind of support does agriculture in your region need?
Now is a crucial time to reflect on the relationship between agriculture and our daily lives.
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