TOKYO -- Japan aims to give a boost to its effort to quintuple farm exports over the next 10 years by expanding the range of agricultural operations funds can invest in.
Currently, special agricultural funds are only allowed to invest in Japanese agribusinesses. The scope will be expanded to include fishing, food processing, forestry and logistics industries under a bill to be introduced to the ordinary session of the Diet that begins January.
When farmers switch to a product for export, additional funding is needed to cover temporary losses in revenue and the costs associated with buying equipment. Agricultural funds help ease this transition, helping grow exports.
Japan exported a record 912.1 billion yen ($8.8 billion) in farm products last year. However, it failed to reach the 1 trillion yen goal.
The government aims to double farm exports to 2 trillion yen by 2025, and have the exports reach 5 trillion yen in 2030. To achieve that goal, the government hammered out a strategy at the end of November to expand exports of farm, timber, fisheries and processed food products.
The new rules will open up funding for companies that develop smart farming, as well as businesses involved in exporting, enabling the agricultural funds to support all phases of the food chain from production, transport, processing and overseas sales.
The Agribusiness Investment and Consultation -- a joint venture between the public-sector Japan Finance Corp. and the farm collective JA Group -- is one of the country's foremost agricultural funds. It had invested over 10 billion yen in over roughly 600 targets across the country by the end of October. Funds set up by regional banks will also be allowed to expand the scope of their activities.
As part of the plan, the government envisions not just exporting farm products as they are marketed at home, but tailoring them for overseas destinations. Also, investment in processing equipment that meets foreign specifications will also be necessary.
The government has designated 27 agricultural products, including wagyu beef, sake and strawberries, and set export goals for each item along with specific overseas markets to target. It plans to choose certain regions this fiscal year to focus on production for export, which will receive concentrated technical and financial support.
Expanding exports of food and agricultural products has been a policy focus for Prime Minister Yoshihide Suga since he was the chief cabinet secretary of his predecessor, Shinzo Abe. The third supplementary budget for fiscal 2020 and the draft budget for fiscal 2021 set aside more than 80 billion yen for this purpose.
The government will work to broaden overseas sales channels and negotiate looser regulations in export markets through cross-ministry collaboration.
