March 29, 2017 1:15 pm JST

Toyota bringing 'kaizen' to Japan's farms

Ishikawa, in central Japan, aims for farms that hum with efficiency

MASAAKI KUDO, Nikkei staff writer

A Toyota employee gives a presentation on raising agricultural productivity in Ishikawa Prefecture in March.

NAGOYA, Japan -- Toyota Motor is using its vast knowledge of production management systems and process improvements to help Japanese farmers handle their heavy workloads.

The farming industry, facing a shrinking workforce, is joining forces with Toyota to become more productive. In return, Toyota can provide its veterans engineers with an opportunity to use their experience to help rejuvenate the farming industry.

Toyota and Ishikawa Prefecture, on the Sea of Japan coast, signed an agricultural partnership agreement on Friday. Starting in fiscal 2017 beginning in April, the automaker will teach its "kaizen" ("continuous improvement") production system to agricultural workers in the prefecture's municipalities.

Ishikawa Gov. Masanori Tanimoto said the same day that the development of agriculture depends on taking advantage of both worker experience and fresh ideas. The prefecture's farming industry has been plagued by a labor shortage.

Ishikawa is a rice-growing region, with the grain accounting for more than half agricultural output. It also produces vegetables and fruit. Faced with challenges such as slumping market conditions, rising input costs and aging farmers, the prefecture hopes to learn from Toyota's highly efficient production methods.

Toyota has been working with farmers for several years. In 2011, the automaker began providing support to an agricultural corporation in Aichi Prefecture, in central Japan, where Toyota's headquarters is located. Tanimoto first sought help from Toyota in 2014. The automaker began working with five agricultural corporations in Ishikawa, introducing its cloud-based agriculture support system.

The system gathers data such as the amount of acreage under rice production and the varieties grown. It also helps farmers manage in real time aspects of the job such as the progress of work, application of fertilizer and monitoring weather conditions. The farming companies Toyota partners with work to cut waste by standardizing the amount of time spent on each farming operation and sharing information by smartphone, for example.

Takemoto Farm in Nomi, Ishikawa Prefecture, which introduced the system in 2014, saw its profits jump 8% over three years despite falling rice prices. The farm eliminated wasteful spraying of herbicides, reducing labor costs and doubling production of rice for risotto -- 90% of which is imported.

Although processing rice for risotto takes three times as long because of extra steps involved in milling, for example, profitability rose and quality improved as workers managed to cut waste, said Shogo Takemoto, a spokesman for the farm.

Shigeki Tomoyama, a senior managing officer with Toyota overseeing new businesses, said introducing the system is not sufficient. "The most important thing is to change the employees' mentality so they continue improving," he said.

Developing talent

Toyota sends employees to 26 agricultural corporations in six prefectures, but has limited manpower. So it plans to teach Ishikawa Prefecture's 10 agricultural advisers how to implement the system, as well as how to gather and analyze data, starting in fiscal 2017. It aims to increase farmers' productivity by passing on this expertise on to the municipalities.

According to the Ministry of Agriculture, Forestry and Fisheries, the amount of abandoned farmland in Japan has jumped 70% over the past two decades. The country's agricultural workforce fell 8% on the year to 1.92 million last year, falling below 2 million for the first time. The number is half what it was 20 years ago.

There are bright spots, however. Aeon Agri Create, an agricultural corporation affiliated with supermarket chain Aeon, received 100 times more job applications than job openings for the third straight year. Many young people are apparently interested in farming careers.

The government is trying to help farmers increase their earning capacity, but the industry faces other challenges besides a labor shortage, such as difficulties in reforming the distribution system. Another problem is the differing interests of full-time and part-time farmers. For young people seeking jobs in agriculture, stable employment and income are crucial.

Toyota hopes to spread the Ishikawa model to other parts of Japan, eyeing partnerships with some 100 agricultural corporations. "We want to propose a new agricultural model, including logistics and sales channels," Tomoyama said.

For Toyota, which sells 10 million cars annually, environmental efforts and partnerships with municipalities are vital to its business. If the automaker's production expertise can improve the competitiveness of farmers in Japan's smaller towns, it will demonstrate the company's commitment to these communities.

At the same time, Toyota's focus on helping farmers with productivity and production management will help it develop its own talent as many of its experienced engineers move toward retirement.

Toyota Motor Corp.

Japan

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AEON Co., Ltd.

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