Agricultural Diversification in Japan

In recent few decades, Japanese agriculture has been facing many problems such as low profit rate, lack of labor force, abandonment of farmland, losing competitive competence for low-price, imported products, and so forth. One of the trials for encouraging Japanese agriculture by the government is agricultural diversification, which is a kind of restructuring value chain in order to gain profitability of farmers. The strategy is that, by integrating some elements of value chain of food industries including primary industry (agricultural production), secondary industry (processed food manufacturing), and tertiary industry (food retails and restaurants), and re-allocating farmers' business resources, farmers could be much more activated and their profit would be gained. In the past several decades, Japanese agricultural supply chain has strongly depended on Japan Agricultural Cooperatives (JA), and this caused some issues such as mismatching of demand and supply and low profitability of farmers. The policy of agricultural diversification was proposed to induce new integration of value chain and restructuring supply chain for solving these issues. This chapter presents some successful cases of agricultural diversification in Japan and infers the Key Factor of Success (KFS) of such trials.