Modernization of farm management practices: Experience from Japanese rice farming corporations

While conventional family-owned and -operated farms remain the most common structure, the number of Japanese agricultural corporations has increased in recent years as a result of changing policies. Some of them are probably starting to adopt modern corporate management practices to remain viable in a more competitive environment. However, changes in the business structure have not always been accompanied by changes in farm management practices. This study represents a theoretical and empirical investigation into farm modernization practices to provide perspective and recommendations to enhance farm business. Various aspects of farm modernization were considered, including temporal, economic, and functional modernization. Critical elements of farm modernization were examined using a structural equation model of surveys, wherein questionnaires were delivered to 2,260 agricultural corporations across Japan in 2014 and 2016, generating 669 usable responses from rice farming corporations. Overall, these corporations demonstrated moderate degrees of modernization, indicating that they have not yet completely transitioned from conventional management styles to modern corporate management and that the farmhousehold complex system still exists for many of them. It was also found that farm modernization is significantly affected by both production and business management systems, although it was unclear whether a farmer’s managerial capabilities were critical for farm modernization. The findings of this study indicate that current farming corporations may benefit from incorporating additional modernization practices. The analytical framework and results will help farmers to better understand their management practices and can also be used to help anticipate future farm management challenges and provide ideas for policy development in many other Asian countries.