Japan’s government is planning to draft legislation that would transform the country’s powerful agricultural co-operatives, and reform the country’s regulations on foreign direct investment in agricultural operations, and its rules regarding agricultural land ownership. After his party’s election victory on December 14th, Prime Minster Abe has targeted agriculture a sector of growth for the country and is planning to overhaul the way agribusiness is conducted. The new legislation would allow businesses to own more than a 50% stake in farming enterprises and would allow businesses to own agricultural land outright. Currently, business may only lease agricultural land and may only hold less than a 50% stake in any agricultural operation. The liberalization of regulations will bring much needed foreign direct investment to Japan, which lacks in comparison to other developed nations. The average age of Japan’s farmers is 66 years old and the average acreage is five hectares. Declining production, increasing inefficiency, and trade barriers have made food more expensive for Japanese consumers compared to other countries. Japan is in the middle of trade negotiations through the Trans Pacific Partnership and has agreed with the U.S. to a significant increase in imports. Together with the move toward free markets, consolidation, land ownership, and the opening to investment companies, major changes could be on the horizon for the country’s agricultural and agribusiness industries.
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