TOKYO, JAPAN — With a loss of farmland, an aging labor force, changes in consumer diets and the opening of markets, Japan is highly reliant on imports to feed its people.  

Its food self-sufficiency ratio on a caloric basis was 38% in 2021, according to the nation’s Ministry of Agriculture, Forestry and Fisheries, making it one of the lowest self-sufficiency rates among the world’s top economies. Last year, Japan imported $70.2 billion of agricultural products, a 16.4% increase from pre-COVID and more than record-level imports in 2011 and 2012. 

Overall, it is the second largest agricultural product importer in the world. Although it is self-sufficient in rice production, Japan imports 90% of its wheat needs, 80% of its flour and 100% of its corn.

In fall 2022, inflation rose faster than at any other point over the last eight years, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA). Core consumer prices, which include food staples like bread and noodles, increased 2.8% in August. The government responded by freezing the price of imported wheat six months, payments to livestock farmers for compound feed and support to mitigate higher fertilizer prizes. 

To counteract the longer-term supply chain issues caused by the pandemic and war in Ukraine, Japan introduced the “Food Security Reinforcement Policy Framework” at the end of 2022. It aims to lower import dependence while increasing domestic production of wheat, soybeans, feed grains, hay and fertilizer inputs. 

“The policy framework also stresses the need for appropriate pricing of agricultural products to reflect the true cost of production and makes farming sustainable,” the FAS said. 

When the wheat price freeze expired in March, the farm ministry said it would raise the price starting in April by an average of 5.8% from the previous year, to reflect higher import prices. Japan buys milling wheat through import tenders and then sells it to domestic millers at prices set twice a year. 

Food companies already were looking at the end of 2022 to replace wheat flour with rice flour due to the increasing cost of imported wheat. Local governments were providing subsidies for products using local rice flour. 

“We need to reduce dependence on wheat imports and strengthen the domestic production base by switching from imported wheat to domestic wheat and rice flour,” said Kenichi Hirano, director of the grain trade and operation division of the ministry, during a news conference. 

Food security future

Farmland utilization in Japan has declined steadily since the 1960s, being lost to industrial use, roadways, residential use and other types of urbanization, according to a September 2022 report from the FAS on long-term trends in Japanese agriculture. At the same time, the decline and aging of Japan’s population has led to an increase in farmland abandonment. Overall, cultivated farmland has declined 51% since 1960. 

The total number of farms has fallen to 1.1 million from 2 million in the last 15 years and the proportion of farmers ages 65 and above continues to increase, the FAS said. Only 12% of Japan’s land is arable so terraces are used to farm in small spaces. 

All of these factors have made Japan reliant on imports for 60% of its food on a caloric basis. Add in the COVID-19 pandemic and war in Ukraine, and the nation’s food security is even less certain. 

The new food security framework aims to address those concerns by boosting domestic production. Its targets for 2030 include increasing production areas compared to 2021 by 9% for wheat, 16% for soybeans, 32% for feed crops and 188% for rice for rice flour. 

Japan aims to do this by increasing production of wheat and soybeans in upland fields and promoting conversion of paddy fields into upland fields. The ministry would provide support payments for production in those areas as well as facilitate cluster production and provide support payments for irrigation systems, machinery and drier purchases. It also would provide support payments for farmers who produce wheat and barley as a second crop after rice harvest, the FAS said. 

The framework also looks to encourage the use of rice flour from domestic rice as a substitute for wheat flour made from imported wheat. The ministry will provide support payments to rice flour manufacturers and food processors to cover some of the costs for developing products that use rice flour as well as the purchase of machinery and to build facilities for manufacturing rice flour and rice flour products. It also will provide support payments to farmers for the purchase of machinery and facility construction to increase seed production for rice varieties suitable for rice flour for making bread and noodles. 

Rice flour production is done on a small scale, so raw material costs and manufacturing costs are higher than wheat flour. Additionally, rice flour is not well suited for noodle production, and so far, it hasn’t been used for mass production.

Crop production

Rice production in 2022-23 is expected to drop 2.8% to 7.45 million tonnes, based on a reduction in harvested area and yield from the 2021-22 bumper crop. Table rice production has declined due to weak demand, low sales prices and support payments to grow different crops in paddy fields. Planted area for table rice decreased by 43,000 hectares while the estimated acreage for feed rice has increased. 

“Many producers are unwilling to invest in equipment and inputs necessary to produce new crops,” the FAS said. “Industry sources expect feed rice to remain the preferred alternative. In addition, demand for feed rice is on the rise and easy to commercialize.”

Consumption is estimated at 8.2 million tonnes, unchanged from 2021-22. A 20% increase in feed consumption will offset declines in table rice, the FAS said. 

Wheat production in 2022-23 is estimated to decrease 9% to 1.05 million tonnes due to a yield decline from the near-record yield last year in Hokkaido. Production in that region accounted for 66% of the national production in 2021-22. 

Three consecutive years of large harvests have increased supplies and lowered planting auction prices, the FAS said. Still, wheat acreage increased in 2022-23 and is expected to do so again in 2023-24 because of rising domestic prices. 

Flour milling

Consumption in 2021-22 is estimated at 5.5 million tonnes, a drop of 1.8% based on slower flour sales. Rising prices will hamper a full recovery from pandemic lows, but a recovery in tourism is expected to support hotel, restaurant and institutional demand in 2022-23. 

The number of flour milling companies in Japan has decreased to 72 companies currently from 129 in 1998. The top four companies — Nisshin, NIPPN, Showa Sangyo and Nitto Fuji — and their affiliates have about 80% of the total market share. 

Large flour millers are diversifying into food processing and decreasing dependency on the flour business. They are looking at international facilities for flour milling, pasta processing and premix flour manufacturing, according to the Washington Grain Commission.