The government is pushing for "smart farming" by offering tax breaks for schemes that utilize technological innovation, as the industry faces a serious labor shortage amid Japan's rapidly aging population, a source familiar with the matter said Saturday.
Under the system, farmers, agricultural cooperatives, equipment manufacturers, food companies and local governments, among others, will work together to craft production innovation plans featuring technologies such as robots and artificial intelligence, the source said.
The government has designated the promotion of smart farming as a key policy alongside strengthening food security.
The tax burden associated with adopting new equipment and the registration of firms developing technologies based on compliance with the plan will be reduced, with the government aiming for the legislation's passage through the Diet next year.
Japan's farmer shortage is becoming more acute as they continue to age. As of February 2023, there were roughly 1.16 million farmers primarily making a living through agriculture.
However, about 60 percent of them were in their 70s or older, while around 20 percent were in their 60s, with only 20 percent in their 50s or younger.
The Ministry of Agriculture, Forestry and Fisheries aims to accelerate the adoption of labor-saving technologies, believing that an increase in productivity is needed to secure stable supplies of agricultural products in the country.
The adoption of high-tech equipment based on the certified innovation plan will be permitted to be recorded as expenses, reducing the corporate tax burden. The government will also provide long-term, low-interest loans for the purchase of such equipment.
Additionally, targeting startups authorized under the plan, registration and license taxes will be reduced for procedures such as establishing a company and capital increases, the source said.
