2025 Sees Agricultural Bankruptcies Exceed 100 for the First Time
In 2025, bankruptcies among Japanese agricultural corporations reached 103 cases, marking the highest level in the 30 years since 1996. This is the first time bankruptcies in this sector have exceeded 100, signaling that Japanese agriculture stands at a critical crossroads.
According to research by Tokyo Shoko Research, total liabilities amounted to approximately 40.28 billion yen, more than doubling compared to the previous year. A major contributing factor was the collapse of a vegetable production company in Okayama Prefecture with debts of approximately 15.7 billion yen.
Weak Yen and Soaring Material Costs Hit Operations Hard
The primary cause behind the surge in bankruptcies has been the sharp rise in material costs driven by yen depreciation. Since 2022, compounded by Russia's invasion of Ukraine, prices for feed, fertilizers, and energy have skyrocketed. Bankruptcies attributed to "high prices" reached 20 cases, a 25.0% increase year-on-year.
Agriculture is an industry where passing on costs to consumers proves difficult, and it faces a structural problem where rising raw material costs cannot be reflected in selling prices. A Tokyo Shoko Research representative noted that many businesses "could not pass on rising raw material costs to their prices."
Worsening Labor Shortages and Succession Crisis
Bankruptcies due to "labor shortages" surged to 14 cases, a 133.3% increase from the previous year. Of these, 7 were caused by lack of successors, up 75.0%, highlighting the severity of the succession problem in Japanese agriculture.
The average age of agricultural workers in Japan now exceeds 69 years, with approximately 50,000 farmers leaving the industry annually. According to the Ministry of Agriculture, Forestry and Fisheries (MAFF), fewer than 30% of farm operators can secure management successors within the next five years.
Bankruptcy Breakdown by Sector and Region
By Sector
Breaking down bankruptcies by industry type, "crop farming" including vegetable cultivation led with 64 cases (62.1% of the total). Within livestock farming, significant increases were observed in:
- Dairy farming: substantial year-on-year increase
- Floriculture (flower cultivation): substantial year-on-year increase
- Beef cattle production: substantial year-on-year increase
By Region
Regionally, Kyushu led with 24 cases, followed by Kinki with 17, Chubu with 16, Kanto with 13, and Tohoku with 12. Hokkaido and Hokuriku both recorded the lowest at 3 cases each. A notable characteristic is that bankruptcies are occurring nationwide, centered on regions where agriculture is prominent.
Bankruptcies Concentrated Among Small and Micro Enterprises
By capital, companies with less than 10 million yen accounted for 82 cases (79.6%), revealing that small and micro-scale agricultural corporations are bearing the brunt of the crisis. By type, straight bankruptcies (liquidation) dominated at 79 cases (76.6%), indicating most businesses chose dissolution rather than business rehabilitation.
During the COVID-19 pandemic, subsidies and grants provided support, keeping bankruptcies to just 42 cases in 2021. However, as support measures have been scaled back, "exhaustion bankruptcies" among financially weak operators have increased.
Structural Challenges Facing Japanese Agriculture
Low Food Self-Sufficiency
Japan's food self-sufficiency rate stands at 38% on a calorie basis (fiscal 2023), the lowest among developed nations. The country depends on imports for approximately 90% of wheat and nearly 100% of corn, leaving it vulnerable to geopolitical risks.
Rising Abandoned Farmland
Japan's agricultural land has decreased from 4.83 million hectares in 2000 to 4.3 million hectares in 2023. MAFF has warned that approximately 30% of domestic farmland could lose its cultivators within the next decade.
Progress and Challenges in Corporatization
According to MAFF data, there were 21,857 farmland-owning corporations and 4,544 leasing corporations in 2024, showing an increasing trend in corporate entry into agriculture. However, bankruptcies are concentrated among financially weak small-scale operators and inexperienced new entrants, suggesting that corporatization does not necessarily lead to stable management.
Government Response and Future Outlook
In 2024, the Japanese government revised the Basic Act on Food, Agriculture, and Rural Areas, explicitly positioning food security as a core principle. In 2025, the Basic Plan on Food, Agriculture, and Rural Areas was approved by the Cabinet, setting the following targets:
- Improving food self-sufficiency rates
- Maintaining total farmland area
- Securing core farmers aged 49 or younger
Additionally, efforts toward structural reform are advancing, including expanded subsidies for smart agriculture and a requested fourfold increase in budget for strengthening farmland bank functions.
Japan at a Crossroads: The Future of Agriculture
The record-breaking bankruptcies among agricultural corporations symbolize the complex challenges facing Japanese agriculture. An aging population, successor shortages, soaring material costs, difficulty passing costs to consumers, and low food self-sufficiency—these interrelated problems are structural and difficult to resolve in the short term.
On the other hand, new possibilities are being explored, including the use of technology, advancement of corporate management, and export expansion. Japan's agriculture now stands at a critical juncture that will determine whether it can regenerate as a sustainable industry.
How is your country dealing with aging farmers and successor shortages in agriculture? What initiatives are being taken to improve food self-sufficiency? We'd love to hear your thoughts in the comments!
References
- https://www.tsr-net.co.jp/data/detail/1202302_1527.html
- https://news.yahoo.co.jp/articles/ade6c22fd016d4f22281179dd059215d03d43233
- https://www.oecd.org/en/publications/2025/10/agricultural-policy-monitoring-and-evaluation-2025_354e7040/full-report/japan_d94ab3f7.html
- https://eastasiaforum.org/2024/11/07/cultivating-change-in-japans-agricultural-policy/
- https://practiceguides.chambers.com/practice-guides/agribusiness-2025/japan/trends-and-developments
Reactions in Japan
Material prices are 1.5 times what they were 3 years ago, but wholesale rice prices barely changed. It's impossible to make a profit under these conditions. No wonder young people don't want to farm.
103 bankruptcies may seem small, but including closures and suspensions, the reality is much worse. Don't forget that 50,000 farmers leave agriculture annually, not captured in these statistics.
Three dairy farms near us closed last year. Feed costs are so high that making milk means bigger losses. Unless the government enables price pass-through, Japan's dairy industry is finished.
This is the consequence of the government relying on cheap imports instead of protecting domestic agriculture. What's the plan for food security in case of emergencies?
The business model is broken if it can't survive without subsidies. But the market doesn't allow price competition without them. We need serious discussion on how to resolve this dilemma.
We were told corporatization would improve efficiency, but reality is harsh. Scaling requires capital investment, but I've seen many peers crushed by inflation before recovering their investments.
So cheap vegetables at supermarkets come at farmers' expense? As consumers, it's time we think about what we can do.
Kyushu having the most bankruptcies is surprising. I thought large-scale farming was thriving there, but I guess that also means bigger business risks.
They talk about smart farming, but how many farmers can afford the initial investment? The gap between ideals and reality on the ground is just too wide.
The 38% self-sufficiency rate gets all the attention, but the real issue is losing the producers who support it. Setting numerical targets alone is meaningless.
The succession crisis is severe. Average farmer age in my district exceeds 70. In 10 years, local agriculture will collapse. We need fundamental measures at the national level.
Sourcing domestic ingredients is getting increasingly difficult. Quality is certainly good, but for stable supply, we have no choice but to rely on imports.
With the weak yen making imports expensive too, why isn't domestic produce selling? Maybe pricing is fundamentally wrong. Distribution margins need review.
It's all negative news, but technology-agriculture fusion definitely offers new possibilities. High-value farming targeting export markets is the way forward.
My parents want me to take over, but honestly I'm hesitant. I love the work, but I can't see a viable business vision. Depends on how policies change, I guess.
Considering a potential Taiwan contingency, food security is really crucial. Money means nothing if there's no food in emergencies. We should value agriculture more.
American farmers face similar issues. As consolidation into large-scale operations continues, family farms are disappearing. Japan's case reflects challenges common to developed nations.
In Germany too, many farms couldn't survive without EU agricultural subsidies. But 38% food self-sufficiency is shocking. Germany maintains about 90%. Japan should take this more seriously.
China is also aging, but rural-to-urban migration is severe. There's much to learn from Japan's experience. I'm particularly interested in their smart farming initiatives.
In France, farmer protests are frequent. Frustration with EU environmental regulations and low produce prices. Unlike Japan, French farmers voice their complaints loudly, but the underlying issues are similar.
Korea also has low food self-sufficiency and shares Japan's concerns. FTAs have put farmers in difficult positions. I hope both countries can cooperate to find solutions.
Australia is a food exporter, but agriculture is always at risk from droughts and bushfires. We export a lot to Japan, so we're interested in Japan's agricultural policy trends.
Young people leaving farming is serious in Spain too. Urban jobs seem more attractive everywhere, perhaps. We need to change agriculture's image.
Vietnam exports agricultural products to Japan, but we learn much from Japan technically. Japan's agricultural decline is a loss for Southeast Asia too.
Post-Brexit UK is also at a turning point in agricultural policy. Subsidy reforms are hurting small farmers. Japan's situation is not someone else's problem for us.
Brazil is a major agricultural power, but family farms still face tough competition. Scale differs from Japan, but policies to protect small farmers are important.
Farmer suicides are a social issue in India. Economic pressure is universal. Japanese technical support and knowledge sharing could improve developing country agriculture.
Italian agriculture is also aging, but we protect value through designation of origin systems (DOP/IGP). Japan should strengthen regional brand protection more.
Taiwan also faces aging farmer issues. Japan is an important export destination for Taiwanese agricultural products, so we're watching Japan's agricultural market trends.
Farmland consolidation is advancing in Canada too. The reality is you can't survive without scaling up. But beautiful rural landscapes like Japan's terraced rice paddies can't be preserved through large-scale farming.
Poland saw increased agricultural investment after EU membership, but young people still migrate to cities. Japan's situation shows how hard it is to balance economic development and agricultural preservation.