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.

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!

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