Launching primary industry into growth orbit through promoting innovation in rural areas

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1 Ministry of Agriculture, Forestry and Fisheries Launching primary industry into growth orbit through promoting innovation in rural areas n rural areas, there are many kinds of resources and assets such I as land, water, wind, heat, biological resources, history, and culture, which can be one of the biggest advantages towards future economic growth. However, because of the weakness of the linkage of their value chain between primary, secondary, and tertiary industries, their potential couldn t make it clear so far. 1

2 t is necessary to facilitate new cooperation between farmers I and industrial players. By the cooperative linkage, expanding agribusiness, which unified production, processing, retail, and tourism; promoting new business with frontier technology; and introducing renewable energy are encouraged. T he Food Industry Affairs Bureau, newly established on September 1, 2011, takes charge of various fields, which are related with not only food, but also rural resources and environment relating to food production. A nd our most important challenges are to create and promote new business using rural resources and assets as well as to enhance linkage between farmers and consumers through food and environment. 2

3 Our Target: Making a 100 trillion yen related industry grow bigger I n 2009, total production of primary industry (agriculture and fishery) stood at 11 trillion yen. M eanwhile, agriculture and food related industries including relevant secondary industry (manufacturing industry) and tertiary industry (distribution and food service industry) are part of the leading industries in Japan, as their production values accounted for 11% of its total (876 trillion yen). Total Production value on agriculture and food related industries(95.3 trillion yen) 3

4 griculture and rural areas in Japan face serious problems such A as decreasing income, shortage of motivated farmers, and aging society. Improving agricultural productivity and enhancing agriculture s competitiveness are urgent tasks. O n the other hand, rural areas are repositories of various resources and assets such as land, water, and biomass. And consumers expectations for primary industry are growing because of its ultimate source of life influential to the human health and food safety. However, their potential hasn t been realized fully, since large matching costs with other industries and scarcity of capital of farmers prevent the linkage of the value chain between primary, secondary, and tertiary industries. o overcome serious situations on primary industry, enhancing T and connecting the value derived from the effort of farmers to secondary and tertiary industries is essential. Leading farmers to tie up with other industries will help to achieve this end. The Potential of the sixth industry, that is, collaboration of Primary, Secondary, and Tertiary Industry 4

5 Main Measures: Making new combinations for creating values in a business way. To develop joint enterprise centering on primary industry Under the prolonged deflation economy with the yen appreciation, it has become difficult to create new jobs and income through inviting enterprises. We should promote the establishment of new businesses in the local economy by supporting the collaboration of primary, secondary, and tertiary industry to develop new products and to open up new markets. For those farms that pursue more success in collaboration with other industrial players, the newly coming Fund for Economic Growth on Agriculture, Forestry, and Fisheries (tentative name) will surely be helpful. This fund will promote the establishment of a new joint enterprise centering on primary industry and to connect the value derived from the effort of farmers to secondary and tertiary industries. To expand exporting markets In Japan, the market for Agriculture, Forestry, Fisheries and Food (AFFF) products are shrinking because of declining and aging population. On the contrary, there are markets that have potential with a rapidly growing economy and highly increasing population overseas especially in Asia, and expanding into the markets is one of the most important missions for us. However, the situation of exporting Japanese AFFF products is a tough situation owing to continuous appreciation of the yen and the impact of severe accidents at TEPCO s Fukushima Daiichi Nuclear Power Plant. In order to recover and expand export of Japanese AFFF products, we will accelerate persuading foreign countries to ease and abolish the import regulation on Japanese food products, implementing the strategic marketing under the Japan Brand, and appealing Japanese food culture to the world. Thus, we strengthen the management base of Japanese Agriculture, Forestry and Fisheries and Food. 5

6 To promote the development of the food industry The food industry plays an important role as a stable supplier of food and, at the same time, the biggest demander of domestic agricultural products. They are expected to drive economic growth by contributing to the efforts for forming a value chain with farmers as one of the biggest industrial sectors in Japan. We will improve the domestic market and develop foreign markets in a strategic way, while promoting innovation in collaboration with different industries. At the same time, we attempt to build supply chains that can operate even in case of disasters and to restore the public s confidence at home and abroad in Japanese food and agricultural products. To introduce renewable energy Since the accidents at TEPCO s Fukushima Daiichi Nuclear Power Plant, there is a need for implementation of a self sustaining and diversified energy system through introducing renewable energy and leading to sustenance and development of regional society. Rural areas contain ample resources such as land, water, and biomass and have huge potentials for renewable energy to be introduced. We aim to bring forward revitalization of rural areas through promoting renewable energy generation, which is reconcilable with sound development of agriculture, forestry, and fisheries and brings about an increase of regional incomes. To foster biomass industry Rural areas are repositories of various resources and assets such as land, water and biomass. We work out a roadmap to develop a new technology and strategy to lead the biomass industry into the growth sector, and then foster the industry that makes use of local biomass resources with relevant Ministries. To facilitate tactical protection and utilization of intellectual property rights(iprs) Japanese agriculture, forestry, and fisheries have global strength in superior technology and variety. Many food and agricultural products are produced with regional specialties characterized by inherent natural environment. We will facilitate the efforts to surely protect Japanese IPRs and to convey the values of IPRs to consumers, as a result of coping with trademark squatting by foreign countries and introducing a geographical indication protection scheme, and so on. 6