JAPAN Law and Practice Contributed by: Eri Hirata, Takunori Kono, Naoki Matsumoto and Ikki Kawasaki, Nishimura & Asahi
9. Recent Developments and Future Trends 9.1 Regulatory and Legislative Developments Japan significantly amended its Basic Act on Food, Agriculture and Rural Areas (the “Revised Basic Act”) in June 2024. The former Basic Act, enacted in 1999, had four pillars: • securing a stable supply of food; • demonstrating the multifunctional roles of agricul- ture; • the sustainable development of agriculture; and • the revitalisation of rural areas. Approximately 25 years after its enactment, the envi- ronment surrounding agriculture had changed to a degree unforeseen at the time of the first Basic Act – as a result of heightened food security risks due to global food market volatility, increasingly serious environmental issues, and the expansion of overseas markets. The Revised Basic Act reflects these devel- opments and expressly incorporates “ensuring food security” as a core principle, in addition to the tra- ditional focus on ensuring a stable supply of food. The Revised Basic Act also introduces the principle of “establishing an environmentally harmonious food system”, signalling a strong policy shift towards sus- tainability and environmental stewardship. In April 2025, the government approved the Basic Plan on Food, Agriculture and Rural Areas (the “Basic Plan”), which sets out concrete policy measures under the Revised Basic Act. The Basic Plan is structured • promotion of exports and strengthening Japan’s ability to generate income from overseas markets; • food security and a sustainable food system for each citizen; • an environmentally harmonised food system and enhancement of multifunctional roles; • revitalisation of rural areas; • public understanding and engagement; and • responses to natural disasters. around seven pillars: • a stable food supply;
In addition, there are sector-specific mechanisms designed to resolve disputes related to the use of farmland, including: • intermediation for settlements by the Agricultural Commission (under the Cropland Act); and • agricultural mediation (under the Civil Mediation Act). 8.3 Creditor Protection and Collateral Enforcement Traditionally, agricultural financing was provided primarily by the JA and the JFC. However, with the increase in new entrants from other industries, the diversification of agricultural business entities, and the expansion of agricultural operations into midstream and downstream activities, private financial institu- tions have become increasingly active in agricultural lending. Certain legal constraints exist on private-sector loans; for example, enforcement of mortgages on farmland requires approval under the Cropland Act. For this reason, agricultural loans were typically small-scale and unsecured. In recent years, however, new financ- ing methods such as asset-based lending (ABL) using movable property as collateral have emerged, enabling the provision of substantial working capital loans. 8.4 Disputes in Uncompleted Transactions In Japanese agricultural transactions, it is common for contracts to be carried out without a written agree- ment or based on written agreements that lack suf- ficient specificity. As a result, disputes frequently arise due to uncertainties unique to agricultural products – such as reduced yields due to weather conditions, quality issues or delivery delays. Where these disputes cannot be resolved through negotiations between the parties, they are generally handled through civil mediation or civil litigation, as described in 8.2 Litigation and Arbitration Trends in Agribusiness .
46 A GRICULTURA L LAW 20 26
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