Smart farm in Japan.

Smart farm technology holds great promise for farmers struggling to grow Japan’s staple grain while wrestling with low prices.

Among the benefits: lower production costs, higher income and a workaround for the country’s chronic manpower shortage.

The new technologies, including drones that can spray crops with fertilizer and pesticides, and rice transplanting machines equipped with GPS, also have the potential to lower supermarket prices.

This will help farm businesses by helping to shore up Japan’s dwindling rice consumption and by making exports more competitive.

Tanaka Nojo, a rice farming corporation in Japan’s western Tottori Prefecture, plans to introduce smart farming this growing season. It has purchased chemical-spraying drones and a GPS-ready rice transplanter, which injects seedlings into paddy fields.

Including fruit orchards and vegetable fields, the farm has 120 hectares of planted area, 100 times the national average of 1.2 hectares.

The company expanded its operation by leasing adjacent farmland, but its growth slowed as the farm became too big for the available workforce.

With the new technology, “we will be able to reduce working hours by about an hour per day and it will help us expand further,” said the company’s president, Satoshi Tanaka. “We will be able to cut production costs by up to 10%.”

Fukuhara Farm, in central Japan’s Shiga Prefecture, introduced an automated rice transplanter last spring, aiming to reduce labor costs and increase production of the low-priced rice varieties that many restaurant operators prefer.

“It’s only a matter of time before the price for 60 kg of rice falls below 10,000 yen ($93),” said Fukuhara Farm Chairman Shoichi Fukuhara. “Our aim is to maintain an operation that can earn sufficient profit even after prices drop.”

According to Japan’s agriculture ministry, the average production cost nationwide for rice-growing households and corporations stood at 15,352 yen per 60-kg bag in 2018, down 20% from 30 years earlier. But production costs have stopped falling over the past five years or so.

“Although the [cost] reduction progressed, thanks to expanded [farm] scale, that seems to have reached its limit recently as it has become difficult to find people due to the labor shortage,” said an official with the ministry’s grain division.

Rice prices, meanwhile, have been on a long-term slide, squeezing farm income. And production costs have been creeping higher since the 2014 season, with consumers increasingly preferring premium brands that are more expensive to grow. “As brand awareness has grown in production areas, allowing [rice] to be sold for higher prices, moves to lower costs have lost steam,” said Yasufumi Miwa, a scholar at the Japan Research Institute.

Smart farming may help, but so far high-tech has had biggest impact in vegetable cultivation; progress has been slower with rice growing. “There have been almost no examples of [farmers] introducing the [smart farming] equipment, such as the sale of machines and use of related services, which have [only] begun in the past year or two,” according to an official at the agriculture ministry’s research promotion division.

In fiscal 2019, the ministry launched the first smart farming demonstration project for rice cultivation. By renting equipment to agricultural cooperatives and others across the country, the ministry will study the effectiveness of the new techniques in lowering costs.

It estimates that smart farming could cut the man-hours required for rice cultivation in half while boosting yields by 10% to 20%.

The price of the sophisticated equipment, which is between 10% and 50% higher than that of conventional farm implements, is a hurdle. But as more farmers introduce high-tech machinery, the techniques may take hold.

Japan’s rice growers need to make their product more price-competitive. Domestic prices are still far higher than those on the world market.

They face a further challenge: The food service industry is buying more cheap imported rice and turning away from pricier domestic products. And although exports hit an record annual record in 2019, sales “are limited to a few affluent people,” said an official at a major rice wholesaler.

Lowering retail prices is crucial if Japan is to halt the decline in rice consumption and spur export demand. Rice-growing areas have trimmed the amount of land under cultivation as consumption has fallen. The government tried for nearly half a century to shore up prices by nudging farmers to take land out of production.

But the gentan policy was scrapped after the 2017 season as consumers continued to shun the traditional staple and the program fell short of its goals.

Smart agriculture has the potential to succeed where previous government policy has failed, halting and perhaps reversing the downward spiral in rice consumption and production in Japan.