Japan to Raise Smart Farming Loan Caps 10-Fold

Tokyo, Feb. 25 (Jiji Press)–Japan’s agriculture ministry will raise the caps on low-interest loans by up to 10-fold under a program aimed at helping farmers improve their efficiency through investment in smart farming, informed sources said Wednesday. The ministry also hopes the loans will be used by farmers seeking to expand into large-scale farming and agricultural processing to cope with inflation. Under the loan program, local and national governments subsidize interest payments for up to 20 years. The loans can be used to introduce smart farming equipment such as autonomous tractors and pesticide-spraying drones, as well as distribution and processing facilities. The ministry is considering raising the current ceiling for individual farmers from 18 million yen to as much as 200 million yen and for agricultural corporations from 200 million yen to 700 million yen. It plans to submit legislation necessary for the change to the ongoing parliamentary session. New loans extended under the program in fiscal 2024 totaled 58.1 billion yen, equivalent to just over 10 pct of all agricultural loans offered by private-sector financial institutions. Although loans under the program can be used for various agricultural purposes and demand is strong, there have been calls to raise the caps, as the current limits fall short of funding needs. Inflation and rising interest rates have further constrained capital investment in the agricultural sector, which faces an aging farmer population and an urgent need to nurture successors. END [Copyright The Jiji Press, Ltd.]