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When it comes to new smart farming technologies, EU companies should be well-placed for drones and precision farming opportunities in Japan, which are expected to grow exponentially.
Thanks to a wide range of topological features and rule reinforcement as well as continuous rules. areas such as self-driving cars and spray regulations.
Another interesting trend is the increased participation of companies not yet associated with agriculture. Not only are ICT companies like NTT or Fujitsu participating in the smart farming market, but companies like TEPCO have identified the smart farming sector as a new area to apply their know-how and as a promising new source of revenue.
Added to this is the strong sales of domestically produced agricultural machinery. While the tractor and combine markets are almost completely dominated by the major Japanese farm equipment manufacturers (Kubota, Yanmar, Iseki, Mitsubishi-Mahindra),
European equipment manufacturers are gaining a good reputation in Japan and are known for their high quality and modern devices with technology.
Future-oriented. The ease of handling and operator convenience are especially appreciated. Demand in Japan is largely for assistive and labor-saving technologies to combat the dwindling number of farmers.
In the conventional agricultural machinery market, European small and medium-sized enterprises (SMEs) are in the best position to export dairy machinery as well as other cultivation, crop preparation and cultivation machinery.
Tariff-free imports of agricultural machinery under the Economic Partnership Agreement (EPA), government subsidies for pilot projects, for example, and the vast potential for automation in Japanese agriculture offer incentives various.
A key element may be the establishment of a rehabilitation framework for European subsidiaries. When it comes to new smart farming technologies, European SMEs should be well positioned in drones and precision farming solutions,
which are expected to grow significantly in the coming years due to unique Japanese topological features and regulatory tightening as well as moving regulations ahead.in key areas such as regulations regarding unmanned vehicles and pesticide spraying, for example.
This type of technology can be easily transferred and the necessary tools in the form of WAGRI or QZSS data platform are available.
Intelligent agricultural services such as farm management support, POS solutions sales support, agricultural information sharing and management, or supply chain solutions, especially in the dairy and livestock sectors,
are also key areas. However, access to the service market is very difficult and requires a local coordinator with good knowledge of local policies.
When entering the smart farming market in Japan, unique challenges need to be considered. Trust in local Japanese companies and Japanese brands, especially domestic full liners, is a major problem and Japanese companies are often preferred by the government.
In addition, the language barrier remains a major problem in Japan, especially in many more traditional business sectors such as agriculture.
The key to success is an independent analysis of the target market segment, as well as competitors and potential partners. A local partner is highly recommended and ideally a local branch with a Japanese speaking manager.
It is also necessary to consider customer service options, such as training or maintenance. While much can be done remotely, especially in software areas. Japanese customers emphasize the importance of staff support (ideally Japanese) on the site.
Finally, it is important to note that the challenge of sustainable and sustainable agriculture is not just a national issue. Japan enjoys excellent relations with Southeast Asian countries, and opportunities for third-country partnerships with Japanese companies cannot be neglected.
Japanese companies often look for opportunities in Southeast Asia, and demand in these populous countries like Indonesia, Myanmar or Cambodia, especially for technology and solutions in the food and agriculture sectors, is huge.
Business Opportunities for European SMES
Looking at the market size and growth forecasts, it is clear that the strong development phase of the smart farming market in Japan is currently going on for the coming years. 
This progress is politically supported by a comprehensive MAFF implementation plan for smart farming technologies and services.
Business Opportunities for European Companies Vary by Specific Market Segment
The field of cultivation support, such as cloud support services or on-site environmental control, is already well developed, and there are many products on the market. Growth has been stagnant since 2017 and the segment is unlikely to grow further.
Solutions that support management such as accounting software and others are predicted to be growth areas as they are low-end areas.
Key areas are, for example, solutions for the exchange and management of agricultural information (resources, land, boundaries, property rights) or production management solutions that help manage the supply chain.
However, both of these areas require specific knowledge of the Japanese agricultural market, its food supply networks and accounting systems. Thus, reaching out to this sector for foreign companies is very difficult, and success requires a strong local partner with good knowledge of these topics.
Drones and precision farming are the most promising areas because such technologies are easily adaptable. In particular,
the excellent infrastructure and regulatory framework for drones (e.g. the Drug Control Act, the Civil Aviation Act) and autonomous driving (advanced regulation of unmanned vehicles) is a “place”; it's great, also for European companies, to test and sell their products .
This includes, among other things, unmanned technology, for example. for judicious use of fertilizers or landslide risk assessment and other disaster management technologies. Since many systems are not yet fully ready for the market, it may make sense to work with Japanese companies to develop the technology.
Robotics is slightly different from previous sectors as market forecasts predict only modest growth through 2025. This is in line with MAFF’s rolling outline, which has robotics the longest time before it is really adopted in a big way. The priority sectors in agriculture, forestry, fisheries and food for the introduction of robotics are:
- Automation using GPS navigation
- Heavy mechanization and automation is currently done manually
- Labor savings and high-quality manufacturing based on the integration of robotics and advanced sensor technology.
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