Farm Business Model on Smart Farming Technology for Sustainable Farmland in Hilly and Mountainous Areas of Japan

Haruhiko Iba and Apichaya Lilavanichakul ()
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Haruhiko Iba: Graduate School of Agriculture, Kyoto University, Kyoto 606-8502, Japan
Apichaya Lilavanichakul: Faculty of Agro-Industry, Kasetsart University, Bangkok 10900, Thailand

Land, 2023, vol. 12, issue 3, 1-18

Abstract: Farmlands in Japan’s hilly and mountainous (HM) areas face the critical challenges of aging farmers, depopulation, and disadvantageous conditions for farm management and economic performance, leading to the abandonment of farmland. Rice farming in HM areas is rarely profitable; however, it occupies 40% of Japanese agricultural production and affects food security. We proposed a farm business model to utilize smart farming technology (SFT) for rice production in the HM areas and analyzed the financial performance of the case study. The farm business model applying SFT has three stakeholders: collective activity by the farmers, farm operations by the enterprise, and a government subsidy. The model conceptualizes diversifying farm business into rice farming and other business units. Three scenarios of SFT in the farm business model consist of combinations of conventional and SFT machines: conventional machines, intermediate SFT, and advanced SFT. The results of the financial analysis on the case study were consistent with the theoretical framework of farm business models. This study revealed that the elasticity of labor productivity on fixed assets of advanced SFT (0.94) was more productive than intermediate SFT (0.63). To utilize SFT to sustain farmland in HM areas, balance between financial security and profitability, and linkage of the enterprise and community are indispensable.

Keywords: smart farming technology; rice; hilly and mountainous areas; sustainable farmland; Japan (search for similar items in EconPapers)
JEL-codes: Q15 Q2 Q24 Q28 Q5 R14 R52 (search for similar items in EconPapers)
Date: 2023
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