The Ministry of Agriculture, Forestry, and Fisheries (MAFF) will start supporting construction equipment manufacturers’ entry into the agricultural market. The first phase of support involves subsidizing a joint research project by construction equipment maker Komatsu and large-scale farmers to reduce 40% of rice production costs. The government aims to encourage competition among cross-industrial equipment makers to lower the agricultural equipment prices that are relatively high compared to international standards. The official announcement is set to be made on March 27.
The joint research project by Komatsu, Ishikawa and Fukui Prefectures, local large-scale farmers, and Kyoto University will be the first recipient of the subsidies. Komatsu, known for its construction equipment’s ability to improve production efficiency, will apply its information and communication technology to the farming industry. More specifically, it will develop agricultural equipment that can be hitched to the back of a Komatsu bulldozer to plow fields and level land.
It is estimated to cost about 2.5 million yen per year to use a standard tractor to produce rice on a 30-hectare field. However, if the tractor is replaced by a durable bulldozer, its service life can be extended two-fold. This way, annual costs could be slashed to a third, or about 800,000 yen, as bulldozers can be used as construction equipment during winter or the off-season.
In addition, crop yields will be increased by combining efficient farming methods like seeding rice paddies directly and rice production costs will be cut by 40% from the current 16,000 yen per 60 kg to 9,400–10,400.
MAFF has budgeted 11.7 billion yen in the FY2016 supplementary budget to support technological development in farming. The ministry will spend 180 million on initial subsidies.
Eighty percent of the domestic agricultural equipment market is dominated by four major manufacturers: Kubota, Yammar, Iseki, and Mitsubishi Mahindra Agricultural Machinery. Some believe this is the reason agricultural equipment prices remain high. MAFF hopes to encourage more competition among farming equipment makers to reduce prices by supporting construction equipment companies like Komatsu.