Crop production is vital to Japan despite limited arable land (13% of the total area) and the highest degree of industrialization in Asia. Steep land (more than 20°) has been terraced for rice and other crops, carrying cultivation in tiny patches far up mountainsides. With the aid of a temperate climate, adequate rainfall, soil fertility built up and maintained over centuries, and such a large farm population that the average farm has an area of only 1.2 ha (3 acres), Japan has been able to develop intensive cultivation. Agriculture exists in every part of Japan, but is especially important on the northern island of Hokkaido, which accounts for 10% of national production. Since World War II (1939–45), modern methods, including commercial fertilizers, insecticides, hybrid seeds, and machinery, have been used so effectively that harvests increased substantially through the 1970s. Japan is the second-largest agricultural product importer in the world (after the US), with total agricultural product imports of $34.6 billion in 2001. At $32.1 billion, Japan had the largest agricultural trade deficit in the world that year.
Almost all soybeans and feedstuffs and most of the nation's wheat are imported. In 1999, Japan produced 11.5 million tons of rice, the chief crop. In that year, rice accounted for about 93% of all cereal production. About 39% of all arable land is devoted to rice cultivation. Overproduction of rice, as a result of overplanting and a shift to other foods by the Japanese people, led the government in 1987 to adopt a policy of decreasing rice planting and increasing the acreage of other farm products. For many years the government restricted imports of cheaper foreign rice, but in 1995 the rice market was opened to imports, as the government implemented the Uruguay Round agreement on agriculture. Other important crops and their annual production in 1999 (in thousands of tons) include potatoes, 3,400; sugar beets, 3,803; mandarin oranges, 1,360; cabbage, 2,400; wheat, 583; barley, 205; soybeans, 187; tobacco, 64; and tea, 91.
As a result of the US-occupation land reform, which began in late 1946, nearly two-thirds of all farmland was purchased by the Japanese government at low prewar prices and resold to cultivators on easy terms. By the 1980s, nearly all farms were owner-operated, as compared with 23% before reform. A more telling trend in recent years has been the sharp growth in part-time farm households. Farmers are aging, and 77% of farm income is derived from other sources, such as industrial jobs. Although agriculture accounts for only 2% of GDP, about 10% of the population lives on farms. Despite increasing urbanization, 59% of all farms still cultivated less thanoneha (2.7 acres) in 1999. As a result, Japanese agriculture intensively utilizes both labor and machinery for production. In 1998, Japan had 2,210,000 tractors and 1,208,000 combines.