1. Vegetable Production and Seed Industry in Japan ASC 2013 Kobe Country Report II Nov. 19, 2013 Kazuo Hatsuda Senior Managing Director Japan Seed Trade Association

2. 2 Summary of the presentation 1. Vegetable Production in Japan Main production area and climatic conditions Trend of Vegetable production by species Vegetable consumption 2. Vegetable Seed & Seedling Market in Japan Vegetable Seed market value by species Vegetable Seedling market by species 3. Vegetable Growers Number of farmers and their age Agricultural Corporation and scale expansion 4. Present status of the vegetable seed companies and their future Number of seed companies by category Seed distribution system in Japan Activity of international seed companies in Japan Movement of Home (Garden) center 5. Trend of vegetable market and breeding target Diversity of Breeding target 6. Seed import and export

3. 3 Main Production Areas & Climatic Conditions Annual Average Temperature Type of Climate less Above Sea of Japan Zone Pacific Coast Zone Inland Sea Zone Hokkaido Zone Highland Zone Ryukyu Zone Climatic Zones

4. 4 Trend of Vegetable Production Areas （ e-Stat: Portal site of Official statistics of Japan ） （ ha) Year 2011 Total Production Area: 490,400 ha Total Value of Production: 2,062 Billion JPY (21 Billion US$)

5. 5 Trend of Root Vegetable Production Areas （ e-Stat ） （ ha)

6. 6 Trend of Leafy Vegetable Production Areas （ e-Stat ） （ ha)

7. 7 Trend of Fruit Vegetable Production Areas （ E-Stat) （ ha)

8. 8 Trend of Cucurbit Vegetable Production Areas （ e-Stat ） （ ha)

9. 9 Trend of Japanese Vegetable Consumption (MAFF Japan) Kg/Person/Year

10. 10 Vegetable Consumptions by Country FAOSTAT (Food balance sheets 2003) Grams/Person/Day

11. 11 Vegetable Seed Market in Japan Professional Market (14 main crops+26 sub-main crops) 68,846 million JPY ≒ 690 million US$ (Wholesale Level) Home garden and Semi-professional market 7,500 million JPY ≒ 75 million US$ Estimated Total Value at wholesale level 76,346 million JPY ≒ 763 million US$

12. 12 Seed Value of Top 20 Crops Species Production Area (ha) Production Tonnage (1,000t) Production Value (million JPY) Seed Value (Million JPY) Potato81,0001,961116,000 7,771.2 jpn. Yam (Satoimo)7,51013537,000 6,315.6 Bunching Onion23,100384133,600 4,643.3 Daikon Radish34,9001,180102,100 4,029.0 Tomato12,000626205,100 3,782.0 Onion24,60094279,000 3,477.6 Cucumber11,700493167,400 3,208.1 Carrot19,20054761,700 3,118.8 Sweet Corn25,00019333,700 2,778.3 Cabbage33,7001,20995,100 2,750.0 Spinach21,80021794,800 2,337.7 Lotus4,0204821,500 2,315.5 Ginger1,9504219,900 2,246.4 Melon8,18016366,500 2,214.8 Squash17,90016327,500 2,049.7 Watermelon11,40030959,300 1,772.0 Green Soy Bean12,8004735,600 1,610.2 Lettuce20,80050981,100 1,537.5 Strawberry6,020162155,300 1,365.3 Chinese Cabbage18,10070849,100 1,363.4

13. 13 Vegetable Seedling Market in Japan Number of Plant (X 1,000) Value (X Million JPY) Professional Fruit Vegetable Crops 294,27032,178 Professional Leafy Vegetable Crops 160,6101,285 Home garden Vegetable 150,0009,750 Total604,88043,213 (No official statistics, only educated estimation)

14. 14 Seedling Market Value on Main Crops Number of Plant (X 1,000) Value (X Million JPY) Tomato122,16011,361 Cucumber76,4009,703 Eggplant65,4307,328 Watermelon19,7502,765 Melon10,5301,021 Cabbage56,000448 Lettuce52,000416 Broccoli30,300242 Chinese Cabbage19,900159 Cauliflower2,41019

15. 15 Trend of Farming Population （ X1,000 ） （ Age ） （ 2010 WORLD CENSUS OF AGRICULTURE AND FORESTRY IN JAPAN ）

16. 16 Increase and Decrease of Number of Farmers by Production Area per Farming Household (ha) (%) （ 2010 WORLD CENSUS OF AGRICULTURE AND FORESTRY IN JAPAN ）

17. 17 Number of Agricultural Corporation （ X1,000 ） （ 2010 WORLD CENSUS OF AGRICULTURE AND FORESTRY IN JAPAN ）

18. 18 Trend of JASTA Members

19. 19 Type of Seed Company in Japan VegetableFlowerForageAgricultural Material Seed Seedlin g Seed Seedlin g Bulb & Tuber Seed Chemic al Fertilize r Film & Others Type I-a (Breeder) ○○○○○○○○○ Type I-b (Breeder) ○○ Type I-c (Breeder) ○○○ Type II-a (Wholesaler) ○○○○○○○○○ Type II-b (Wholesaler) ○○ ○○○ Type III-a (Retailer) ○○○○○○○○○ Type III-b (Retailer) ○○○○○

20. 20 Seed Distribution Channel in Japan Main RouteMinor RouteRare Route

21. 21 Entry of Multinational Seed Companies and Home Centers Screening and co-breeding with domestic company. Sweet corn, Spinach, Tomato etc. Strategy of Home center Amateur (Hobby) market to professional market Possibility of M&A Financial difficulty on small breeding companies

22. 22 Trend of Number of Home Centers

23. 23 Sales Amount of Garden Materials and Plants at HC. （ X100 million Yen ）

24. 24 Change of Japanese Vegetable Market & Breeding Target Shrinking of domestic seed market Severe competition on varieties and service. Necessity of many different varieties and small quantity sales (Poor cost performance) Aging growers Labor saving, Light weight, Downsizing, Simplification (anytime, anywhere) Larger production areas and increase of corporate growers Labor saving varieties and equipment. Mechanical harvest Increase of process vegetables (Value added variety) Add functionality, High yield, Add processing characteristics Increase direct shops and Net sales Uniqueness, Diversity, Functionality, Good taste Enlargement and alliance of Super market Establishment of value chain (Alliance with supermarket) Global warming Heat resistant, Insect resistant varieties

25. 25 Seed Export and Import Quantity (ton)Value (US$1000) 200820092010200820092010 Export Total 1,5821,3111,40681,42486,99498,145 China44935140114,99713,86921,950 Korea19118417916,20518,94616,848 Taiwan8497762,9273,1612,853 Hong Kong10268726,0557,4339,501 USA6069 4,1466,7256,336 Import Total 6,6265,8046,29586,36084,98094,328 USA2,1251,8022,02118,17618,34019,882 Denmark6335351,0403,9263,3756,884 Italy93195280613,47315,65013,217 China8575755958,0186,7987,690 （ e-Stat ）

26. Thank you for your attention