Sumitomo Mitsui Banking Corp. will this fall launch a company to farm rice, officials said Wednesday. It will be Japan's first major bank to enter the agricultural sector.
The banking unit of Sumitomo Mitsui Financial Group Inc. aims to improve agricultural productivity and expand market channels by utilizing its funds and customer base, the officials said.
The bank will first establish a company that can own agricultural farm land in Akita Prefecture together with local firms.
If the business is successful, the bank plans to set up similar companies in other rice areas, such as Niigata and Yamagata prefectures.
The agricultural workforce has been shrinking due to depopulation of rural areas and aging farmers. But some experts believe the purchasing or leasing of farm land by companies is one way to use land that otherwise wold lie fallow.
Sumitomo Mitsui and regional lender Akita Bank will each invest 5 percent in the new company, while a local firm engaged in rice processing and sales will own over 50 percent.