The Food Value Chain and Kubota’s Perspective

What is the Food Value Chain?

The “Food Value Chain” refers to the interconnected stages spanning from the production and sale of agricultural materials to crop cultivation, processing, distribution, retail, and consumption.

The food we eat daily is not just the product of farmers who grow crops; Many people contribute to the process, including those who supply agricultural materials and energy, those who process crops, those involved in food distribution and retail, and those who prepare and serve meals, all the way until we see it on our dinner table. This entire chain from production to consumption is known as the Food Value Chain.

Why is the Food Value Chain Gaining Attention?

Recently, the term “Food Value Chain” has been appearing more frequently in various media. What is driving this increased attention?

Global Food and Agriculture Challenges

Currently, the world’s food and agriculture sectors face a range of challenges.

1. Growing food demand due to global population increase

With the world’s population continuing to grow, food demand is expected to rise further. Accordingly, it is crucial to create a society that ensures everyone has access to, nutritious, sufficient, and safe food, and to construct a system that maintains such access.

2. Sustainability in food consumption

Sustainability is needed not only in food production but also in food consumption. Expanding sustainable consumption through methods such as reducing food loss and promoting local consumption of locally produced food, encouraging balanced and nutritious diets, and enhancing food education to drive awareness and behavioral change are all necessary.

3. Aging agricultural workforce and labor shortages

The global agricultural workforce, estimated at around 1 billion people in 2000, declined by approximately 100 million by 2019^*1. In Japan, the average age of farmers is about 68 years old^*2. The number of commercial farming households also fell from 2.3 million in 2000 to 1.02 million in 2020^*3.

*1Food and Agriculture Organization of the United Nations (FAO) “STATISTICAL POCKET BOOK”
*2Ministry of Agriculture, Forestry and Fisheries of Japan “Statistics on Agricultural Labor Force”
*3Ministry of Agriculture, Forestry and Fisheries of Japan “Statistics on Agricultural Management Entities”

4. Reducing agriculture’s environmental impact

Agriculture accounts for about 24% of global greenhouse gas (GHG) emissions^*4. The environmental impact of agriculture is significant, necessitating measures such as reducing chemical fertilizer and pesticide use, decarbonizing farm machinery, and promoting organic farming.

*4National Agriculture and Food Research Organization “Development and dissemination of technologies to mitigate greenhouse gas emissions with enhanced agricultural productivity”

5. Food supply chain vulnerabilities exposed by COVID-19 and international conflicts

The COVID-19 pandemic and unstable international conditions due to conflicts, etc., have disrupted food supply chains, preventing even produced food from reaching those who need it. Strengthening global food supply chains has become increasingly critical.

As described above, the issues facing food and agriculture are diverse. To solve them, it is essential to take a comprehensive view of the entire Food Value Chain.

Why is it Necessary to Take a Comprehensive View of the Entire Food Value Chain?

Simply increasing agricultural production does not guarantee that food will reach those who need it in the necessary quantities. Enhancing only certain stages of the Food Value Chain will not be enough to solve the challenges facing food and agriculture.

To address these challenges, it is crucial to view not only the individual stage in the Food Value Chain but also the entire process–from production to consumption–as a single, interconnected flow, optimizing every stage while maintaining overall balance. Additionally, since the Food Value Chain now extends globally, solutions must be considered not just within individual countries or regions, but on a worldwide scale.

Benefits of Optimizing the Entire Food Value Chain

By optimizing the Food Value Chain as a whole, benefits can be realized for people in various roles, as well as for society and the global environment.

**Benefits of optimizing the entire Food Value Chain**
Consumers	Food quality is preserved throughout the production-to-consumption process, ensuring access to safe and reliable food. A stable supply of diverse food options allows for a richer and more varied diet.
Distributors	Logistics become more efficient, eliminating unnecessary waste and inefficiencies. Proper distribution costs and reduced environmental impact can be achieved.
Producers	Producers can better understand consumer demand, leading to expanded employment opportunities and reduced food loss at production sites. Understanding consumer needs enables producers to take charge of processing and sales, promoting the development of integrated “sixth-order” industries. “Profitable agriculture” becomes possible by producing crops based on needs.
Society	Nutritious food becomes physically and economically accessible to all people at all times, at national, regional, and community levels.
Global Environment	Producing only what is needed, in the necessary amounts based on consumer needs, helps reduce food loss. CO₂ and GHG emissions across the value chain are minimized, along with reduced use of chemical fertilizers and pesticides at production sites, lessening the environmental impact of food supply.

Kubota’s Approach to Supporting the Entire Food Value Chain

Building a sustainable food system is an important theme for Kubota, who is engaged in the business fields of food, water, and the environment, and whose mission is to contribute to solving social issues. In its long-term vision, “GMB2030,” announced in 2021, Kubota set the goal of becoming an "Essentials Innovator for Supporting Life" committed to a prosperous society and cycle of nature. Kubota is actively promoting the provision of solutions that support the entire Food Value Chain.

For example, in the “production” area of agriculture, which is one of Kubota’s existing business sectors, the company is promoting smart agriculture by leveraging advanced technologies such as robotics, ICT, and AI, contributing to the drastic reduction of labor and improvement of productivity in agriculture. Furthermore, Kubota is expanding its solution offerings from “production” to both upstream and downstream, building a data integration platform across the entire Food Value Chain, and contributing to the realization of a sustainable Food Value Chain and the reduction of food loss.

These initiatives are driven by Kubota, which has long led the development of automated agricultual machines and precision farming systems, applying its technologies, solutions, achievements, and experience gained over many years of addressing agricultural challenges. At the same time, Kubota believes that open innovation is essential to accelerate efforts in solving global challenges. The company is strengthening collaborations with external partners such as startups, universities, and research institutions, working with stakeholders to co-create value and develop solutions that contribute to solving global food and agricultural issues.

The Food Value Chain and Kubota's Perspective