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Current Outlook of Japanese Tea

December 2020 [ I n d e x ]

1. Characteristics of tea production in …...... 1 2. Outlook of tea production ………...... 3 3. Outlook of crude tea price ...... 4 4. Outlook of consumption / demand of tea ...... 5 5. Change in consumer market ………...... 6 6. Current situation of tea producing regions (1) …..…...... 7 7. Current situation of tea producing regions (2) ..……...... 8 8. Efforts for improving productivity (Promotion of smart agriculture) ..…………...... 9 9. Outlook of tea import / export ….…...... 10 10. Results of tea export …………...... 11 11. Export of organic tea …..…………………………………………………...... 12 12. Development of new basic policy concerning promotion of tea industry and tea culture ……………...... 14 機密性○情報1. Characteristics of tea production in Japan ○○限り ○ Tea undergoes the following processes before being sold on the market: (i) harvesting fresh leaf, (ii) processing fresh leaf into crude tea in tea-growing regions, and (iii) blending crude tea into final processed tea (refined tea) in tea consumption regions. The industrial scale of crude tea is about JPY100 billion. ○ Major tea-growing regions are: (1) , (2) Kagoshima, (3) Mie, (4) and (5) . The top-three prefectures constitute about 70% of the total tea-growing acreage in Japan. ○ Tea production in each prefecture has different characteristics, for example, Shizuoka, Kagoshima and mainly produce "Sencha," Mie and Fukuoka "Kabusecha," and "Tama-ryokucha," and Kyoto "Gyokuro" and "Matcha."

○ Change of form of tea and industrial scale ○ Main tea-producing prefectures and characteristics of production

Growing Production Prefecture Rank Acreage volume Characteristics of production name Fresh leaf (in ha) (in tons) Mainly produces Sencha (in particular, 1 Shizuoka 15,900 29,500 deep-steamed Sencha)

2 Kagoshima 8,400 28,000 Mainly produces various types of Sencha Steaming/rolling/Drying 3 Mie 2,780 5,910 Japan's largest producer of Kabusecha

JPY97.2 billion Japan's largest producer of Gyokuro and Source: 2018 Statistics of Agricultural Income 4 Kyoto 1,560 2,900 Crude tea Matcha Crude tea (non-trimmed 5 Fukuoka 1,540 1,780 Mainly produces Kabusecha tea leaf, before removing stems) 6 Miyazaki 1,380 3,510 Mainly produces Sencha

Japan's third largest producer of Blending several types of crude tea produced in 7 Kumamoto 1,220 1,270 different regions Tama-ryokucha 8 843 881 Mainly produces Sencha Refined Refined tea (trimmed tea, 9 Saga 749 1,240 Japan's largest producer of Tama-ryokucha tea after removing stems) 10 737 693 Mainly produces Tama-ryokucha (Seicha) 11 Aichi 517 832 Mainly produces Matcha Total 40,600 81,700 Tea for Source:MAFF "Statistics on Farmland and Crop Acreage" Note:Ranking is based on the growing acreage surveyed prefectures in 2019. drinking 1 (Reference) Types of tea

Percentage of crude Types Characteristics and main producing regions tea production/crude tea price (2019) [Characteristics] [Percentage of Production] • Most popular type of tea. 53.6 % Sencha Processed by steaming, kneading and drying new shoots. [Main Production Regions] [Crude Tea Price] • All regions in Japan JPY 1,178 / kg [Characteristics] [Percentage of Production] • Cultivated under a sun-shielding covering made of straw or 0.3 % Gyokuro cheesecloth under “tana” (ceiling shelf) for about 20 days before harvesting. Processed in the same way as Sencha. [Crude Tea Price] [Main Production Regions] JPY 4,928 / kg • Kyoto and Fukuoka [Characteristics] [Percentage of Production] • Cultivated under a sun-shielding covering made of straw or 4.2 % Kabusecha cheesecloth for about one week before harvesting. Processed in the same way as Sencha. [Crude Tea Price] [Main Production Regions] JPY 1,462 / kg • Mie and Fukuoka [Characteristics] • Cultivated under a sun-shielding covering from three weeks to one [Percentage of Production] Tencha month before harvesting (which is longer than that of Gyokuro). 4.4 % (Matcha) Processed by drying tea leaf without kneading. • Matcha is a powdered tea made by grinding Tencha with a stone mill. [Crude Tea Price] [Main Production Regions] JPY 2,498 / kg • Kyoto, Aichi and Kagoshima

[Characteristics] [Percentage of Production] • Unlike Sencha, a trimming process is not applied to Tama-ryokucha so 2.5 % Tama-ryokucha leaf is round. Tama-ryokucha [Main Production Regions] [Crude Tea Price] • Kumamoto, Saga and Nagasaki JPY 1,686 / kg Source:Percentage of crude tea production/crude tea price (for all crop seasons) is based on data from the Japanese Association of Tea Production. Reference:Gyokuro, Kabusecha and Tencha are collectively called "Ooicha." 2 2. Outlook of tea production

○ Growing acreage is declining slowly. The production volume exceeded 100,000 tons in 2004 due to the increase in demand for green tea beverages, but in recent years it has remained around 80,000 tons. ○ Tea production per crop season, the first crop has decreased in recent years, the third crop and Autumn-winter Bancha for reasonable drinks has been on the rise. In addition, the Tencha which is in high demand, has also been on the rise. 〇 Tea farmer's growing acreage are expanding, especially in .

○ Change in tea growing acreage/production volume ○ Change in Tencha (Matcha) production volume

120 Production volume Growing acreage 60 4,000 49 49 49 48 48 47 47 46 46 45 ha) Growing1,000(in acreage 100 45 44 43 50 42 42 41 3,000 3,464 80 40 2,000 60 30 101 100 92 94 96 88 1,000 40 86 85 84 85 84 80 80 82 86 82 20

1,452 Production volume volume (in tons) Production 20 10 0

Production volume (in 1,000 volume (in 1,000 tons) Production 0 0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2004 Source:Data from the Japanese Association of Tea Production Source:MAFF "Statistics on Agricultural Production" ○ Change in tea production volume per crop season ○ Change in growing acreage per commercial tea farm (t) in major tea-producing prefectures (ha) 2015 2016 2017 2018 2019 Shizuoka Kagoshima Mie Kyoto Fukuoka Miyazaki Kumamoto First crop 32,530 31,515 30,192 32,900 29,786 of tea 2000 0.7 1.5 0.5 0.9 0.5 1.2 0.6 Second crop 20,544 20,285 20,963 22,577 20,869 2005 of tea 0.8 2.1 0.9 1.1 0.8 1.7 0.8 Third crop 2010 5,801 6,312 7,053 6,384 5,862 1.0 3.0 1.3 1.3 0.9 2.2 1.1 of tea 2015 1.2 3.3 1.5 1.5 1.1 2.1 1.1 Autumn- 18,534 20,458 22,022 22,906 22,851 winter Bancha Source:Census of Agriculture and Forestry; the growing acreage of commercial tea farm Source: Data from the Japanese Association of Tea Production in 2010 is an estimate. 3 3. Outlook of crude tea price

○ Tea price was on an upward trend until 2004 due to increased demand in PET-bottle green tea beverages; however, after 2004, slowdown in demand is pushing the crude tea price downward. ○ Tea price significantly differs depending on (i) price differences between types of tea and (ii) price differences between crop seasons, in addition to tea quality, significant affecting tea farmers.

○ Change in tea price (crude tea and regular Sencha) ○ Change in tea price per crop season (Crude tea produced in 2019) First crop of tea Second crop of tea Unit:JPY/kg JPY/kg Third crop of tea Average for all crop season 3,500 Other Ooicha Sencha type of Bancha 3,000 green Tama- Gyokuro Kabusecha Tencha Sencha tea 2,500 ryokucha First crop 2,000 of tea 4,928 1,782 3,048 1,872 2,230 693 1,077 1,500 Second - crop of tea 747 1,558 624 664 356 461 1,000 Third crop - - - 500 of tea 362 381 316 165

0 Autumn- winter - - - 2003 2005 2007 2009 2011 2013 2015 2017 2019 328 221 327 342 Bancha Average Source:Data from the Japanese Association of Tea Production for all crop 4,928 1,462 2,498 1,178 1,686 372 574 season Source:Data from the Japanese Association of Tea Production

(Reference) Change in price of import Chinese green tea Unit:JPY/kg 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 245 252 261 285 382 476 582 520 577 588 612 Source:Ministry of Finance, Trade Statistics (CIF price) 4 4. Outlook of consumption/demand of tea 〇 Concerning the consumption of green tea (leaf tea) has been on a declining trend and consumption of green tea beverages has been on an increasing. ○ Annual spending per household for green tea (leaf tea) and tea beverage product is decreasing for leaf tea, but the total amount is increasing because tea beverage product are increasing. Consumer has been to shift to convenient style of tea consumption, especially in the younger generation.

○ Change in consumption volume of leaf tea per household ○ Amount of annual expenditure for green tea (g) leaf/tea beverage product per household 1,200 (JPY) Green tea (leaf tea) Tea beverage product 11,625 12,000 1,000 1,146 10,765 11,092 10,000 800 791 8,000 4,627 5,802 From 2007, amount of expenditure 600 7,845 for tea beverage product exceeds 6,000 400 that of green tea leaf. 4,000 200 6,138 5,290 2,000 3,780 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Source:Ministry of Internal Affairs and Communications, Household Statistics Source:Ministry of Internal Affairs and Communications, Household Statistics ○ Change in consumption volume of soft drinks ○ Consumption trends for green tea and tea 35.0 beverage product by age Soda 31.4 30.0 Green Tea Tea beverage product 28.8 10,000

26.3 (JPY) 25.0 Coffee Beverage 23.5 8,000 20.0 Green Tea Beverage 6,000 15.0 (liter/person) Mineral Water 4,000 10.0 Black Tea Beverage 9.5

2,000 Consumption volume per person person per volume Consumption 5.0 4.2 Oolong Tea Beverage 0

0.0 Annual expenditure per household per expenditure Annual

Age Source:Japan Soft Drink Association Source:Ministry of Internal Affairs and Communications, Household Statistics 5 5. Change in consumer market

 General retailers including specialty tea stores were the largest source from which consumers bought green tea in 1999, and subsequently purchase from supermarkets and others grew.  The number of establishments of tea retailers almost halved during the period between 2002 and 2014.

○ Change in the sources of green tea purchase Purchase by mail order has increased. General retailers 一般小売店 8% Supermarkets 6% 1% スーパー 9% Convenience stores 14% 26% 4% 38% コンビニエンススト 4% Department stores 百貨店ア 10% 1999 Co-ops 4% 2014 生協・購買 Discount stores 10% Purchase from ディスカウントスト supermarkets 1% Mail order 35% 通信販売ア has increased. 29% Others 1%

Source:"National Survey of Family Income and Expenditure", Ministry of Internal Affairs and Communications

○ Changes in the numbers of establishments of tea retailers/wholesalers Tea retailers 11,809 12,000

10,000 9,769 46% decline from 2002 8,000 6,381 6,000 Tea wholesalers

Number Number of 4,000

2,786 2,322 establishments 2,000 1,607 0 2002H14 2007H19 2014H26

Source:"Commercial Statistics", Ministry of Economy, Trade and Industry 6 6. Current situation of tea producing regions (1)  The number of core persons mainly engaged in farming declines year after year. Farmers are increasingly aging as the percentage of those aged 65 or older increased from 49% in 2000 to 56% in 2015.  In hilly land where the use of agricultural machinery is difficult, working hours are uneven, depending on the season, and the workload is strenuous particularly in the picking season. Some regions try to spread the picking season out by introducing early-cultivar and late-cultivar varieties.

○ Number of core persons mainly engaged in farming ○ Seasonally uneven working hours

by age group (industrial crops) winter

20,000 (Hours/10a) -

of tea of Bancha

20 of tea Firstcrop

Field size: 3ha Second crop 15,000 15 Autumn Working hrs. : 77 hrs. / 10a 15 10 13 8 10,000 land Hilly 5 6 7

(Persons) 5 5 4 4 4 3 3 0 5,000 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 1 月 2 月 3 月 4 月 5 月 6 月 7 月 8 月 9 月 10月 11月 12月

20

0 winter

-

of of tea

of of tea of tea of

15 Field size: 8ha Firstcrop

Third Third crop Bancha

10 Working hrs. : 41 hrs. / 10a Second crop Autumn 5 7 5 Flatlands 3 2 7 4 3 2 4 平成200012年 平成200517年 平成201022年 平成201527年 0 1 2 1 Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 1 月 2 月 3 月 4 月 5 月 6 月 7 月 8 月 9 月 10月 11月 12月 ○ Proportion of tea varieties produced by major production region ○ Change in number of commercial farm households (%) All producing tea in major tea producing prefectures Shizuoka Kagoshima Kyoto Aichi (Households) prefectures Yutakamidori All (Early-cultivar ) 0.04 27.1 0 0.6 6.3 Shizuoka Kagoshima Mie Kyoto Fukuoka MiyazakiKumamoto prefectures Saemidori (Early-cultivar ) 0.5 12.9 0.9 1.4 4.0 24,019 4,309 4,598 1,330 2,217 820 1,277 53,687 Sayamakaori 2000 (Somewhat early- 1.9 0 0.8 1.9 2.1 cultivar ) Yabukita 2005 17,731 3,072 2,294 1,035 1,629 642 973 37,617 (Medium-cultivar) 91.1 32.8 62.0 59.8 71.5 Samidori (Medium-cultivar ) 0.03 0 8.2 18.5 0.7 2010 13,933 2,216 1,455 825 1,385 513 695 28,116 Okumidori (Late-cultivar ) 0.6 4.8 11.8 11.0 3.3 Others 5.8 22.5 16.3 6.8 12.1 2015 9,617 1,744 967 653 980 399 529 20,144 Total 100 100 100 100 100 Source:“Census of Agriculture and Forestry”, MAFF Source:MAFF survey (FY2019) 7 7. Current situation of tea producing regions (2)  Around 40% of tea fields in Japan are located in hilly and mountainous areas, and some regions have not yet to introduced riding-type machines due to slopes and other obstacles.  About 40% of trees of tea fields are aged 30 years or older, raising concern about a decline in yield and quality. Replanting and other methods are supported but have been done in only some 8% of the total field size.

○ Situation of tea-growing acreage by farming region ○ Farm acreage categorized by tree age (FY2019) (ha) 2015(ha) Remarks 8,000 37% Flat lands 15,532 All Hilly & mountainous areas 10,276 6,000 prefectures 23% 22% Hilly & mountainous areas (%) 39.8 4,000 Flat lands 8,570 Half of hilly & mountainous areas 13% have a gradient of 15 degrees or 2,000 6% Shizuoka Hilly & mountainous areas 3,205 higher*, making it difficult to introduce riding-type machines. *As Hilly & mountainous areas (%) 27.2 of 1994 0 Young tea -10 years 11-20 21-30 30 years or Flat lands 3,450 The gradient is small even in hilly & 未成園field ~10年 11years~20年 21年~years30年 30年以上older mountainous areas and the land has Source:MAFF survey Kagoshima Hilly & mountainous areas 1,860 been improved, so most of the regions are suitable for riding-type Hilly & mountainous areas (%) 35.0 machines. ○ Total size of fields for which the tea replanting Flat lands 177 80% of land has a gradient of 10 (ha) support project was implemented Kyoto Hilly & mountainous areas 768 degrees or lower, and 6% of land has 3,500 a gradient of 15 degrees of higher. Hilly & mountainous areas (%) 81.3 3,000 Flat lands 216 80% of land has a gradient of 5 2,500 Aichi Hilly & mountainous areas 66 degrees or lower, and 0% of land has 2,000 a gradient of 15 degrees of higher. Hilly & mountainous areas (%) 23.4 1,500 Source:MAFF survey 1,000 500 ○ Use of riding-type tea picking machines (FY2019) 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 H23 H24 H25 H26 H27 H28 H29 H30 R1 No. of units Machine-using hectares Percentage Source:MAFF survey Shizuoka pref. 3,547 10,461 65.8 Tea replanting has the following benefits: • Planting young tea trees is expected to improve quality and productivity. Kagoshima pref. 1,413 8,192 97.5 • Planting good cultivars makes it possible to enhance added value. Kyoto pref. 110 288 18.4 • Combining cultivars prevents concentration of harvesting and processing Aichi pref. 79 239 46.3 work by dispersing the cropping period. Total 7,026 24,508 60.4 Source:MAFF survey 8 8. Efforts for improving productivity (Promotion of smart agriculture) ○ Since FY2019, the smart agriculture demonstration project has been launched, which aims to accelerate social implementation of “smart agriculture” by introducing and testing advanced technologies including robots, AI, and IoT in production sites. ○ The project for tea is underway in Shizuoka, Kagoshima and Kyoto prefectures.

Shizuoka Pref. Smart Tea Production Demonstration Consortium (Shizuoka pref.) (FY2019)

[Testing the tea production management integrated system which is centered on labor-saving management of dispersed tea fields and quality control of tea factories through the creation of tea field networks using LoRa] Test field size:127ha (Chamu Chamu Land Sugeyamaen, Eco Green Katsumata, Harada Tea Processing Co., Ltd.)  Dispersed tea fields necessitate work hour increases and make it difficult to manage fresh leaves in the same manner.  For this reason, the project aims to stabilize farm management by streamlining operations through the introduction of work recording tools Drone and other methods and enabling tea plucking at Field server the right time for better quality through the use Work recording tool Remote sensing AI technology to analyze tea growing stages of AI technology to analyze tea growing stages.

Horiguchi Seicha Smart Demonstration Consortium (Kagoshima pref.) (FY2019) [Testing the large-scale smart tea business integrated system using IoT / robotization technologies] Test field size:116ha (Kagoshima Horiguchi Seicha)  In the producing region facing serious issues of aging and labor shortage, scale expansion is necessary for maintaining the tea industry.  Accordingly, the project aims to realize a new form of tea business in large-scale tea fields through robotization of tea-field management, multipurpose utilization of field irrigation facilities, and visualization of business management. Multipurpose sprinkler Robotized tea-field Centralization and managing machine visualization of information Source:Pamphlet of the smart agriculture demonstration project 9 9. Outlook of tea import/export

○ Surged in 2004 due to green tea beverage materials demand, tea import turned to decline as percentage of domestic tea increased. Recently, the import volume has been about 4,000 tons. ○ Thanks to growing enthusiasm for Japanese food and health awareness in foreign countries including the U.S., export volume saw a three-fold increase in ten years. The U.S. accounts for about 30% of Japanese tea exports.

○ Change in import/export of green tea ○ Major countries importing tea from Japan (top five countries/regions, 2019) 20,000 (Volume of export from Japan by country)

15,000 Export volume (t) Import volume (t) 26% 29% U.S. 10,000 Taiwan 5,102 Germany 3,516 4,108 5,108 5,000 2,232 2,351 4,127 4,642 5% Singapore 1,576 1,701 872 2,387 2,942 Thai 762 1,096 1,625 1,958 599 760 27% Other Coutries 0 6% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 7% 5,000 3,473 4,875 3,970 4,390 5,865 5,393 4,180 3,618 4,730 5,906 5,473 ○ Major countries exporting tea to Japan 7,326 10,000 10,242 9,591 (top five countries/regions, 2019) 11,790 11,254 (Volume of import to Japan by country) 15,000 15,187 6% 6% 17,739 16,995 20,000 China Vietnam Austraia Taiwan Source:Ministry of Finance, Trade Statistics 84% Myanmar Othre Countries

Source:Ministry of Finance, Trade Statistics 10 10. Results of tea export

 In 2019, green tea export value was 14.6 billion yen, a 5% drop from 2018.  Export value has been on the rise for the past five years both for the U.S. and EU.

○ Green tea export (World) ○ Green tea export (to the U.S.) (Tons) (100 million JPY) (Tons) (100 million JPY) 6,000 180 2,000 80 1,698 68 65 輸出量(トン)Export volume (tons) 153 1,550 59 160 1,420 146 1,500 60 5,000 144 輸出額(億円)Export value (100 million JPY) 140 48 1,595 1,485 44 1,000 1,407 40 116 34 4,000 120 500 20 101 5,108 100 0 0 3,000 78 5,102 2014H26 H272015 2016H28 2017H29 H302018 2019R1 80 輸出量Export volume 輸出額Export value 66 4,642 4,127 2,000 51 60 47 ○ Green tea export (to EU) 42 4,108 (Tons) (100 million JPY) 31 32 33 34 3,516 40 800 30 662 596 648 1,000 21 2,942 589 25 25 2,232 534 1,701 600 23 1,576 2,351 20 23 420 23 20 1,958 20 1,096 1,625 2,387 0 0 400 15 15 2005 2007 2009 2011 2013 2015 2017 2019 10 200 ○ Change in export price of green tea 5 Unit:JPY/kg 0 0 2014H26 2015H27 2016H28 H292017 H302018 2019R1 2015 2016 2017 2018 2019 ドイツGermany フランスFrance オランダNetherlands 英国 その他 輸出額 計 2,449 2,812 3,093 3,005 2,867 UK Others Export(EU value) (EU total) Source:“Trade Statistics”, Ministry of Finance 11 11. Export of organic tea  As organic tea is not only in high demand overseas but is also able to meet Maximum Residue Limits, it is recognized as being suitable for export.  The amount of tea certified as organic by JAS is increasing.  Export volume of organic tea utilizing an organic equivalency recognition of organic certification systems is increasing. Such export accounts for a large part of total tea export especially for EU.

○ Change in the amount of tea certified ○ Change in the export volume of organic tea (t) (t) as organic JAS (JAPAN) utilizing an organic equivalency recognition 1,000 3,500 of organic certification systems 3,111 900 4 800 3,000 5 700 2,500 600 1 545 419 2,000 500 4 6 400 444 1,500 257 42 40 300 360 1,000 200 223 24 302 141 288 100 83 89 146 165 500 27 73 82 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 H22 H23 H24 H25 H26 H27 H28 H29 H30 R1 H13 H14 H15 H16 H17 H18 H19 H20 H21 H22 H23 H24 H25 H26 H27 H28 H29 H30 米国US カナダCanada EUEU スイスSwitzerland 緑茶(仕上げ茶)Green tea (refined tea) ○ Percentage of JAS organic tea fields by prefecture ○ Percentage of organic JAS tea (FY2019) in tea export(FY2019)

Export Organically % 15% volume (t) 鹿児島県Kagoshima pref. grown* (t) (B) (B/A) (A) 2% 静岡県Shizuoka pref. 5% 41% 宮崎県Miyazaki pref. US 1,485 302 20.3 8% 長崎県Nagasaki pref. EU 648 545 84.1 三重県Mie pref. 11% 愛知県Aichi pref. * Export utilizing an organic equivalency recognition of organic 18% certification systems その他Others Source:MAFF survey 12 World trends in tea

 In recent years, both production and export of green tea have been on the rise.  The amount of global green tea trade is projected to increase 60% over the next 10 years.

○ Change in production and ○ Outlook of the amount of export of green tea in the world global green tea trade (FAO forecast) Production volume Export volume (Thousand tons) (Thousand tons) (10 thousand 2000 450 tons) 400.0 365.4 1800 400 350.0 1600 350 Grow 2.1-fold 1400 300.0 300 1200 250.0 250 1000 200.0 177.3 200 800 150.0 150 600 100 100.0 Grow 1.6-fold 400 60.5 50.0 37.2 200 50

0 0 0.0 2012 2013 2014 2015 2016 2017 2018 H24 H25 H26 H27 H28 H29 H30 2017 2027 中国China ベトナムVietnam 日本Japan 生産量 貿易量 インドネシアIndonesia その他Others 輸出量Export volume Production volume International trade volume

: Source “Annual Bulletin of Statistics”, International Tea Committee Source:Material from FAO-IGG on Tea 13 12. Development of new basic policy concerning promotion of tea industry and tea culture  Based on the change in the situation facing the tea industry in recent years, the “basic policy concerning promotion of tea industry and tea culture” was newly developed in April, 2020. Significance of the promotion of Future basic direction concerning the promotion of tea industry and tea culture tea industry and tea culture Promoting efforts of production, processing, and distribution of tea based on the characteristics and  Contributing to realizing rich and actual situation of each producing region not by simply repeating conventional approaches but by thinking outside the box while accurately grasping the needs of diversified consumers at home and abroad. healthy lifestyles of Japanese people  Important core crop in hilly & Long-term perspective on domestic demand and production volume target mountainous area Long-term perspective on domestic demand for tea: 86,000 tons (2018) → 79,000 tons (2030)  The tea industry is important also in Tea production volume target: 86,000 tons (2018) → 99,000 tons (2030) terms of local economy and (Including 5,000 tons for export) (Including 25,000 tons for export) employment as it involves many supporting industries. Measures for the promotion of the tea industry Issues facing tea  Promoting the improvement of quality/added value to respond to the consumer needs and advancing the processing and distribution  For convenience, consumers have ・Responding to the diversifying consumer needs changed to favor green tea ・Promoting the cooperative efforts between producers and distributors/users, beverage products over leaf tea.  Expanding export As the tea industry was slow to ・Promoting the overseas market development respond to this change, it has ・Developing production/distribution systems for substantial expansion of export suffered stagnating tea ・Meeting the import conditions set by export-destination countries and regions consumption and sluggish prices.  Stabilizing the management of producers  On the other hand, if we turn our ・Promoting the production of tea according to the producing region’s attention to outside of Japan, the characteristics sustainability the improving and amount of green tea traded ・Promoting the replanting/planting of tea trees internationally in the world is ・Promoting the research and development and demonstration/introduction of expected to rise going forward. smart agriculture technologies, It is important to gain such  Promoting consumption overseas demand. ・Spreading tea’s appeal to various consumer segments,  In terms of production, there are  Centralizing and utilizing information concerning tea concerns that tea production may not be sustainable in the future Measures for the promotion of tea culture regions producing tea of force sales strengthening profitability, Increasing due to aging workers and labor shortage in the harvest season.  Promoting the understanding tea culture  Preserving/utilizing tea-related cultural assets 14 Act on Promotion of Tea Industry and Tea culture ○ "Act on Promotion of Tea Industry and Tea culture" came into effect on April, 2011.

1. Purpose of Act The purpose of this Act is to provide for the development of basic policies by the Minister of Agriculture, Forestry and Fisheries, and to take various measures such as securing stable business management of tea producers, expanding consumption, promoting food education using tea to contribute to such consumption, promoting export and disseminating knowledge on tea tradition, so as to contribute to the achievement of sound development of tea industry and healthy and affluent lives of nationals. 2. Summary of Act (1) Development of basic policy (Article 2) The Minister of Agriculture, Forestry and Fisheries shall provide for a basic policy on the following matters: (i) significance and basic policy for tea industry and promotion of tea culture; (ii) setting a target for production quantities according to long-term perspective on tea demands; (iii) measures for the promoting tea industry; (iv) measures for the promotion of tea culture; and (v) any other matters necessary for the promotion of tea industry and tea culture. (2) Development of promotion plans (Article 3) Prefectures shall make an effort to develop the promotion plan in accordance with the basic policy. (3) Assistance measures by the national and local governments (Articles 4 through 10) The national and local governments shall make an effort to implement the assistance measures in relation to the following matters: (i) securing stable business management of tea producers (e.g. improving environment of tea fields, assistance in replanting of tea trees and promotion of disaster prevention); (ii) improvement of processing and distribution (assistance for projects for creating new added value through integral collaboration of agriculture, manufacturing, retail and other sectors) (iii) promotion of quality improvement; (iv) promotion of consumption; (v) promotion of export; (vi) promotion of tea culture; and (vii) commendation of contributors to tea industry and tea culture. (4) Assistance of national government (Article 11) The national government must make an effort to implement necessary measures such as providing information, advice and financing to local governments. 15