Abstract
This paper aims to identify the factors determining the adoption of the environmental direct-payment program in Japanese agriculture. The paper takes panel data from Japan's 47 prefectures between 2011 and 2014, the period during which these prefectures adopted the current program of environmental conservation through agricultural subsidies, and conducts a quantitative analysis of how economic and social factors affected the adoption of this system. To account for any unobserved heterogeneity among the prefectures, the analysis applies pooled OLS, a fixed-effects model, and a first difference model in its calculations. The findings reveal that the degree to which the agri-environmental direct-payment program was adopted depends on various factors that differ by prefecture, including subsidy amount per unit of land area, farming conditions, land prices, and the extent of population aging.
