Agriculture’s contribution to the economy is small. The agricultural sector currently accounts for about 1% of GDP and 6% of employment [1] (Figure 3.15.1). With a high GDP per capita and one of the most densely populated countries in the OECD, Japan is a major net importer of agricultural products. Rice accounts for 55% of total agricultural land providing 25% of gross farm output value. Horticultural and arable crops account for 68% of farm output value with livestock providing a further 28%. Average farm size is less than 2 hectares, small relative to other OECD countries, and agricultural income accounts for only around 13% of total farm household income [2]. Agriculture makes intensive use of purchased inputs by OECD standards, but the total volume of farm production and farm inputs between 1990-92 to 2002-04 has decreased (Figure 3.15.2). Use of inorganic fertilisers has declined by –18% for nitrogen fertilisers and by –27% for phosphorus fertilisers; pesticide use declined by –27%; on-farm energy use by –5%; water use by –3%, while the volume of farm production also decreased by –11%, mainly due to lower crop production –17%, compared to the reduction in livestock –6% [1].