The report, Japanese Agriculture: Forces Driving Change, analyses the various factors shaping demand, domestic production and imports for a range of agricultural products, providing indicators of future directions in Japanese agriculture.

"With rapid economic growth and population increases in the four decades until the early 1990s, Japanese diets diversified, incorporating more meat and dairy products, of which Australia is a major supplier. Japan is also an important market for Australian grain and sugar exports," commented ABARE's Executive Director Phillip Glyde on releasing the report.

"However, increases in demand for meat and dairy products have eased, along with slower economic and population growth since the early 1990s, while demand for rice has been falling."

Japan has come to depend heavily on imports for much of its food and stock feed, with imports expanding substantially in the period of rapid economic growth and population increases in the four decades until the early 1990s. In recent years, imports have constituted around 60 per cent of total Japanese food supplies on a calories basis.

"Imports are expected to remain essential for Japan"s food security, with food imports depending on the balance between demand and production from domestic industries, most of which are heavily protected," explained Mr Glyde.

"Japan is now a mature market for food, with little import growth potential, unless there are major trade liberalising reforms. Australia is in a strong position to continue to supply some of the key agricultural commodities required by Japan," Mr Glyde said.

The Japanese population has been forecast to decline from its current level of around 128 million to 124 million by 2020 and 109 million by 2040. This, along with expected relatively slow income growth and an aging population, could result in reduced demand for food.