#Business Valuation #Farm Alliance Management #Agriculture Business

Tackling Business Valuation Challenges in Agriculture

In the backdrop of the recently enacted Business Financing Promotion Act set to take effect on May 25, 2026, there is an urgent need to address the difficulties surrounding business valuation in agriculture. The common refrain from farmers has been that "we cannot secure loans because we lack collateral.” This has always emphasized the gap between the true performance of agricultural businesses and the traditional financial metrics used in lending decisions.

Farm Alliance Management (FAM), headquartered in Minato, Tokyo, is embarking on a proof of concept (PoC) study to tackle this very issue. Agricultural businesses often possess abilities and potential that cannot be effectively captured by standard financial statements and fixed assets. This discrepancy has resulted in a phenomenon referred to as