Historically, the Japanese farmland market has been strongly regulated, although fundamental changes in policy were introduced in 1967 and 1980. This article examines the relationship between farmland prices and rents in Japan for 1955-2000 using the cointegration procedure of Johansen et al. (2000) , which admits structural breaks. Results show the presence of a cointegrating relationship with a significant break in 1980. There is Granger-causality from prices to rents, which suggests that rents are determined within an institutional setting according to farmland prices. The rent-price elasticity is unity, which supports the notion of efficiency in the farmland market.
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