> Determining whether there is an actual labor shortage is pretty difficult.

Using the technical definition, it's actually pretty easy. There is also a colloquial definition. But under the colloquial definition it is not just pretty difficult, its is actually impossible as it isn't real thing.

> But that means that one person gets to do the farming for a higher margin and everybody else loses their profession.

Here's what happens here: One large farmer captures most of the market and then relies on farm workers to get the job done, while small farmers are left under-utilized. It seems the same is true in Japan. After all, we're talking about farm laborers, not famers. The small-plot farmer who is also doing all the work doesn't need legions of employees.

Which is all well and good, but when the larger farmer reaches the limits of how many people they can hire, the solution is simple: Cut back. The under-utilized farmers will happily step in to fill the gap.

> It's difficult to predict whether that will happen.

It might not happen, but if it doesn't happen, it wasn't ever needed. Do you see a reason for farmers to farm for no reason? I don't mean no reason like overproducing to ensure there is still food in the event of a catastrophe. That is actually a valid reason, even if it doesn't always seem like it. I mean like produce it and then immediately turn it back into the ground.