LDP takes aim at rice farmers

JIJI

The government plans to stop controlling rice prices by halving subsidies to farmers who voluntarily reduce their harvests, informed sources said Sunday.

The move, promoted by the ruling Liberal Democratic Party, is part of a major shift in agricultural policy toward more competition and less protection. If it works, the long-held policy of reducing rice acreage would be terminated in five years.

Japan has been shoring up rice prices since the 1970s by paying farmers to grow less of the staple crop so the government can adjust supply to meet demand amid the national downtrend in rice consumption.

In response to calls from the ruling coalition to cushion the impact of the cut, a proposal has been made to use the savings from the subsidy reduction to help all farmers, the sources said.

The subsidies consist of two parts — fixed benefits, which are based on the reduction in arable paddies, and income support to make up for losses caused by falling rice prices.

The government and the LDP are discussing plans to cut fixed benefits, which are paid at a rate of ¥15,000 per 10 ares (an are is 0.1 hectare), to ¥7,500 per 10 ares in fiscal 2014. The benefits would then be scrapped completely within five years, the sources said.

Before that time, it has also been proposed that the subsidy savings be used to aid farmers who are actively expanding cultivation, in addition to the idea of spreading the money out to all farmers.

The income support portion, which is paid if rice prices fall below average, is scheduled to be scrapped sooner, in fiscal 2014.

That portion of the rice subsidy was introduced by the government led by the Democratic Party of Japan. It has been criticized as an easy handout that benefits uncompetitive farmers, including small-scale farmers and part-timers.

Based on discussions with the ruling coalition, the government will come up with a reform plan for the farm sector later this month, the sources said.

  • zer0_0zor0

    This doesn’t sound too unreasonable from what is in the article, but nothing is mentioned about the goal of increasing the number of paddies, which I gather is expected to be the indirect result obtained by reducing subsidies aimed at curbing production.
    Now if other countries, like the USA, in particular, follow suit, the so-called market mechanism might have a chance to demonstrate whether it will work effectively to help feed people and make small-scale farming a viable lifestyle.
    How does this move relate to the TPP?

  • zer0_0zor0

    No one has asserted anything of the sort, so no need to create strawmen arguments.
    The article leaves a lot to be desired, as the subsidies in question would not seem to be related to protecting the Japanese market from excessively cheap imports from developing countries and agribusiness factor farms. Opening up the market by eliminating tariffs would almost certainly have the opposite effect, bringing about a reduction in the number of paddies under cultivation in Japan.

    On the other hand, if they do increase production of rice by eliminating the subsidies, then the price of Japanese rice may come down a bit. Since tarrifs are probably based on domestic prices, there may be an indirect impact on imports.

    • Mark Garrett

      “No one has asserted anything of the sort, so no need to create strawmen arguments.”

      I’f you’re referring to my last comment about subsidies and tariffs being used to protect Japanese food security then you haven’t really been following this topic. That is THE most often used argument.

      “…the subsidies in question would not seem to be related to protecting Japanese market from excessively cheap imports…”

      Really?? Then what DO YOU attribute them to??