The ruling Liberal Democratic Party plans to set up an insurance system to cushion the blow for farmers when the Trans-Pacific Partnership trade pact comes into effect, sources familiar with the matter said Thursday.
It will be among measures to be decided on or around Nov. 25 to support Japan's agricultural sector, help farmers cultivate new markets, promote innovation in the sector and alleviate concerns over a surge in cheap imports under TPP, the source said.
Japan will remove tariffs on 95.1 percent of farm, industrial and other imported products under the framework agreed last month after years of negotiations.
The government aims to submit bills to create the insurance system to the Diet in 2017.
The insurance is likely to guarantee that farmers maintain 80 to 90 percent of their annual revenue, based on past earnings, when they lose revenue after disasters, disease and insect damage — or competition from cheaper foreign products resulting from TPP.
The government is expected to cover about half the cost of the insurance premiums, the source said.
Japan sought to retain tariffs on products from sensitive agricultural industries — rice, wheat, beef and pork, dairy and sugar — to protect domestic farmers from an influx of cheaper foreign products.
But Tokyo was forced to make some concessions, including a reduction in tariffs on some of the more vulnerable industries.