The Abe administration says it will double agricultural exports to ¥1 trillion by 2020, strengthening the farm industry despite the threat of fierce competition once Japan opens its markets more to foreign products under free trade accords.
The target is part of a policy package approved by a government panel that includes measures aimed at facilitating large-scale farming by intensifying the use of farmland, supporting farmers engaging in processing and distributing their produce, and doubling incomes in the agricultural sector as a whole over the next decade.
“I will achieve drastic reforms in agricultural policy by steadily implanting the policies under this plan,” Prime Minister Shinzo Abe told a meeting of the panel in his office Tuesday.
The move signals that the administration is serious about making Japanese farmers more globally competitive as the country negotiates with 11 other nations, including the United States and Australia, the Trans-Pacific Partnership.
The TPP raises the principle of eliminating all tariffs among its members. This is pressuring Japan, which wants to maintain tariffs on imports of some key farm product categories, such as rice, to protect domestic farmers amid fears the free trade agreement could open the way to an influx of cheap imports.
On Tuesday, the TPP members wrapped up a meeting in Singapore by giving up on their goal of achieving a broad agreement before the end of the year. They will continue negotiations next year to iron out their differences over tariffs and other issues.
The agricultural reform plan agreed on by the government panel will also enforce a sweeping overhaul of the heavily protected sector.
While promoting cost reduction, particularly among rice farmers, and encouraging the production of high-value added goods, the government will end its decades-old policy of protecting rice growers.
The government currently limits rice production under the quota system introduced in 1970 to prevent sharp price falls and provides across-the-board cash handouts to farmers joining the production adjustment.
The administration plans to introduce a new system in fiscal 2018 under which rice farmers will decide production volumes while taking into account government forecasts of supply and demand. The major policy shift will entail reduction in subsidies for the farmers.