Japan plans to limit rice subsidy recipients to large-scale farmers

Japan is planning to limit recipients of rice production adjustment subsidies to large-scale farmers and enhance their competitiveness to cope with cheaper imports under the planned Trans-Pacific Partnership free trade agreement, officials said Friday.

The government and ruling bloc are considering setting the minimum rice acreage requirement for subsidy recipients at 10 hectares in Hokkaido and 4 hectares elsewhere, they said.

At the same time, they are planning to institute a new subsidy to encourage small farmers to maintain their farmland, the officials said.

The government plans to submit a bill on reforming the subsidies next year after proposing the reform in its agriculture vitalization package to be revealed possibly in November, they said.

The reform is expected to encourage ambitious farmers to expand rice acreage while preventing small farmers from abandoning their farmland in mountainous regions.

At a meeting of the ruling Liberal Democratic Party on Friday, some participants called for the creation of a mechanism to enlarge farms and improve productivity, party officials said.

"It is not wrong to integrate farms to reduce production costs and raise profits for farmers," Finance Minister Taro Aso told a press conference.

Rice production adjustment subsidies are provided to farmers participating in the government-led rice output reduction program to prevent rice prices from plunging amid a decline in consumption.

The government now intends to reform the program launched in 1970 to strengthen the agricultural sector while promoting the TPP free trade talks.

"We would like to promote reform to allow farmers to produce products to meet demand according to their own judgment," Agriculture, Forestry and Fisheries Minister Yoshimasa Hayashi told a press conference.