TOKYO: Japan’s agriculture ministry will set aside 110 billion yen ($890 million) to help farmers consolidate operations and boost productivity, aiming to blunt the impact of the Trans-Pacific Partnership free trade agreement.
The program will be financed by this fiscal year’s supplementary budget and the fiscal 2016 spending package. The fund will cover up to half the cost of agricultural equipment purchased by groups of farmers. It will help neighboring farmers build joint facilities for mixing animal feed or purchase high-tech farming machinery, which in turn could encourage consolidation.
A staff bank that will match farmers with people experienced in retail sales and international business is in the works as well. Growers will also get help in developing processed food products and opening up sales channels outside agricultural cooperatives. This will let them add value to farm products and avoid head-on price competition with imports.
With the TPP likely to boost exports, the government will also encourage talks between farmers and foreign trade companies that may be interested in importing Japanese products. It will also set up wholesale markets near Narita Airport and Chubu Airport.
The government seeks to avoid a repeat of the response to 1993’s agreement concluding the Uruguay Round of multilateral trade talks. Government measures back then came under fire for lavishing funds on public works projects without actually making farmers more competitive. “To claim that this is pork-barrel spending or a waste of money will offend farmers,” Agriculture Minister Hiroshi Moriyama said Friday.
The government will also play defense. It will set aside 481 billion yen for farm-related construction projects, up 27% from the combined sum earmarked in the fiscal 2014 extra budget and the fiscal 2015 annual budget. The amount had to be raised by at least 100 billion yen to win elections, ruling Liberal Democratic Party members argued.
