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Politics

Japan eyes new farm aid to soften blow from trade deals

$2.6bn sought as TPP and European pact loom

TOKYO -- The Japanese government is moving to greenlight roughly 300 billion yen ($2.64 billion) in spending this fiscal year to help farmers facing low-cost imports under new free trade agreements.

This would come on top of the money that began to be set aside in fiscal 2015 to blunt the effects of a fully implemented Trans-Pacific Partnership. Already, a total of 657.5 billion yen in funding is starting to be phased in even though the TTP has yet to be implemented. Japan came to terms with 10 other countries on ministerial-level TPP plans last week and is seen finalizing an economic partnership agreement with the European Union by year-end.

The ruling Liberal Democratic Party started discussing the new spending Tuesday at an internal task force assigned to handle the two trade deals. Plans are to continue talks within the party until next week at the earliest, then have the Diet approve the extra funding in a supplementary budget.

The money would cover land improvement and other projects aimed at assisting farmers in coping with relaxed import rules. For the likely influx of cheese from Europe, funds would help boost productivity at domestic cheesemakers. Dairy farmers would also receive aid for fodder.

Ruling bloc politicians aligned with agricultural interests have stubbornly lobbied for a massive aid package. They are at odds with the Ministry of Finance, which seeks to limit such spending.

Aid set aside topped 300 billion yen in each of the past two fiscal years. But it can be downsized now that the U.S. has pulled out of the TPP, the argument goes. America would have accounted for 40% of the value of agricultural and wood imports.

The pro-farmer camp has pushed back, saying the EU trade agreement necessitates higher spending. A lawmaker who attended Tuesday's LDP task force meeting noted the political implications of stinginess.

"Campaigns in Hokkaido and Tohoku were incredibly tough during October's general election," the lawmaker said, referring to northern farming regions of Japan. "We need to have firm agriculture and forestry measures in place, or else we will lose the next election."

(Nikkei)

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