August 31, 2009

Japan's new government plans to cut food imports and help local farmers at the expense of US growers under a JPY1 trillion (US$10.8 billion) policy, which will also aim to boost self-sufficiency rate to 50 percent by 2019.

In the year ended March 31, Japan's self-sufficiency rate was 41 percent.

The Democratic Party of Japan won the elections, beating the Liberal Democratic Party which has governed the country almost unbroken since 1955.

The new government had made promises including paying farmers when prices drop below production costs and achieving self-sufficiency in "important grains". Japan imports 59 percent of its foods in the year ended March 31, the highest rate among developed countries, according to the Ministry of Agriculture, Forestry and Fisheries. 

The new government will try to revive agriculture in Japan by supporting every farm with cash payments and the policy will help boost domestic production, said Chino Nobuyuki, president of Tokyo-based Unipac Grain Ltd.

The JPY1 trillion-yen-a-year allocation, equivalent to 40 percent of this fiscal year's agriculture budget, would start from April 2011.

But not all supported the plan. Charlie Utsunomiya, director at the Tokyo office of US Wheat Associates, said Japan should ensure supply security by maintaining relationships with traditional trading partners because the country's weather and soil were unsuitable for high quality wheat production.

The new government also plans to require country-of-origin labelling on processed food and to ban beef imports from any country that ships supplies breaching mad cow disease safeguards.

Subsidies to test all domestic cattle for mad cow disease would also be revived.