August 31, 2010
 

Japan to increase farm budget

Japan will increase its farm budget next fiscal year to reduce its reliance on overseas supply amid China's emergence as a net corn importer and Russia's ban on grain exports.
 

The Ministry of Agriculture, Forestry and Fisheries plans to increase cash payments to farmers by 16% to about JPY650 billion (US$7.7 billion) in the year beginning April 1, extending its income-support programme to producers of wheat and soy, said Yasuo Sasaki, senior press counselor at the ministry. The jump comes as the government with the world's biggest public debt aims to curb each ministry's spending by 10% from this fiscal year, Sasaki said.

Japan, the largest corn importer, plans to increase grain output as competition with other buyers intensifies with China's expanding demand. China became a net corn importer this year, buying more than one million tonnes, the most since 1995-1996, according to the USDA.

"We must watch how China will act as the country has provided the biggest factor for expansion in global food demand," Sasaki said. "Given China's growth potential, we need to improve our food self-sufficiency and boost grain production and stockpiles."

Russia's ban on wheat and barley exports made it difficult for Japan to diversify its grain sources outside of North America and Australia, highlighting the importance of domestic production for food security, Sasaki said.

The ministry will start cash payments next fiscal year to producers of crops grown in non-paddy fields. Under the plan, farmers will receive JPY15,000 (US$177) for every 1,000 square meters planted with wheat, soy, sugar beet and potatoes - grown as an alternative to corn. The ministry will also make additional payments as an incentive to boost production of the four crops, such as giving JPY6,360 (US$75) for every 60kg of increased wheat output.