(Yomiuri: November 5, 2015 – p. 12)
The Finance Ministry announced on Nov. 4 its policies for fiscal restructuring in the agriculture, forestry, and fisheries sectors in the formulation of the FY2016 budget. In terms of domestic measures to be taken to prepare for the TPP agreement’s effectuation, the ministry indicated its intent to work on policies that will help expand exports and enhance farmers’ competitiveness. It applied brakes on “land improvement projects” for the development and conservation of farmland, warning against an increase in spending for such projects.
The Finance Ministry will present its recommendations to the Fiscal System Council (an advisory body to the finance minister) on Nov. 4. It will promote the setting of clear goals for land improvement projects and efforts to expand exports, instead of handing out subsidies indiscriminately. It will also call for a comprehensive review of existing subsidies and tax systems.
The recommendations warn against expansion of land improvement projects in particular. The Ministry asked that if such projects are to be undertaken as a TPP measure, objective, measurable criteria of success should be set, instead of increasing spending thoughtlessly. It asserted that projects should be prioritized and policies for enhancing farmers’ competitiveness should be implemented.
However, some Liberal Democratic Party (LDP) members are clamoring for the expansion of land improvement projects. This issue is likely to become a hot topic in the discussions to formulate the outline of TPP measures by late November and the budget formulation process up to the end of this year.
The Finance Ministry also recommended structural reform to move away from rice-centered agriculture and implementation of policies to encourage diversification to the production of more profitable vegetables and other crops.
The ministry also announced its recommendations for official development assistance (ODA) on Nov. 4. With the government’s fiscal difficulties, it will be difficult to increase the ODA budget, so the ministry proposed promoting the expansion of private sector investment. (Slightly abridged)