(Nikkei: November 13, 2015 – p. 5)
The Ministry of Agriculture, Forestry, and Fisheries (MAFF) and the Ministry of Finance (MOF) will review the system of subsidies for land aggregation in an effort to improve agricultural competitiveness in response to the basic TPP agreement.
The prefectural governments will be given the power to decide the amount and other details of subsidies paid to landowners when they lease their land to the Farmland Bank. This is meant to invigorate the Farmland Bank by offering different levels of incentives based on local conditions.
The prefectural governments are currently responsible for handing out subsidies from the national government to “communities” – such as villages and school zones – and “individual farmers” according to the size of land leased to the Farmland Bank. The amount of subsidies is uniform throughout the country at present.
The MAFF and the MOF are planning to allow the prefectural governments to set the level of incentives. Since there are areas where there is strong unity among the farmers and areas were farmers are basically independent, greater flexibility in the subsidies is expected to spur land aggregation.
For example, the prefectures may increase subsidies for communities and reduce subsidies for individuals in areas where there is close cooperation among farmers.
The MAFF and the Ministry of Internal Affairs and Communications are also planning to raise taxes for abandoned farmland, so it is hoped that owners of idle farmland will be more willing to cooperate with land aggregation in their localities.
On the other hand, incentives for individual farmers are expected to be increased in less integrated communities to promote land aggregation.
The MAFF is also contemplating giving priority to local governments with higher utilization rates of the Farmland Bank in the distribution of subsidies. There is a proposal to prioritize subsidies for human resources development and renewal of large equipment required by the expansion of farmland. Specific programs will be developed by the end of this year.
The government is scheduled to release its outline of TPP measures by Nov. 25. One of the key policies is the reduction of production cost through farmland aggregation. Changing the rules for payment of subsidies and increasing taxes on abandoned farmland by 1.8 times are the two major policies for promoting land aggregation. (Slightly abridged)