The Liberal Democratic Party approved a draft amendment on expanding the range of subsidies to be provided to dairy farmers who produce raw milk for butter and other dairy products at its meeting of legislators who oversee matters concerning agriculture and forestry on Feb. 22.
Currently, subsides are limited to raw milk producers who ship their products through agricultural cooperatives’ organizations. The amendment would allow raw milk producers to receive subsidies even when they distribute milk through channels other than agricultural cooperatives’ organizations on the condition that they submit to the government their annual sales plans to cooperate in adjusting demand and supply. The Ministry of Agriculture, Forestry and Fisheries will submit to the current Diet session a bill aimed at revising the law concerning the stabilization of livestock business.
Of the total raw milk output, 97% is currently being traded through ten “designated milk producer organizations,” all of which are affiliated with the agricultural cooperatives. Dairy farmers do not qualify for subsidies if they do not ship through these organizations. They are also required to entrust these bodies with the sales of their entire raw milk output.
The change in the subsidy coverage is aimed at creating an environment in which dairy farmers are able to make independent decisions on where to ship their products. “If the principle of competition works, milk distribution will become more efficient,” said a senior MAFF official.
The designated milk producer organizations have long played a role in designating raw milk for drinking or dairy products depending on demand, as milk output differs depending on the season and region. To ensure the government can be involved in the adjustment of demand and supply after reviewing the subsidy program, dairy farmers will be required to submit their annual sales plans.