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  5. Was the Expenditure for the Income Security Program for Farmer Households Wasteful, Irresponsible Spending?

2013 Vol.1
Was the Expenditure for the Income Security Program for Farmer Households Wasteful, Irresponsible Spending?

2013/01/01

The Income Security Program for Farmer Households was a central policy measure in the manifesto presented by the Democratic Party at the time of the 2009 lower-house general election. Under the measure to stabilize the incomes of farmers growing rice and other crops that started in 2007 under the Liberal Democratic administration, the payment recipients were limited to large-scale farmers in order to drastically improve the structure of Japan`s stagnant agricultural sector while making a shift to WTO-compliant subsidies. Opposition to the measure was strong in farming regions, which may be one of the reasons for the Democratic Party`s clear victory in the 2009 lower-house general election. Under the Income Security Program for Farmer Households implemented by the Democratic Party, the payment recipients included not only large-scale farmers, but also farmers with a certain level of sales (hanbai noka) who participated in a production adjustment program. In the beginning, there were criticisms that subsidy expenditure without narrowly defined recipients was wasteful, irresponsible spending. Such aid, however, is common in Europe and the United States, and it is considered that measures to stabilize farmers` business should be implemented separately from measures to promote large-scale farming. However, it is true that the effect of income security is relatively small as the scale of farmers in Japan is not as large as that in Europe and the United States. Therefore, it is important to promote the aggregation of farmland and the expansion of farmers` operations, along with the implementation of the Income Security Program. As for compliance with WTO rules, which is one of the objectives of the Program, subsidies that are subject to cuts (“yellow box” support) are increasing as a shift is made from a measure to stabilize the incomes of farmers growing rice and other crops to the Income Security Program for Farmer Households. From the standpoint of securing as much strategic agricultural aid as possible, subsidies that are not subject to cuts (“green box” support) should be increased.

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