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Japan finmin: New farm spending should lift efficiency, not subsidies
July 14, 2017 / 3:25 AM / 2 months ago

Japan finmin: New farm spending should lift efficiency, not subsidies

Taro Aso, Deputy Prime Minister, Minister of Finance and Minister of State for Financial Services of Japan, speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2017. REUTERS/Lucy Nicholson

TOKYO (Reuters) - Any fresh government spending on Japan’s agriculture sector should be for finding ways to cut its production and shipping costs rather than on subsidies for farmers, Finance Minister Taro Aso said on Friday.

His comments came after Japan and the European Union signed a free-trade pact that has displeased some parts of Japan’s agriculture sector.

Aso told reporters it was too early to offer details on the size of any additional spending on the farm sector or how it would be funded.

But the minister said he wasn’t interested in simply handing out subsidies to farmers who are too weak to compete with an expected increase in dairy and lumber imports from the EU once the trade pact takes effect.

Aso’s comments show the government is likely to turn a deaf ear to any requests for a huge spending increase, and suggest Japan will put more emphasis on improving logistics in the agriculture sector.

“I don’t want backward-looking policies based on the assumption that we will lose out to increased competition,” he said. “I want forward-looking polices that will help us win at the export game.”

Japan and the EU agreed early this month to create the world’s biggest open economic area and signal resistance to what both sides characterized as a shift to protectionism by U.S. President Donald Trump.

Under the pact, Japan will phase out tariffs as high as 29 percent on European hard cheese over 15 years. In return, the EU will eliminate tariffs of up to 10 percent on Japanese cars over seven years.

Some in Japan’s agriculture sector argue that their high costs for fresh milk put them at a disadvantage relative to European cheese makers.

Reporting by Stanley White; Editing by Richard Borsuk

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