Economy

Govt to introduce subsidies to trim farm production costs by 10%

The Yomiuri Shimbun
A supermarket in Sumida Ward, Tokyo

Jiji Press

12:00 JST, June 22, 2022

TOKYO (Jiji Press) — The government said Tuesday that it will create subsidies to cut costs to produce agricultural products by 10% amid surging prices worsened by Russia’s invasion of Ukraine.

At the first meeting of its new task force to fight price rises and secure wage growth, the government also said it will help electricity suppliers expand their energy-saving reward point programs.

“We’ll listen to the voices of the public, closely monitor price trends directly related to their daily lives and take steps carefully and seamlessly,” Prime Minister Fumio Kishida, head of the task force, said at the meeting.

How to deal with price surges will likely be a major issue in the July 10 election for the House of Concillors.

At the task force meeting, the government highlighted its efforts to reduce burdens on households and businesses through measures to curb soaring food and energy prices.

The planned subsidies to reduce agricultural production costs will be designed to promote green agriculture and respond to fertilizer price surges.

The government is also considering curbing the prices of imported wheat it sells to milling companies in October and later.

As electricity supply shortages are expected to occur, the government will help power suppliers boost their energy-saving reward point programs.

“Reward points that can be used widely will be given according to how efficient [electricity] use has become,” Kishida said.

The government will also create a system in which power companies buy from businesses the amounts of electricity they saved.

To shore up local government measures to tackle soaring prices, the state will tap into reserve funds totaling ¥5.5 trillion to increase special grants for regional revitalization.

Ahead of the task force meeting, the government heard opinions from consumer group and supermarket company representatives.

“We cannot absorb all of the cost increases through our corporate efforts alone,” milling company Nippn Corp. President Toshiya Maezuru told reporters after the meeting.