As the Japanese government decides to abolish its decades-old rice subsidy program, farmers are looking toward new business models in order to be able to deal with the looming global competition. The Japanese government approved a plan to end production quotas and all cash handouts for farmers within five years as it negotiates conditions for membership in the Trans Pacific Partnership (TPP) with the U.S. and 11 other countries. Once Japan enters the TPP and cheaper, foreign imported rice floods the market prices will fall; driving Japanese farmers to improve the quality of their rice for high-end niche markets or to create their own marketing and sales companies to avoid the price crash. The government hopes that the move to abolish the subsidies will cause industry consolidation and eliminate smaller, inefficient operations. However the law allows for the continuation of subsidies for farmers that grow rice for animal feed. This consideration is casting doubt as to whether farmers will exit the industry rather than switch to growing rice for the animal feed industry.
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