A bill for the Livestock Industry Management Stabilization Revised Act, including a new system to provide compensatory subsidies to producers of raw milk for manufacturing uses, was passed in a plenary session of the House of Councilors on June 9 by a majority vote with support from the ruling bloc led by the Liberal Democratic Party.
The Revised Livestock Stabilization Act, which Prime Minister Shinzo Abe regarded as “the first drastic reform of Japanese dairy farming policy in 50 years,” is to be enforced on April 1, 2018.
Under the new compensatory subsidy system, so-called outsider dairy farmers, who have not shipped their fresh milk to designated organizations of dairy farmers, will be also able to receive the subsidy.
The new system removes the ban on “a partial consignment marketing of fresh milk” that enables dairy farmers to sell their milk both to a designated organization and other private companies of milk processing.
Dairy farmers and fresh milk collectors receiving compensatory subsidies will be required to submit their respective “annual marketing plans” to the governmental agency, in which monthly estimated shipment of fresh milk are specified for different uses.
The government and ruling parties will complete drafting governmental and ministerial ordinances regarding implementation of the new system during this summer season.
Since specific issues related to rules and regulations of the new system are left to these governmental and ministerial ordinances, it will be vital for the government and ruling parties to cautiously draft the ordinances so as to avoid losing a demand-supply balance of fresh milk by reducing a handling share of designated organizations of dairy farmers.