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Japan 19.12.2023

Japan unveils financial incentives to boost local cheese production

Source: The DairyNews
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In a bid to stimulate consumer demand for domestically-produced cheese and enhance the sustainability of the dairy industry, the Japanese government has introduced a comprehensive financial incentive program.
 Japan unveils financial incentives to boost local cheese production
Source: freepik.com
The initiative, spearheaded by the Japan Ministry of Agriculture, Forestry and Fisheries (MAFF), targets both the dairy industry producers and product manufacturers.

The primary objective of the project is to elevate the competitiveness of local cheese and facilitate the growth of domestic cheese production. The MAFF aims to address the current supply and demand disparity in locally-produced raw milk, where surplus raw milk often ends up as powdered skim milk due to sluggish domestic demand.

With a substantial budget of approximately JPY2.2bn (US$14.7mn) allocated to this initiative, the plan is to provide subsidies to dairy producer groups. These groups, responsible for collecting raw milk shipments from farmers, will be encouraged to expand the sales of raw milk to manufacturers focusing on cheese production.

"This will incentivize the dairy producer groups to increase sales of domestic raw milk to manufacturers that are planning to produce cheese products, thereby expanding the utilization of this domestic dairy," emphasized the ministry in a formal statement.

Given Japan's status as a key market for cheese, with an average of 6% of Japanese consumers incorporating cheese into their daily diets, the move aims to reduce reliance on imports.

In 2021, Japan was the world's ninth-largest cheese importer, bringing in cheese worth US$1.43bn.

New Zealand, Australia, and the United States were the primary sources, contributing significantly to Japan's cheese imports.

Beyond cheese, the MAFF has also submitted a federal budgeting request of JPY40.6bn (US$271.5mn) for subsidies to be allocated to dairy farmers transitioning to providing processed milk for skimmed milk powder, butter, cheese, cream, and more. The subsidies would extend to cover compensation in the event of a fall in transaction prices, providing a comprehensive boost to the dairy sector.
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