The Finance Ministry wants to reduce or abolish the special subsidies paid to farmers who cultivate land deemed to be at a geographical disadvantage, ministry sources said Wednesday.
The changes, which would begin fiscal 2005, are part of efforts to fix the nation's debt-ridden finances.
The subsidies were introduced in fiscal 2000 to prevent a further slide in the nation's food self-sufficiency by encouraging farmers to continue cultivating small-scale farmlands or farms in sloped areas.
The government currently pays about 80 percent of the extra production costs such farmers pay. The subsidies total about 50 billion yen a year.
The central government, which funds part of the subsidies, has allocated 16.8 billion yen in the fiscal 2004 budget for such payments.
The ministry will soon begin consultations with the Agriculture, Forestry and Fisheries Ministry and the ruling parties to significantly cut or abolish such subsidies in the budget, they said.
The Fiscal System Council, a panel advising the finance minister, is set to call for a revision to the subsidies in its report to be submitted to Finance Minister Sadakazu Tanigaki on Monday, according to a draft of the report obtained by Kyodo News.