The Japanese government has decided to do away with a four-decade-old policy that pays farmers to grow less rice so as to support the price of the grain and to guarantee farmers a stable income.
The move is part of what will be a slew of agricultural reforms to increase efficiency and remove hurdles to Japan's negotiations on free trade pacts, including the 12-nation Trans-Pacific Partnership (TPP).
Subsidies paid to farmers under this so-called "gentan" ("gen" means reduce and "tan" is the unit of measure for rice fields) policy will be gradually phased out over the next five years.
The decision was taken at a government committee to rejuvenate the farm sector, headed by Prime Minister Shinzo Abe.
Mr Abe said at the meeting: "We want to create an environment where management-minded farmers can operate. We have to make farming a growth industry that brings farmers more income.
"We also want to promote major reforms in agriculture administration. Anything that goes against structural reforms will be swept aside," he added.
A final vision for reforming the agricultural sector, containing more deregulation, is expected to be announced by year-end.
The end of the "gentan" policy does not mean rice farmers will suffer financially. To prevent over-production of rice, the government will pay farmers for switching from planting rice for the dinner table to growing rice and other crops for animal feed.
There will also be new subsidies for farmers, for reasons such as participating in farmland maintenance, by dredging waterways, and keeping farm roads trim.
In total, the new subsidies will raise the incomes of Japanese farmers by about 13 per cent.