Tokyo Electric Power (Tepco) will have to compensate farmers for losses caused by the nuclear radiation leaking from its power plants, Japan has said.
The firm will have to take responsibility, said Chief Cabinet Secretary Yukio Edano at a press conference.
Japan has banned all shipments of milk, spinach and other leaf vegetables from the area around Fukushima.
The government has urged calm saying health risks are limited.
"Even if you eat contaminated vegetables several times, it will not harm your health at all," said Mr Edano.
The World Health Organisation (WHO), however, said the radiation impact was becoming more serious than first thought.
"It's safe to suppose that some contaminated produce got out of the contamination zone," said Peter Cordingley, spokesman for the WHO.
Mounting costs
Adding to Tepco's worries are the fears of contamination in the water.
High levels of radioactive iodine were detected in the water around the plant.
The government has urged some residents to stop drinking tap water.
All this is unfolding while Tepco continues to try and bring the nuclear power plant under control.
The cost of cleaning up the Fukushima Daiichi nuclear plant as well as compensating victims is likely to be in the billions of dollars for Tepco, analysts said.
&m=20110322194853){kind=small}