How ‘vintage' rice is shaking up Japanese politics

Japan Times

2 days ago

To solve the problem of soaring rice prices, Japan's turning to a classic retailer's playbook: rebranding the old as "vintage.'
That's what convenience store chain Lawson is dubbing onigiri rice balls made from the grain harvested in 2021 and released from Japan's strategic reserves in an effort to bring down prices.
Like eggs in the U.S., the cost of the country's staple, which has doubled over the past 12 months, has been dominating the headlines. And there's far more at stake than the size of the grocery bill: Rice could determine the fate of the government itself.
The panic has already caused one political casualty and now hangs over the administration of Prime Minister Shigeru Ishiba ahead of this summer's Upper House elections, where voters are set to punish the government over dissatisfaction with inflation. But the crisis might also be the making of a future leader.
Japanese have largely gritted their teeth and lived with the last few years of rising prices, surprising many (myself included). That's allowed firms to pass on increased costs in a way they've not been able to do for years.
But rice is where consumers have drawn the line. The staple rose by 98% in the past year, adding almost half a percentage point to headline inflation. A 5 kilogram (11 pound) bag is more than ¥4,000 ($28); calorie-for-calorie, the grain is now more expensive than bread.
Enter new Agriculture Minister Shinjiro Koizumi, who's winning hearts (and stomachs) with his approach. Earlier moves to release government stockpiles failed to cut prices. But within days of taking over, Koizumi bypassed auctions and directly sold strategic reserves to retailers. And it's working: Bags of this "vintage' rice are now on supermarket shelves for under ¥2,000.
Rice is deeply connected with the Japanese state. Cultivation in its current form dates back more than 3,000 years, when it came from China or the Korean Peninsula. As the country proper was first being formed, authorities collected it as a tax on leased land; during feudal years, how much of the crop a lord could produce would dictate how far he could rise.
Children are taught that there are seven gods sleeping in each grain, to encourage them to clear their bowl; sake, brewed from rice, is a sacred drink in Shinto rituals. The Rice Riots of 1918, which in a worrying sign for Ishiba erupted in response to surging prices, killed 20, led to 25,000 arrests and brought down the government. At one point, the staple made up 70% of the average daily calorie intake.
In other words, rice is important. So for years, the government has been involved in the market, seeking to maintain self-sufficiency and keep prices at a level that leaves farmers in business but doesn't aggrieve consumers. Official policy created chronic rice surpluses in the 1960s, and so for decades the government paid farmers to make less. This system, known as gentan, was officially discontinued in 2018, but remains informally today, with the powerful Japan Agricultural Cooperatives, or JA, overseeing voluntary cuts.
And consumption has been in free-fall for decades, as diets changed to accommodate more international foods. The average Japanese eats less than half the 118 kg a year they ate in 1962. But one reason for this year's shock appears to have been demand exceeding forecasts; with a declining population of farmers incentivized to produce less, it doesn't take much to create an imbalance.
The current situation stems from contradictory policies. The government wants cheap rice, but only made in Japan. This is where Koizumi can shine. It is to his credit that he was willing to take on such a high-risk job. If he fails to reduce prices, he'll look incompetent; bring them down too much and he'll upset the powerful farming bloc.
Perhaps he is looking to his father's playbook. Junichiro Koizumi, the fondly remembered prime minister of the early 2000s, made his name by putting country above party and tackling a vast vested interest, the mail and banking giant Japan Post. Privatizing it became his goal, a target on which to paint public dissatisfaction with the old ways.
It became Koizumi Sr.'s greatest victory. Now, his son can do the same with the farming system, long known to be inefficient but now in need of urgent reform. With some 40% of paddy fields lying fallow, Japan could easily grow more by turning the excess into an export at a time of great premiums for Japanese food. Consolidation of its small farms, something JA will oppose, will encourage efficiency.
Koizumi Jr. can imitate his father's legacy by tackling this holdover, taking on JA and showing that he's a man of action, too. The jury is out on whether the country will need a new prime minister after this summer's elections, but there will be a vacancy before too long.
Koizumi did well in last year's leadership election, but his greatest weakness was his lack of accomplishments. Now, he has a problem that, like a vintage onigiri, he can really sink his teeth into.
Gearoid Reidy is a Bloomberg Opinion columnist covering Japan and the Koreas.