Japan's rice policies put to test as retailers, farmers continue struggling
FUKUOKA -- Some retailers are perplexed by continuing rice shortages in Japan despite the release of government stockpiles, while farmers are also discontent with policies prioritizing affordability. An expert urges the public to consider the issue when voting in the upcoming House of Councillors election this summer.
As rice prices continue to soar, the sale of government stockpiled rice through negotiated contracts has begun in the Kanto region including Tokyo, among other areas. Following Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi's declaration that rice would be available at "around 2,000 yen (about $14) per 5 kilograms in stores," people lined up nationwide to purchase the staple. While consumer expectations for cheaper rice are high, the impact on overall rice prices remains uncertain. Meanwhile, farmers are expressing confusion, saying that consumers are only seeking low prices. What lies ahead for rice price measures that prioritize "urgency" and "affordability"?
"We can't get enough brown rice. I never imagined it would come to this," said Yukihiro Nishijima, 37, the second-generation owner of the Meinohama Kotabe Beikokuten rice store in Fukuoka's Nishi Ward, looking confused. The store is struggling to secure enough brown rice, leading them to post a notice stating, "We are not accepting new customers."
Distribution disruptions began with the 2023 rice harvest. The wholesaler from which Nishijima had been continuously purchasing rice began to slow down its shipments. Previously, he could choose wholesalers based on price, but as rice prices rose, wholesalers began asking, "How much can you offer?" The high purchase price and reduced transaction volume have made it challenging to secure profits. "Even if they promote it as costing only 2,000 yen, it's old rice. Prices (for new rice) won't drop," said Nishijima, who plans to secure the next new rice harvest directly from farmers.
'Cheaper by even 1 yen'
Rice prices are continuing to rise. According to the agriculture ministry, the average price for 5 kg of rice sold in supermarkets nationwide from May 12 to 18 was 4,285 yen (approx. $30) including tax, marking a new high for the second consecutive week. This was 2,165 yen (around $15) higher than the same period last year and 17 yen (roughly 12 cents) higher than the previous week.
Amid the increases, Koizumi, who succeeded Taku Eto as farm minister after his resignation over a rice-related gaffe, announced the release of government stockpiled rice through negotiated contracts. This unprecedented measure, which can be seen as market intervention, received a flood of applications for 300,000 metric tons of rice earmarked for major businesses and 80,000 tons for smaller retailers and rice stores.
Fukuoka-based Mr Max Holdings Ltd., the operator of a discount store chain in the Kanto, Chugoku and Kyushu regions, applied for 5,000 tons of reserve rice. The company aims to sell the rice at all its 57 stores for less than 2,000 yen per 5 kg. A spokesperson expressed enthusiasm, saying, "We want to lower the price even by 1 yen."
A female company worker in her 50s from Fukuoka said of Koizumi, "He has charisma, and his swift response is promising. I want him to enable us to eat cheap and delicious rice."
The agriculture ministry's regional offices were also surprised by this unusual initiative, which can be taken as market intervention.
An employee at a regional agricultural administration office in west Japan said, "This is a situation in which we learn about the details from the minister's news press conferences. We've never had a project like this." The office is apparently busy handling inquiries from businesses and arranging the transportation of stockpiled rice. However, the roughly 300,000 tons of reserve rice released this time is a small amount compared to the annual consumption of about 7 million tons nationwide. The staff member hesitantly said, "I can't say in my capacity, but I doubt there will be a price reduction effect ..."
The need for a long-term perspective
What do producers think? A farmer in her 50s operating in the Saga Plains, one of the Kyushu region's leading grain belts, expressed disappointment, saying, "It's unfortunate that only low prices are being sought."
Rice farming requires expensive agricultural machinery, and even with loans, farmers have apparently struggled to repay them due to low rice prices. "Just when I began to think my sons could take over (rice production) with peace of mind as rice prices finally rose, the public all started saying, 'It's too expensive,' and, 'Make it cheaper.' I feel the government's response only considers consumers," she said.
Agricultural economics associate professor Takaaki Watanabe at Kyushu University's graduate school pointed out, "The government has promoted the liberalization of agricultural imports and abolished price maintenance policies. Distribution and transactions have been liberalized, leading to a situation where even a slight shortage of rice causes prices to soar."
Considering the upcoming House of Councillors election in July, he called for the necessity to view agricultural policies from a long-term perspective, stating, "Will this be a temporary measure for election purposes, or a step toward restructuring the rice policy? I hope people will pay attention to each political party's policies on how the nation should be involved in rice production."
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