Japan ditches historical rice curbs, with PM Ishiba's fate at stake

Straits Times

2 days ago

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The government's involvement in managing rice supply made for a tight demand-supply gap incapable of absorbing sudden upticks in demand.
TOKYO – In a break from a decades-old policy, the Japanese government will encourage farmers to disregard a de facto cap on rice production and boost cultivation of the food staple, a step that could win support from the agriculture sector and soothe consumers' frustration over soaring living costs.
'We will shift our policy to increase rice production, so that we will be capable of responding to changes in demand and supply flexibly and comprehensively,' said Prime Minister Shigeru Ishiba in a ministerial-level meeting on Aug 5 that focused on securing a stable supply of rice.
The move may give Mr Ishiba another mission that justifies staying in power – ignoring calls to step down after the
ruling coalition's poor showing in an Upper House election in July.
It could also spotlight agriculture minister Shinjiro Koizumi, who has been touted as a potential future prime minister, as Mr Ishiba's fate hangs in the balance.
As part of the initiative, the government will also work to ensure rice paddies are passed on to future generations and urge farmers to seize export opportunities, Mr Ishiba said.
Rice exports rose 22.6 per cent in the first half of 2025, as surging interest in Japanese cuisine led to an increase in the number of Japanese restaurants overseas.
'We will devote our efforts to drive a drastic expansion of exports to levels where we will be undeterred by even the new tariff measures imposed by the US,' said Mr Ishiba.
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The shift in policy may be welcomed by farmers, some of whom have bristled at being whipsawed by pressures to limit rice production as well as by government intervention in rice prices.
Currently, the government provides subsidies meant to encourage farmers to limit rice cultivation by switching to other crops. The system keeps a floor under rice prices.
The government's involvement in managing rice supply made for a tight demand-supply gap incapable of absorbing sudden upticks in demand.
Increasing production indicates a shift in that policy, and could help avoid the kind of sudden steep rise in rice prices seen in the past year.
Whether a new approach will have broader appeal to a public that punished the ruling Liberal Democratic Party and its partner Komeito in July's election isn't clear.
Anger over persistent growth in living costs was a key factor in the outcome, which left the ruling coalition without a majority in either house of Parliament.
Mr Ishiba still faces pressure from within the party to stand down after that dismal showing.
The party is set to discuss the results of the election and the prime minister's fate at a plenary meeting on Aug 8.
Despite the calls for his head, Mr Ishiba has maintained
he will hang on to his post to see his policies through, including the implementation of the US trade deal.
A poll conducted over the weekend by broadcaster JNN showed that 46 per cent of respondents thought a loss of faith in the LDP was the cause of their election loss, while 20 per cent thought the defeat was caused by Mr Ishiba's government, suggesting that respondents were disillusioned with the party but not necessarily Mr Ishiba himself.
The same poll showed that while 43 per cent thought Mr Ishiba should quit, 47 per cent did not think he should.
Over the past couple of years, rice has become a symbol of how inflation is weighing on household expenses as real wages fail to keep pace with soaring costs.
The nation's key inflation gauge reached 3.3 per cent in June, led by surging food prices.
While rice prices doubled from a year earlier in the spring, the gains have moderated somewhat since the government channelled emergency stockpiles into the market.
The new approach signals a shift from the government's decade-long involvement in managing rice supply to ensure prices didn't drop and farmers stayed in business.
The policy was initially implemented in the 70s to manage oversupply.
It has since been officially phased out, but the government still intervenes.
In addition to the incentives to grow crops other than rice, the government provides a 'target' rice supply that many farmers comply with, effectively capping rice production. BLOOMBERG