‘Rice minister' Koizumi faces urgent task to bring prices down quickly
New farm minister Shinjiro Koizumi plans to move from auctioning stockpiled rice to using no-bid contracts, with prices set through negotiation, in an effort to bring down record-high prices.
Koizumi, who took over after his predecessor, Taku Eto, stepped down over a gaffe about rice, faces the urgent task of bringing down prices. Public dissatisfaction has grown following Eto's comment that he never buys rice because his supporters give him so much he can sell the surplus.
'I'll focus on rice, considering myself as the rice minister,' Koizumi told reporters at the Prime Minister's Office on Wednesday.
At a news conference following his inauguration later that evening, Koizumi said that Prime Minister Shigeru Ishiba instructed him to consider releasing stockpiled rice through no-bid contracts.
'I'd like to definitively lower prices with the new voluntary contracts we are going to start,' Koizumi said, adding that he instructed ministry officials to implement measures to conduct no-bid contracts and cancel the next auction scheduled for May 28.
The government has been auctioning off the stockpiled rice since March.
But ruling Liberal Democratic Party lawmakers have been questioning whether the auction method — in which buyers attempt to obtain the product by bidding higher — is really effective in bringing down prices.
'The government purchased the rice in the stockpile (from farmers) at around ¥11,000 ($77) to ¥12,000 (per 60 kilograms). However, it is now being auctioned off for over ¥22,000,' said LDP policy chief Itsunori Onodera last week. 'To me, it's like, 'what is the government doing profiting from this?''
The hope is that through no-bid contracts, the government can sell rice at a lower price not just to distributors but also to retailers so that the product will reach consumers quicker.
'I am now instructing (the ministry) to come up with a new system from scratch,' added Koizumi. 'We need to make a bold move that is different from what we have done in the past, including unlimited release (of stockpiled rice) if there is a demand for it.'
Despite the government having auctioned off a total of around 310,000 metric tons of rice over the past three rounds of auction, prices in supermarkets remain at an all-time high. The average price was ¥4,268 per 5 kg in the week starting May 5, more than double what it was at the same time last year.
The stockpiled rice — of which nearly 97% has been bid for by the nation's biggest distributor, the National Federation of Agricultural Co-operative Associations (Zen-Noh) — is taking time to be processed. Only 10% of the rice auctioned in the first two rounds have hit the shelves so far.
The mismatch between the auction process and the government's intention of bringing down prices may be due to the fact that when the plan was initially announced in February, the release of the stockpile was primarily intended to resolve the bottleneck in the supply chain, not bring down prices.
However, following pressure from the Ishiba administration, the focus has shifted to dealing with the rising prices — which is now Koizumi's mission ahead of a crucial Upper House election in July.
'Going forward, we will first and foremost tackle the rice policy at hand and ensure that the price goes down,' said Koizumi. 'And then, on top of that, we will consider the medium- to long-term rice policy, and what to do if there is a surplus down the line ... and commit to providing a safety net for farmers so that they can engage in agriculture with peace of mind.'
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