In the week ending in April and beginning in May, the average rice price in Japan was 4,214 yen per 5 kilograms (100 yen) , down 19 yen from the previous week and the first correction in 18 weeks. But rice prices are still about double what they were a year ago. Japanese experts predict that as brand rice prices remain high, the overall price of rice may be limited room to fall. Since the 2024 summer, rice shortages and rising prices have been blamed on factors such as poor harvests. Analysts believe that this protracted“Rice crisis”, reflecting the deep-seated problems of Japanese agriculture and society.
Japanese farmers sow rice in a field in Ishikawa Prefecture on May 12. (visual China)
‘this crisis is not inevitable’
On the evening of May 12, at the end of the NHK ‘s 7 o’clock News, the co-hosts concluded: “With the price of rice high, it is natural for people in supermarkets to pick up 2kg bags of rice instead of 5kg bags in the hope that things will get better once more rice comes into circulation.”
Japanese government stockpiling rice (Visual China)
“May Day” before the holiday, “Global Times” correspondents in Japan near the home of large supermarkets have been out of rice, friends and relatives to exchange where“Rice” information. These days although supermarkets have stock, but some supermarkets in Tokyo and yokohama rice shelves are hanging“Limit a bag” signs.
Time magazine says policies aimed at protecting farmers, combined with extreme weather and other factors, have led to rice shortages in Japan since last year.
Japanese media will continue from last year until now, “Rice shortage” as“Make and rice riots. The crisis has brought to the fore a long-defunct policy known as“De-regulation”, or production controls that limit rice production. The policy was once one of the basic systems in Japan’s agricultural sector. Its purpose was to prevent oversupply of rice by suppressing rice production, and to maintain rice price stability in conjunction with the subsidy mechanism. After World War II, the Japanese government pushed hard to increase rice production because of extreme food shortages. With the advancement of agricultural technology, rice production has increased rapidly, and rice has become the staple food of Japanese families. Starting in the late 1960s, the Japanese diet became increasingly westernized, leading to a severe rice surplus. To that end, in 1970 the Japanese government began restricting new paddy fields and providing subsidies to encourage“Conversion”-the planting of wheat, soybeans or rice for feed. Farmers who grow fodder rice under the government programme receive a subsidy of up to y 105,000 per 0.1 hectare. Through these measures, the government has regulated supply and demand and kept rice prices stable.
However, Masayoshi Honma of Japan’s Asian Growth Research Institute says the policy leaves markets with little room for manoeuvre and that small problems can lead to big disruptions. Suzuki, a professor of agricultural economics at the University of Tokyo, said keeping supply and demand tight meant even small changes in demand could trigger shortages or price rises.
In 2018,14 Dao County states immediately proposed plans to increase rice production after the policy was abolished, but actual rice production continued to fall from 2018 to the 2023 year. Although the 2024 rate has recovered slightly, it has not yet returned to its pre-abolition level.
Why is it so hard to increase rice production? U. S. “Time” magazine bluntly, “Rice is Japan’s most politicized crops. Rice market reform is taboo because politicians care more about farmers’ votes than the agricultural economy. Historically, the JSA has been successful in organising farmers to vote for LDP candidates who pushed for higher rice prices, which were set by the government until 1995. Since the partial liberalization of the market in 1995, the price of rice has been determined by supply and demand, but supply has been artificially limited. Despite the end of the anti-japanese policy, the government still subsidises farmers to plant alternatives such as Soya and animal feed. Some experts believe that the Liberal Democratic Party is reluctant to alienate rural voters. “If the LDP government gets their hands on rice, they will fall,” one LDP member told the Nikkei Asia Review
The anti-dumping policy also has long-term side effects-farmers’ dependence on subsidies and lack of commercial thinking. Moreover, Minon is finding it harder to face up to increasingly open agricultural imports.
“This crisis is not inevitable, but the result of decades of misguided agricultural policies,” time said, adding that unlike natural disasters or external shocks, in an increasingly unstable global food system, japan deliberately destroyed its rice production capacity. If Japan had not restricted production, it could have produced 17m tonnes of rice a year, more than double current production.
Wang Jia, a Japan expert at the Shanghai Academy of Social Sciences’ Institute of Economics, told the global times that the current“Slight drop” in rice prices in Japan is a positive sign, but it still needs to be handled with caution, the decline was very modest compared with previous gains.
Wang Jia believes that although the Japanese rice industry does not account for a large share of the global export market, it has made significant changes in domestic production, consumption or import policies, it could still trigger ripple effects across the global food landscape through multiple channels. Japan’s rice shortage could boost global demand for rice imports and push up world prices. In addition, Japan’s“Rice shortage” will also change the flow of global rice trade. If Japan were to increase its imports significantly (which is unlikely, given Japan’s restrictions on agricultural imports) , it would need to source rice from major exporters, which could change the traditional flow of sales to those exporters, impact on supply chains in other importing countries. In addition, the rice shortage may also trigger policy reactions in other countries. As an important economy, Japan’s actions in the rice market may attract the attention of major rice importing and exporting countries.
Why Mi Gui still hurts farmers
Analysts believe that the“Rice shortage” reflects Japan’s aging farmers, abandoned farmland increased, the deep-seated problems such as declining agricultural attractiveness.
The rising price of rice has not transformed into the actual income of farmers, but exacerbated the plight of agricultural management.
First, while the price of rice has risen, the cost of fertiliser, fuel, farm machinery and labour has also risen sharply. The price of 2024 fertiliser is about 30 per cent higher than in 2021, energy costs such as diesel and electricity are up 25 per cent and machinery repair and replacement costs are up 15 per cent, according to farm groups. This string of rising costs has all but wiped out the increase in income and pushed farmers even deeper into operating deficits.
Second, the distribution structure of rice squeezes farmers’ profit margins. Most rice farmers rely on agricultural cooperatives or bulk wholesalers to sell their rice, which provide a steady market but charge high distribution fees.
Moreover, rigid policy regimes and subsidy mechanisms make it difficult for agricultural production to respond flexibly to changes. There is a subsidy dependency problem in some parts of the country — farmer it is the lesser of two evils to…; would rather… has chosen to plant less, maintain his existing subsidy income, and not increase inputs to expand production. In addition, some Japanese scholars say that most of Japan’s farmland is located in mountainous areas and scattered, it is difficult to effectively expand the scale.
Finally, the number of Japanese farmers has fallen sharply as the country has aged. According to data from Japan’s Ministry of Agriculture, Forestry and fisheries, the average age of rice farmers is about 71, and the number of rice farmers fell by 25 percent between 2015 and 2020, Bloomberg reported. Older farmers generally do not have the resources and energy needed to expand markets and build brands, and young people are deterred by the lack of attractiveness of agriculture.
A Japanese farmer in his 60s told the Global Times’ special correspondent in Japan that his expenses have increased by more than 60 percent compared with 15 years ago. He and his cousin farm together and sell about ¥ 15m a year in produce, some of it from growing vegetables. Due to the rising costs, the actual income is not much, the cousin’s wife also need to go out to do odd jobs to make ends meet. He added that none of his cousin’s three children wanted to continue farming.
Japanese traditional brewing enterprises are also facing the“Once in a century” crisis because of“Rice shortage”. The soaring price of rice has placed a great burden on wine companies. Yoshishi Mizutani, a production manager at a Japanese sake distillery, told Bloomberg, “Farmers are under great pressure, agriculture is in decline, farmers are exiting the industry. Rice supplies will be in short supply for a long time and prices will have to continue to rise,” he said.
Rice with turnips is back on the Japanese table
In order to solve the“Rice shortage”, the Japanese government has launched a reserve of rice. However, the Japanese agricultural association May 9, said: March wholesalers bid for 199,000 tons of rice reserves, only 63,000 tons of shipments completed. Some Japanese media think this is because the wholesaler rice processing capacity is limited, part of the stock of rice is still in the“Brown rice” state. The Ministry of Agriculture, Forestry and Fisheries said the delay was“Due to the fact that March and April are a period of personnel redeployment and there may also be difficulties in deploying trucks”. However, this explanation has not convinced the public.
In addition to releasing rice reserves, the Japanese government is also increasing imports. Private Japanese companies imported about 551 tonnes of rice in February, according to the Ministry of Agriculture, Forestry and Fisheries, more than the total for the 2023 fiscal year. The Korea Agricultural Association confirmed it planned to export up to 24 tonnes of rice to Japan in early June. But that represents only a small fraction of Japan’s total rice consumption.
The Japanese government is considering increasing imports of us rice as part of tariff talks with the US, Kyodo news agency reported. Yench, a scholar of Japanese agricultural reform at the University of Vienna, believes that importing rice from abroad may ease high rice prices in the short term, but in the long run, more rice imports mean farmers have less incentive to plant rice.
In response to the problem of aging producers, Japanese agricultural companies are considering importing foreign labor. However, the Japanese media that Japan in the war for talent in a very disadvantageous position. For workers in Southeast Asia, wages are higher in countries like Europe than in Japan, and the language barrier is lower.
“Japan faces the bitter consequences of neglecting agriculture,” the Australian East Asia Forum said on its website, adding that Japanese efforts to limit production were harming food security. The country’s low Food self-sufficiency ratio puts it in a precarious position. With rice prices at a 50-year high, Japan is facing a staple-food-centred inflation crisis and its households are increasingly burdened with food costs.
Nominal Monthly Wages Ministry of Health, Labour and Welfare about Y308,000, the 39th consecutive month of growth, according to the monthly snapshot of Labour statistics released on the 9 May. However, real wages fell 2.1 per cent year-on-year, the third consecutive month of negative growth, as Consumer price index rose 4.2 per cent.
Now, on social media platforms, people are sharing how to add vegetables to rice, such as corn, potatoes and radishes. For the over-50s, it is reminiscent of the 1983 morning drama Oshin, in which Oshin was forced to eat nothing but rice while living in poverty. Who did not expect in the 21st century, rice on the Japanese table.
Wang Jia believes that the measures taken by the Japanese government to curb the rise in rice prices had“Little effect” at the beginning, which may be the result of a combination of factors. First, the imbalance between supply and demand is relatively large, second, there are strong panic buying and hoarding behavior in the market. The future of rice prices in Japan depends on many factors, such as whether the Japanese government will continue to release rice reserves or take other measures to stabilize the market.