Rice policy: Prolonged high prices create a heavy burden

Amid persistently high rice prices, frustration is rising among the people. It is hoped that the Ministry of Agriculture, Forestry and Fisheries will examine why its price stabilization measures are not working and use the findings to shape future rice policies.

The ministry has released the results of its investigation into the rice shortage that has expanded this summer.

By July, there was no noticeable shortage of rice in the collection stages of harvested rice for delivery and retail. In August, a special advisory was issued for a possible earthquake in the Nankai Trough, prompting consumers to stockpile rice and their purchasing volume increased by 20% to 40% from a year earlier. This made the shortage worse, the ministry said.

In addition, rice stocks tended to be low during the transition period from the 2023 rice harvest to the 2024 harvest. This insufficient supply exacerbated the situation.

The ministry concluded that a delay in understanding the current situation regarding the rice shortage in stores as well as disseminating information to consumers and distributors has caused anxiety among consumers.

As a future measure, the ministry said it plans to conduct thorough investigations of entities, including collection agencies such as Japan Agricultural Cooperatives (JA) and retailers, to determine the volume of rice collected, sold and kept in stock so that can broadcast detailed information to prevent over-buying to stock the product.

While the rapid dissemination of information is important, can it be said that such efforts alone are sufficient? Rice shortages have eased, but price increases – the crux of the problem – have not abated.

The core consumer price index for Tokyo’s 23 wards, which is a leading indicator of national trends, showed that total food prices, excluding perishables, rose 3.8 percent in October from a year earlier. However, rice prices rose by 62.3%.

In some areas, the price of a 5-kilogram bag of rice exceeded 3,000 yen, up more than 1,000 yen from the previous year.

The basic principle of rice policy is to keep prices stable. Rising prices are the biggest concern of the public. In particular, higher prices of rice, a staple food, had a major impact on people’s lives. It’s natural that people were frustrated.

The 2024 rice harvest was higher than average, but the amount of advance payments made by the JA group to rice farmers increased by 20% to 40% in major rice-producing areas compared to the previous year. This may also affect retail prices.

Since rice production costs, including fertilizer and fuel, have increased, some degree of price increase appears to be necessary when considering the business of rice farmers. However, if prices remain high, this could drive people away from rice and rice farmers could suffer as a result.

It is also necessary to reconsider the nation’s rice policy. Anticipating a drop in demand for rice, the government cut rice production by offering farmers subsidies to shift production to other crops, such as wheat, soybeans and feed rice, to stabilize rice prices.

The government’s supply and demand program, which some people call a de facto rice acreage reduction measure, has shown that it cannot respond well to unexpected situations like the one happening now. We hope the government will also explore a flexible approach to prevent similar issues from reoccurring.

(From The Yomiuri Shimbun, November 4, 2024)