In reversal, Japan now wants rice farmers to produce more. Will it work?

The Star

2 days ago

JOETSU, Japan: For more than half a century, the Japanese government has encouraged its rice farmers to grow less of the crop so that prices of the national staple grain remained relatively high and steady.
Now, under an ambitious agricultural policy announced this year, Tokyo is preparing for a reversal, envisaging a future of bountiful output that would secure the country's food security without sending prices into freefall and hurting its politically influential farmers.
The new direction has taken on an unexpected urgency as Japanese grapple with a shortage of the all-important staple, which has prompted a historic spike in prices, a flood of imports, and interest from President Donald Trump, who has renewed pressure on Japan to buy US rice as part of the allies' elusive trade deal.
It is a policy that many farmers like Kazuhachi Hosaka welcome in principle, but with trepidation because questions over how it would work in practice remain unanswered.
The government is aiming to complete a roadmap by the middle of next year.
"We'd want the government to make sure there's some kind of a safety net for producers," Hosaka said at his farm in the northern prefecture of Niigata.
"It's easy enough to switch rice for feed or processed foods to staple rice. But tilling land for new paddies or switching from wheat or soybeans would require labour, machinery and all kinds of investments."
This year, Hosaka allocated all but 10 hectares (25 acres) of his 180-hectare land for staple rice, reducing feed-use rice by 20 hectares given the attractive prices.
But he worries that prices could plunge if Japan's overall production goes unchecked under the new policy, set to be implemented from the 2027 crop year.
"I do feel conflicted," Hosaka said about the doubling of retail rice prices to above 4,000 yen (US$27.80) for a 5kg bag this year in what has turned into a national crisis.
"It's important that rice prices settle at levels acceptable to both producers and consumers," he said.
Hosaka hopes prices would stabilise around 3,000 to 3,500 yen - a level Prime Minister Shigeru Ishiba also hopes would be palatable for voters.
Supermarket prices fell for a fifth straight week, to 3,801 yen in the seven days to June 22, but were still 70% higher than the same period last year.
For Japanese people, rice is more than just a staple food.
Cultivated in the country for more than 2,000 years, rice is considered sacred in the indigenous Shinto religion and is deeply ingrained in local tradition and culture. The Japanese are famously proud of their short-grain Japonica variety, protecting the market with trade barriers.
So when rice turned into a luxury item this year, consumers fumed and policymakers - facing imminent elections - worried. With an eye on voters ahead of an upper house election on July 20, the government has been releasing emergency rice from its stockpile to sell for about 2,000 yen ($13.83) per 5 kg.
Farmers - also traditionally an important voting bloc for Ishiba's Liberal Democratic Party - were told it was a dire but necessary move to protect Japan's food security and prevent consumers from switching permanently away from homegrown rice.
But for most of the past 50 years, Japan has poured its energy into doing the opposite: providing subsidies to farmers to grow crops other than staple rice so as to prevent oversupply and a fall in prices.
That system backfired last year when the farm ministry misread supply from the heat-damaged 2023 harvest, resulting in a severe shortage in August.
The ensuing surge in prices made Japan an anomaly against a fall in global prices, and exposed the risks of its approach.
The new policy, if successful, would prevent a recurrence by allocating 350,000 tonnes of rice for export in 2030 - an eight-fold jump from 45,000 tonnes last year - that could be redirected to the domestic market in the event of a shortage, the government says.
Some agricultural experts say the policy is unrealistic. The idea of selling expensive Japanese rice abroad is counterintuitive, especially when even Japan is importing record amounts of the grain despite the 341 yen per kg levy that had previously priced foreign products out of the market.
Japanese have also acquired a taste for US Calrose rice, while imports from Taiwan, Thailand and Vietnam have also been popular with businesses and cost-conscious consumers.
"Expensive rice might sell to niche markets, but getting that up to 350,000 tonnes would require price competitiveness, and there's a long way for that," said Kazunuki Ohizumi, professor emeritus at Miyagi University and an expert on agricultural management.
The government aims to provide some form of support but also expects farmers to make their own efforts to consolidate, and make use of artificial intelligence and other technologies to lower production costs.
Meanwhile, Hosaka said, prices of fertilisers, pesticides and fuel have shot up, sending production costs through the roof.
"It's tough," he said. "The government has released quite a bit of stockpiled rice, so I'm very worried about prices falling even further." - Reuters