BERLIN
Rice, a staple in Japanese and other Asian cuisines, is putting pressure on consumers and politicians in Japan due to its rising price amid declining production, prompting the country to evaluate its food security.
The average price of a 5-kilogram (11-pound) bag of rice rose by more than 4,000 Japanese yen ($28) in May, a 98% increase year-on-year, as fewer varieties of rice were available in the markets.
Global instability, the climate crisis, and small-scale farming practices pressure the rice market while weakening Japan’s bargaining hand against the US in tariff negotiations.
Rice is facing a serious supply shortage, as its price has doubled since last summer. Despite the Japanese government’s efforts to release emergency reserves to lower prices, rice remains high amid declining production and its perceived scarcity.
Japan’s traditional cuisine attaches great importance to rice, but its production has been affected by recent climate events and natural disasters. Low farm yields and the booming tourism sector in the country are the main factors affecting rice prices.
Rising rice prices pushed inflation up, and Japan resorted to importing rice from South Korea for the first time in years.
Japan has been struggling with disinflation for years; in May, the country's inflation rate was 3.6%, higher than other developed countries and well above the Bank of Japan's 2% target.
Rice prices began to rise alongside wheat prices following the outbreak of the Russia-Ukraine war, which resulted in a supply shortage. Meanwhile, the record-breaking hot summer of 2023 destroyed the harvest, and a major earthquake warning in August last year sparked panic buying and stockpiling of rice, resulting in another scarcity.
Rice stocks from the 2024 harvest were sold around two months earlier than scheduled, and the wholesale price of rice increased by more than 40% month-on-month in Sept. 2024, and prices have only continued to rise since then due to ongoing supply shortages and increased demand.
Since 1972, the Japanese government has managed to control rice production in the country, balancing supply and demand and encouraging farmers to produce less when necessary, but the Japanese Ministry of Agriculture underestimated this balance for 2023 and 2024.
People resumed their normal routines following the pandemic. Tourists and the domestic population's eating habits boosted rice consumption in the country.
Former Japanese Farm Minister Taku Eto resigned in May after much backlash following his statements. Eto stated he has “never bought rice” himself, as his “supporters give quite a lot of rice.”
“I have so much rice at home that I could sell it,” he said amid the rice crisis in the country.
Eto apologized for the “extremely inappropriate remark” he made and resigned on May 21.
Following these developments, rice became a focal point in the next month’s elections.
Meanwhile, Shinjiro Koizumi replaced Eto as the Minister of Agriculture, Forestry, and Fisheries. The newly appointed 44-year-old is the second son of the popular former Prime Minister Junichiro Koizumi.
On June 10, the minister announced that an additional 200,000 tons of rice from the 910,000-ton reserve would be released to help stabilize rising prices, while 100,000 tons from the 2020 and 2021 harvests would be made available in two batches.
According to Koizumi, a 5-kilogram bag of rice will cost approximately 2,000 Japanese yen ($14) in stores.
The government decided not to sell rice to wholesalers through an auction, instead selling it directly to retail chains at a fixed price to ensure that consumer rice prices fall, sparking much debate over a taboo decision.
The Bank of Japan (BoJ) is closely monitoring rice prices right now, as the decline has prevented the bank from raising its low interest rate and shrinking its balance sheet, which has grown to the size of the Japanese economy.
The BoJ maintained its short-term policy rate at 0.5% on Tuesday, within estimates. The rate has been the same since the last increase in January.
Moreover, some experts believe the current rice crisis will encourage the government to make concessions by increasing agricultural imports and lowering non-tariff barriers, reducing the country's bargaining power in trade talks with the US.
US President Donald Trump's sweeping reciprocal tariffs, which hit Japan at a 24% rate, were supplemented by 25% auto, steel, and aluminum tariffs.
Rice imports are important in the US-Japan trade negotiations, and if the talks fail, the country could face reciprocal tariffs of more than 24%, while Washington is pressuring Japan to import more US agricultural products, including rice.
Trump has been critical of Japan’s agricultural tariffs and standards, such as prohibiting genetically modified imports into the country. Trump wants to see tariff negotiations done by July 9, but Japanese Prime Minister Shigeru Ishiba wants to postpone until the second half of July, which is after the upcoming parliamentary elections, so as not to lose votes in rural areas.
Japan imports around 770,000 tons of rice duty-free, half of which is from the US.
While Japan’s geographical structure as an island makes it difficult to cultivate agricultural products like wheat, crops like rice can flourish.
However, most Japanese farmers work part-time on small plots of land, and many of them are getting older, mirroring the country's aging population, with younger people unwilling to take over agricultural family businesses.
According to the Japanese Ministry of Agriculture, Forestry, and Fisheries, roughly 90% of individual farms are run by farmers aged 60 and up, with approximately 70% lacking successors.
The average age of Japanese farmers is 69, according to the most recent data, and the number of farmers has decreased from 2.3 million in 2000 to around 1 million, with individual farmers being replaced by large-scale farmers and agricultural firms.
Rice fields fell from a peak of 3.4 million hectares (13.1 square miles) of land in 1961 to 2.3 million hectares (8,880 square miles) in 2024, while the number of households farming rice dropped from 4.66 million in 1970 to 700,000 in 2020, according to Japanese media reports.
- Rice prices may not fall significantly
Masayuki Ogawa, an assistant professor of agricultural economics at Utsunomiya University, told Anadolu that rice prices have been high among wholesalers from the end of last year through May.
Ogawa said that when a product becomes more expensive, consumption decreases; however, rice has a unique place in Japan as a staple product, so consumers are willing to buy expensive rice because demand does not decrease significantly.
He explained that the low-quality harvest, the sharp rise in demand in 2023, and the issues of 2024 resulted in rice price increases, which caused some supermarkets to stop selling.
He noted that rice prices in Japan are somewhat random due to a lack of an established market, so the prices rise exponentially whenever there is a disruption in supply.
He emphasized that the agriculture ministry's decision to sell large amounts of rice from national reserves could be a move to gain popularity ahead of next month's elections, noting that the battle to purchase the 2025 harvest has already begun before harvesting starts.
He added that even if a large volume of rice is harvested this fall, rice prices may not fall significantly.
