“It’s as if six billion bowls of rice went missing.”
What’s happening with rice? Its price is a raging fever. Five kilograms of Niigata Koshihikari brand sold for 2,490 yen last May, 3,285 yen in September, 4,185 yen in January. Other brands: similar – the sharpest spike since 1975.
Strange: Farm ministry figures show 180,000 tons more rice harvested last year than the year before, yet 210,000 fewer tons shipped. The missing 390,000 tons would fill 6 billion bowls.
“We’ve caught the hidden rice criminals,” claims Shukan Post (Feb 28 – March 7). Who are they?
Are they in fact criminals? If so, capitalism itself is criminal. If “criminal” means breaking the law, they seem innocent. If it means morally reprehensible, it becomes a matter of individual judgment. Against them the case is: their activities certainly are driving up rice prices – high enough to pinch many a household and make of Japan’s staple food a luxury indulgence. Counsel for the defense would say yes, but if society as we know it can be narrowed down to one single defining pursuit, it is the pursuit of wealth; if to one single defining excellence, it is shrewd, even wily entrepreneurial initiative.
Alarmed, the government announced in February the release in March of 210,000 tons of stockpiled rice. The mere announcement would ease the fever.
But it didn’t. Nor will the actual release, Shukan Post fears. It’s too late, it says, for quick fixes. Maybe even for fundamental reform. Reform what, how? A shrinking, aging rural population leaves more and more farm acreage uncultivated. Food can be imported, up to a point, but able young farmers are a dearth less easily supplied.
An unnamed Tohoku farmer the magazine speaks to recalls his surprise last summer at the plethora of approaches made to him by entrepreneurs unknown to him: “Sell us your rice, we’ll pay more for it than JA.” JA is the National Federation of Agricultural Cooperatives, the world’s oldest, with roots deep in the 19th century. Traditionally, farmers sell their produce to it and it sells to retailers. Outside dealers have been challenging JA’s monopoly for decades, but here was a flurry of activity on an unprecedented scale.
“These were people,” the farmer says, “who’d had no prior involvement with rice or with farming.” Among them were textile manufacturers, clothing dealers, venture capitalists and speculators, seeking opportunities for expansion, playing the “money game,” buying now, holding till prices rise, creating an artificial shortage, then selling at a profit when the time seems ripe. In agricultural terms, they plant their seeds and harvest their crop. If they pocket their riches at society’s expense, so do many other businesses.
“I don’t deal with them because I value my relationship with JA,” says the Tohoku farmer, “but I’d certainly earn more if I did.”
“Like masks during the COVID-19 crisis” – when supply fell behind a surging demand – “I’ve seen rice trading on flea market sites,” says an unnamed IT journalist – “along with clothing and computer game devices.” Here a kilogram of rice goes for 5000 yen, as astonishing price which the shortage must be driving some consumers to pay.
The release of stockpiled rice later this month will likely ease things temporarily without solving what most needs to be solved and perhaps cannot be. “In the past 10 years,” says rice market analyst Yasushi Tsunemoto, “20 percent of Japan’s rice land has gone out of cultivation.” Farmers are aging and retiring. Their children, overwhelmingly, pursue other career options. “Without fundamental reforms like integrating farmland and recruiting young cultivators,” Tsunemoto continues, “rice prices will keep soaring.”
He identifies the impasse. The fact that he suggests no way out of it is surely significant. Maybe it means there is none.
© Japan Today
22 Comments
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SomeWeeb
So the problem is an unfair rice monopoly kept the price low for a long time and everyone got used to it. That's what I read from this. It's like how corn is subsidized in the US.
dbsaiya
Establish an Emergency Board composed of representatives from the farmers' union or collective, the Ministry of Agriculture, Consumer Protection (NCAC), and CAA (Consumer Affairs Agency).
Determine Fair Pricing: Calculate the base production cost for farmers, ensuring a reasonable profit margin.
Eliminate JA as an intermediary.
Streamline Distribution: Engage the Retailers Association to determine the cost of collection, storage, and distribution to stores. Ensure only registered retailers are authorized to sell rice.
Implement Price Controls; Cap retail prices to prevent market manipulation and price gouging.
Address Labor Shortages; If domestic labor is insufficient, offer competitive wages and facilitate the immigration of skilled agricultural workers from Southeast Asia, where rice cultivation expertise is abundant.
This approach ensures fair compensation for farmers, eliminates unnecessary middlemen, stabilizes consumer prices, and secures the future of domestic rice production.
If JA resists the changes, regulate their profit margins within acceptable limits as determined by NCAC and CAA to prevent unfair pricing and excessive markups.
Run the cost analysis and make it public.
Laguna
California rice is delicious.
YeahRight
Rice is rice. Start the imports.
deanzaZZR
California produces more rice than I imagined. California grows about 2 million tons a year. Japan grows 7 million tons. I think California could export some of the higher quality Japonica rice to Japan to help out and Arkansas and Louisiana could pick up the slack as most Americans think "rice is rice".
wallace
Japan imports 700,000 tons of rice duty free. 50% of that is US rice.
deanzaZZR
And it's inferior grade rice mostly used for rice crackers or even sent out of the country as foreign aid.
Hello Kitty 321
@SomeWeebT
The price of rice in Japan has never been low, compared to other countries
HopeSpringsEternal
Nobody wants to actually farm, clearly industry needs to automate rapidly as hundreds of Japan's farmers die DAILY, as they're practically old as the dirt itself!
Classic doom loop of a long-term secular trend of growing shortages of workers and investment damaging supply and fueling a pricing bubble attracting speculators. Which the Govt. like to a point = $Taxes!!!
Meanwhile an aging shrinking population eats less and less rice every year = Only in Japan!
Express sister
Correct.
K3PO
In this article you have "capital is the criminal" alongside the JA cooperative monopoly.
Easy to pick where the problem lies.
mikeylikesit
The JA collective and government tariffs on rice imports have kept prices on rice in Japan artificially high for decades. This has allowed Japanese farms to remain mostly small, family-run operations. They have not industrialized and operate more on a market garden scale compared to farms in other industrialized countries.
The average farmer’s age is now mid-60s, and, as the article notes, 20 percent of rice fields have gone fallow in the past decade because no one is there to work them anymore. Families resist selling the land, and, unless the land is in an urban area, buyers are few. Not many people want to farm.
Enter into this situation financiers who are circumventing JA and offering even higher prices. They see that prices will rise, and their purchasing and stockpiling drives up prices even faster. They aren’t acting illegally per se, but they aren’t interested in keeping Japan fed, nor do they have public interests at heart.
So it is quite a different situation from the U.S., where corn subsidies go to large-scale farm corporations, who turn corn into ethanol to add to fuel, which, ironically, costs more in gasoline to produce than it actually saves. America keeps prices artificially low and diverts food to the petroleum industry. Japan keeps prices artificially high and avoids industrializing.
garymalmgren
RE: So the problem is an unfair rice monopoly kept the price low for a long time and everyone got used to it.
No That is not correct.
Did you read the article?
A gaggle of entrepreneurs bought up as much as they could and withheld it from the normal market.
This created a shortage which led to the current price spike.
So unfair business practices jacked up the prices.
The government should flood the market with their stored rice and force the price down so these carpetbaggers get burnt!
wallace
Large-scale rice hoarding by unauthorized dealers needs to be cracked down on. Follow the money.
falseflagsteve
I like Basmati the most, yummy.
Express sister
This isn’t difficult. Capitalism is bad and wrong. Socialism is cool and good.
Express sister
Alas. Those stockpiles are for emergencies. Regular people starving isn’t an emergency under capitalism.
DavidK
Why aren't the government allowing foreign imports of rice if they're stockpiling Japan grown rice for emergencies or whatever reason? That's right, something is fishy and the Japanese government is behind it if they're blocking foreign rice imports from the USA, Taiwan and other countries because why should they care about that as long as their precious rice isn't being depleted by foreign visitors to Japan? Since rice is about the only thing Japan grows as they import most of their food, this predatory riceflation is ridiculous. They're just making fools of themselves!!!
HopeSpringsEternal
Usually, the financial speculators prefer to buy futures and options, rather than the physical asset itself.
JA "monopoly" is likely the real reason this market is disorderly, more buyers = more competition = good idea
One most remember that real assets have been steadily appreciating for years against all currencies, due to Covid, Global Proxy Wars and historic Central Bank Money printing all destroying confidence in currencies.
Rice and the yen are not immune to above global reality
ian
In myanmar a Japanese was convicted of rice price gouging. Should have remained and grew his business here
BorisM
Check out how it's working in Venezuela and Cuba. You'll be most impressed.
GillislowTier
You mean causing panic induced inflation by mentioning theories about a natural disaster then attempting to reduce it with more theories about using emergency stock causing a run on a product making a common daily item leading to record profits for the producers didn’t make them reduce price later when you realized it was a lot of false narrative and bad publicity?
gee wonder why this is happening.
when prices go up, they stay up as long as possible. The rice producers got to jump prices without extra labor or added value. These people are going to retire beautifully and I can’t knock the hustle.