Decision of Releasing Rice Reserve

Receiving growing public frustration on shortage and high price of the staple diet of Japan, Ministry of Agriculture, Forestry and Fisheries, decided to change the policy on rice. While it has kept a strict rule that the reserve would be released only in the time of poor harvest, new rule enables the government to do it when rice trade in the market is disturbed. The decision revealed a part of inflexibility in bureaucracy of Japan.

The government of Japan reserves certain amount of rice to be ready for famine. The amount the reserve is regularly 1 million metric tons, which can deal with poor harvest in two consecutive years. The government renews the reserve by purchasing about two hundred thousand tons of rice every year. The rice will be sold as forage after it is stocked for five years.

 

Rice harvest in Japan was remained in low level in 2023 and 2024, damaged by high temperature in the summer. It is estimated that wholesale buyers bought large amount of rice with speculation of high price last year. A temporary information of Nankai Trough great earthquake in last August urged each household to stock rice preparing for emergency caused by natural disaster.

 

Consumer price index (CPI) of rice in Tokyo Metropolitan District in January 2025 was 70.7 percent higher than the same month of the previous year, marking new record for four consecutive months. The Bank of Japan realized in its outlook in January a high CPI in FY 2024 and 2025, caused by rise of rice price. Frustration of the people is accumulated to a level that is dubbed as “Rice Riot in Reiwa Era,” resembling it to a large-scale riot spread to all over Japan in 1918.

 

The agriculture ministry decided to revise basic plan for stable supply of rice, by which the minister can order releasing reserved rice when smooth distribution is disturbed. When the rice is released due to rice shortage, the government will buy back the same quality and quantity of rice within a year to avoid rice price being kept low for a long time.

 

In the discussion of Committee for Budget in the House of Representatives, Minister of Agriculture, Forestry and Fisheries, Taku Eto, admitted that rice price was in an unusual condition. Wholesalers of rice have been expecting higher price even after the harvest in 2024 was reported as relatively good. Farmers also kept their crop preparing for rice shortage. It is estimated that 170 thousand tons of rice have disappeared from the market and is still missing.

 

Although the shortage of rice was expected to be eased by the fall of 2024, the price of rice did not decline. It is likely that the decision of releasing the reserve was too late. The government has been careful in intervening in the rice market, since it increased fiscal deficit by purchasing large amount of rice to maintain rice price under post-war food control policy. It is demand of farmers, wholesalers and consumers that the government takes appropriate measures in timely manner.

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