A rice market full of demons. by former-reporter of Kyodo News, Takezumi Ban.
Around 1994-1995, when I was in charge of the Ministry of Agriculture, Forestry and Fisheries as a reporter, Japan’s rice production was said to be 10 million tons. Demand was also around 10 million tons. Production in 2024 fell to 6.79 million tons, but an amount exceeding demand has been secured. Despite this, rice shortages have occurred since the summer. Rice has disappeared from the market, and prices have soared. The price, which was around 2,000 yen for 5 kg, is now over 4,000 yen. This would not have happened unless someone hoarded it somewhere. In 1993, the rice crop index for Japan was 74, and there was no rice reserve system, so the government made an emergency import of rice. Then, in June of the following year, “rice started to come out” (major wholesalers). Traders who had been hiding rice before the new rice season released it.
Japan’s rice market has become almost full of demons. Although Japan should have enough rice for staple food, it is forced to import rice. Under the Minimum Access system introduced in the Uruguay Round negotiations of the General Agreement on Tariffs and Trade (GATT) agreed upon in 1993, Japan has committed to importing 8% of its demand from the United States, Thailand, and other countries. It has dutifully kept this promise from more than 30 years ago. The government imports and manages this rice in bulk, and there are about 770,000 tons per year, which are mainly used for processed foods such as miso, shochu, and rice crackers, as well as for feed and overseas aid. This rice is tax-free, but when it is sold for processing, it is released at the domestic level, so the profit margin that goes to the Ministry of Agriculture, Forestry and Fisheries is enormous.
The Food Control Law was abolished in 1995, and rice sales were liberalized. In 2000, the ban on private rice imports was lifted, and the price for imports outside the Minimum Access rice framework was set at 341 yen per kilogram. In terms of tariff rate, it was a high tariff of 700%. Anyone can freely import rice into Japan if they pay the tariff, but if they pay a 700% tariff, even Thai rice will be more expensive than domestically produced rice, so unless something extraordinary happens, no one will import it. It’s a system that is truly incomprehensible.
On the other hand, as the price gap between domestic and foreign rice prices narrows, the government created a rice export subsidy. If rice is certified as new market development rice (rice with new demand for new markets), a subsidy of 40,000 yen per 10 ares can be received for paddy field renovation projects, so rice exports have increased sharply in recent years. This system is separate from domestic staple rice, and domestic distribution is strictly prohibited. Even with this Japanese export rice, a strange phenomenon is occurring. Although the price is soaring in Japan due to a rice shortage, the price of Japanese rice sold in stores in California is cheaper. Rice is not colored, so if there is export capacity and the domestic price is more advantageous, it should be distributed domestically, but the Ministry of Agriculture, Forestry and Fisheries stubbornly does not allow it.
The government has set aside about 1 million tons of rice for emergencies. Some of it is provided free of charge to children’s cafeterias, home-delivered meals for children, food banks, and for school lunches, and stockpiled rice that is more than five years old is sold for use as animal feed. There is also feed rice. Rice grown for pigs and other animals is also eligible for subsidies, separate from food. It is not old stockpiled rice, and it does not taste bad, so if there really was a shortage, it would not be surprising if it became our food.