JAPAN´S RICE CRISIS / GEOPOLITICAL FUTURES

Japan’s Rice Crisis

Food security is the backbone of a stable, peaceful society.

By: Victoria Herczegh

Japan’s Ministry of Agriculture, Forestry and Fisheries recently announced it would release 210,000 tons of rice from its stockpile of 1.1 million tons to tackle the extremely high price of the country’s top food staple. 

The announcement was quickly followed by another that promised to expedite the release, which had originally been slated for no earlier than late March. 

Clearly, this has become a politically urgent issue for the government in Tokyo. 

Not since the Fukushima nuclear disaster nearly 14 years ago have rice prices been this high. 

And there is evidence to suggest they will be harder to bring down this time around.

To be sure, the fluctuation of rice prices is a problem familiar to many Asian nations. 

Over the past few years, factors such as extreme weather conditions, limited water and arable land, rising production costs, and outdated and inefficient agricultural practices have transformed a once nagging issue into a broader regional crisis. 

In Thailand, the world’s second-largest rice exporter, crop yields dropped by 3-6 percent between 2023 and 2024, driving already high prices higher still. 

And as prices reach a whopping $400 per ton in India, the world’s largest exporter, Vietnamese rice has now become the most affordable alternative. 

India's ban on exports of non-basmati rice in August 2023 further heightened food insecurity in Southeast Asia, where some countries rely on Indian rice exports for more than 40 percent of their supplies. 

In the Philippines, a major rice producer, imports reached a record 4.7 million metric tons in 2024 – a 30 percent increase from the previous year. 

After prices surged by about 20 percent, the government declared a food security emergency and pledged to disburse half of its 300,000 metric ton reserves to citizens.

As for Japan, the increase in rice prices in the second half of 2024 was due to a shortage caused by the harsh summer weather conditions. 

But unlike in previous years, when prices normalized after new fall harvests, this time prices remained high well into the winter. 

The latest average retail price of a 5-kilogram (11-pound) bag of Japanese rice, according to a government survey conducted in January, was 3,688 yen (roughly $25), up from just over 2,000 yen last year. 

According to the Ministry of Agriculture, Forestry and Fisheries, the main reason for the persistently elevated prices is the fluctuation in supply, demand and pricing – even a small increase in demand boosted partly by tourists flocking in during the summer, when shortages are already fairly normal, can cause prices to skyrocket. 

The fact that prices did not drop after the harvest can be attributed to both speculation among businesses and the reluctance of farmers to sell the usual amount to retailers, hoping for further price spikes.

The resultant rise in prices now threatens national living standards, especially for low-income households. 

One of the main reasons for this prolonged crisis is that in Japan, demand for rice is out of sync with current consumption trends. 

Annual rice consumption fell from 118 kilograms per capita in 1962 to 51 kilograms in 2022. 

Since the early 1970s, the leadership has implemented measures to restrict rice production to maintain the price, which caused production to decrease from 14.3 million tons in 1967 to 7.3 million tons in 2022. 

The amount of farmland used for rice shrank by nearly 20 percent over the past decade. 

Reducing the rice market through production adjustments led to a substantial disruption in supply.

Moreover, Japan is ill-prepared for extreme weather conditions. 

Heat-resistant rice varieties account for only about 15 percent of total rice planted. 

In Niigata, a prefecture known for its rice production, the percentage of top-grade rice fell to about 5 percent of total output; in the same area, the output of top-grade rice is usually above 80 percent. 

Another issue is that rice farmers are aging. 

Some 90 percent of them are now 60 or older. 

Without putting farmland into the hands of ambitious younger farmers, production will continue to decline, and this could lead to a prolonged price issue.

Though high rice prices may benefit distributors, producers and agricultural cooperatives in the short term, they can threaten the long-term livelihoods of the less wealthy, especially Japan’s elderly, for whom rice continues to be the number one staple. 

Tokyo’s releasing of its stockpiles, while necessary, created a rash of panic buying and overall confusion among retailers and distributors. 

Tokyo understands it should have done it earlier, but it also understands that complicated government intervention can affect the stability of rice production and producers' earnings in the longer term. 

To mitigate that risk, the government has to buy back the same amount of rice it released within a year. 

Prime Minister Shigeru Ishiba’s Cabinet was created only last October, and he probably didn’t want its first action to be an emergency response to an agricultural crisis. 

Instead, he focused on building security relationships for Japan, delaying the solution to the rice problem and hoping prices would drop back down on their own.

While Ishiba’s political support base appears to be slowly growing, long-term support may elude him if he can’t get a handle on rice prices. 

Even if consumption falls, production and harvesting are ingrained in the nation’s culture and daily life, and rice will continue to be a staple food for many. 

The bottom line is that food security, even in advanced, mature economies, is the backbone of a stable, peaceful society.