Rice Shortage, Price Increases & Restrictions on Purchase in Stores! Worst case scenario in the 30’s…’The day when we will no longer be self-sufficient in rice’.

Private inventories of rice at the end of June were at the “lowest level” since the statistics began: ……

Something unusual is happening to rice. Some supermarkets have reported a “rice shortage” one after another, with products disappearing from their shelves and requests to limit purchases to “one per person. What is happening?

The Ministry of Agriculture, Forestry and Fisheries (MAFF) releases monthly private-sector rice inventory levels. Private-sector inventories of last year’s rice totaled 1.56 million tons at the end of June of this year, a decrease of 410,000 tons from the same month last year. This is the lowest level since the statistics began in 1999.

This is believed to be due to the fact that abnormal weather conditions have affected the growth of rice, and that consumers are shifting to rice, which has relatively moderate price increases amid soaring food prices across the board. In its explanatory materials, MAFF states that “rice prices rose relatively moderately amid a decline in milled rice yield (lower first-class ratio, etc.) due to high temperatures and drought in last year’s rice crop and the continued rise in overall food prices since September of Reiwa 2021.

Minister of Agriculture, Forestry and Fisheries Tetsushi Sakamoto said at a press conference on August 2,

The ratio of private-sector inventories to annual demand of 7.02 million tons was 22.2%, almost the same level as in 2011 and 2012, and the level of inventories needed before the new rice crop goes on sale has been secured,” he said. We are aware that the inventory level required for the new rice crop is secured,” he said.

He further emphasized, “At this point, the total amount of staple rice is about the same as that of the same period in 2011 and 2012.

We do not consider the overall supply and demand of staple rice to be in a tight situation at this time. We would like to reassure consumers that they can purchase rice as usual.

Nevertheless, why is rice in short supply at retailers, even if only partially? An official from the Agricultural Policy Department of the MAFF Agricultural Produce Bureau said,

The price of rice has risen by 11% in the negotiated trade, and it has also risen by about 10% in stores,” said an official of the Agricultural Produce Policy Department of the MAFF’s Agricultural Produce Bureau.

The price of farm products has gone up by 11%, and in-store prices have also gone up by about 10%. While restaurants are struggling due to the COVID-19 crisis, private-sector inventories “built up considerably” in 2008-2009, he said. Rice production areas responded to the lower prices by increasing production, and the “supply-demand balance tightened” in 2010 and 2011.

It is believed that major supermarkets and other retailers who deal directly with rice producers and wholesalers under annual contracts were able to secure products. On the other hand, MAFF officials believe that new dealers may have found it difficult to procure certain brands of rice, and that higher-than-expected prices may have made it difficult for them to procure the product, which may have led to the shortage of some products in stores.

A “realistic scenario” for the ’30s presented by an industry group is “the worst-case scenario.”

The rice market is undergoing such a drastic change that a serious problem has been raised. Japan’s food security may be in jeopardy.

In March of this year, the National Rice Marketing Business Mutual Aid Cooperative presented its “Rice Distribution 2040 Vision,” which states, “In the worst-case ‘realistic scenario,’ domestic production alone may not be sufficient to meet domestic demand in the ’30s.

According to this realistic scenario, the production of rice in the year 2040 will be only 3.63 million tons compared to the domestic demand of 3.75 million tons, and the number of rice producers is expected to decrease by 65% from the year 2040, to about 300,000.

The number of rice farmers in Japan is aging and there is a lack of successors. There are various circumstances unique to rice production.

Akihiko Hirasawa, a research fellow at the Norinchukin Research Institute, says, “If you can make money from rice, you can make money from rice,

If they can make money from rice, rice farmers will let their families take over the business. Young farmers are farming vegetables, which are profitable. There is no doubt that the number of rice farmers will decrease significantly, and the question is who will take over the rice farming?

He raises the question, “Who will take over the rice farming?

Rice production requires water, labor, and high costs, according to Hirasawa. Rice paddies require water facilities, and in addition to building banks to prevent water leakage and hardening the bottom of the rice paddies, the amount of water must also be managed during cultivation. In addition to dealing with the rice paddies, there is also the work of making seedlings and planting rice. On the other hand, he also said that “vegetables do not use much land,” and that it is enough to sow seeds and water a limited amount of land.

While Japanese farmers manage 2-3 ha, the U.S. farmers manage 200-300 ha… and there is also a trend toward further dispersion.

Mr. Hirasawa points out that “the world’s agricultural competitiveness is determined by land area. The U.S., Australia, and other countries have introduced large machinery and airplanes on vast tracts of land, and they are farming with less human labor and producing at lower cost. Farmers in Japan average 2 to 3 hectares, while farmers in Europe average 20 to 30 hectares, in the U.S. 200 to 300 hectares, and in Australia wheat cultivation amounts to several thousand hectares.

In Japan, “terraced rice paddies” and “terraced fields” are often located on mountain slopes, and narrow, fragmented farmland is often gathered together for use. Even if rice and other grains are produced there, they cannot compete with Europe and the United States in terms of management efficiency.

Furthermore, in Japan, there is a strong tendency for farmland to be dispersed through inheritance, especially in western Japan.

In eastern Japan, land inheritance tends to be concentrated in the hands of the eldest son, while in western Japan, land tends to be divided among everyone in an attempt to make inheritance as equal as possible,” said Akihiko Hirasawa, Executive Research Fellow at the Norinchukin Research Institute.

In other words, Japanese farmers are facing a problem that is weakening their farming operations even more.

He said, “MAFF has been trying to exclude small farmers from subsidies so that they can target larger farmers, but as far as whether these larger farmers have increased their productivity and further expanded the scale of their operations, they haven’t come out as large as expected.”

The Ministry of Agriculture, Forestry, and Fisheries (MAFF) has been implementing such measures for decades, and Mr. Hirasawa questions their cost-effectiveness.

In “Nihon no Rice Mondai” (Japan’s Rice Problem) (Chuko Shinsho), author Shinnyo Ogawa says, “The larger the farmers are, the more they rely on subsidies and the more they produce other things besides rice. On the other hand, small-scale farmers specialize in rice production without relying on subsidies.” The average percentage of agricultural subsidies to total income is 77% for farmers with 20 or more hectares, compared to 0.6% for farmers with less than 0.5 hectares.

Not enough farmland, but a surplus of rice paddies?

Rice has been Japan’s only major food source, but the country may no longer be self-sufficient in rice. From the perspective of food security, Mr. Hirasawa sounds the alarm. He points out that Japan has responded to post-World War II food shortages with imports and increased rice production, and sees the need to maintain a minimum level of domestic production to avoid the risk of large-scale food imports.

In fact, the weakening of the management base of rice production has become an urgent issue for Japan’s food security. Japan has been dependent on grain imports from the U.S., but in the early 1970s the U.S. temporarily suspended soybean exports and indicated that it might also restrict corn exports. Around this time, the term “food security” began to be used.

Demand for rice has been stagnant due to a declining population and diversifying diets, and even if there are rice fields, they are no longer available and there is no one to cultivate them. Japan is in a strange situation: there is not enough farmland, but there is a surplus of rice paddies. There is not enough money,” Hirasawa said, explaining that there are two ways to solve this problem.

One is to raise the price of rice to match the cost of production. However, in that case, a shift in demand to cheaper imports and wheat is expected, and Hirasawa says, ” Raising the price of a staple food goes against the welfare of the people.

Another solution is to make better use of subsidies. Hirasawa advocates a policy of “compensating farmers’ income with direct payments” and believes that consumers should be encouraged to support the maintenance of farmland with subsidies for food security. He stresses the importance of “direct payments” to rice farmers.

He said, “Instead of increasing the current subsidies, we must ensure that the right crop is grown in the right place. Otherwise, we will only make them even less efficient.”

In Japan, major policies include a major increase in defense spending and expansion of childcare support. Although a low-profile presence in the background, once abnormal weather or regional conflicts make imports difficult to obtain, food security will become a matter of life and death for Japan, just as it is for energy and other resources. In addition to its main constituent carbohydrate, rice contains protein, calcium, minerals, vitamins, and dietary fiber, and there is nothing more nutritious than rice. We can at least try to use our wisdom to ensure that Japan can continue to be self-sufficient in rice alone.