Despite Reserve Release Rice Prices Rise as Imports Surge and Expert Debunks 100% Self-Sufficiency

Imported rice: As of the end of January, it’s already at 2.7 times last year’s entire annual amount.

“Japan’s rice self-sufficiency rate is nearly 100%. For the Japanese people, rice is the cornerstone of food security”—so states the Ministry of Agriculture, Forestry and Fisheries’ website.

However, Japan does import rice from overseas.

In 1993, based on the agreement from the General Agreement on Tariffs and Trade (GATT) Uruguay Round, the government decided to partially liberalize rice imports. Since 1995, Japan has accepted duty-free minimum access rice, which refers to a required minimum import volume. The current annual import amount is about 770,000 tons of brown rice.

Moreover, due to rice shortages and soaring prices since last year, rice imports by the private sector—separate from minimum access rice—have also begun to increase.

Even so, can we still definitively say that “Japan’s rice self-sufficiency rate is 100%”?

Kazumichi Oizumi, Professor Emeritus at Miyagi University and an expert in agricultural management, explains:

“Currently, the domestic production of rice for staple food is about 6.8 million tons. If you include rice used for feed and export, the total reaches around 7.8 million tons.

Every year, 770,000 tons of minimum access rice is imported, but only about 100,000 tons of that is for staple food. Since this 100,000 tons of imported staple rice compares to the 6.8 million tons produced domestically, the Ministry of Agriculture likely considers the self-sufficiency rate to be nearly 100%.” (continued, Prof. Oizumi)

On the other hand, rice imported outside of the minimum access quota is subject to a tariff of 341 yen per kilogram, which had previously kept private-sector imports low. However, as domestic rice prices remain high, private imports have surged. In fiscal 2023, the amount imported was 368 tons, but by the end of January in fiscal 2024, it had already reached 991 tons—2.7 times the total for the previous year.

“The trading company Kanematsu has announced plans to import 10,000 tons of U.S.-grown Calrose rice within the year. Even with the 341-yen-per-kilo tariff, if the numbers still work out, I think private companies will continue importing rice on a steady basis.”

400,000 tons still “in short supply” distribution of 2024 rice crop begins

The Ministry of Agriculture, Forestry and Fisheries (MAFF) had stated that once the 2024 rice crop became available, the sense of shortage would be alleviated, and prices would decrease. However, according to MAFF, while the 2024 crop has increased by 18 tons compared to the previous year, the rice secured by major collection organizations, including agricultural cooperatives (JA), by the end of January was 230,000 tons less than the previous year. Why is this the case?

“The background of the shortfall at the agricultural cooperatives is the rice shortage from 2023 and the intensifying competition for collection.

MAFF cited the causes of the 2023 rice shortage as the reduced circulation of first-class rice due to scorching heat causing white immature grains (shirata) and the emergence of stink bugs, as well as increased demand for rice driven by inbound tourism.

However, the crop yield index for rice in 2023 was 101, which is considered normal, meaning the harvest was not poor. While inbound demand did have an impact, the bigger factor was likely the increase in dining out after the end of the COVID-19 pandemic.”

Though the number of inbound visitors in 2023 had recovered to about 80% of pre-pandemic levels, it’s hard to imagine that the consumption was significant enough to cause a rice shortage in Japan.

“The private sector rice inventory, which MAFF oversees, was 1.53 million tons at the end of June last year. Normally, private stocks dwindle during the off-season in August, but by June, stocks were already about 400,000 tons lower than the previous year.

Even with the 1.53 million tons of private inventory, assuming a monthly demand of about 500,000 tons, there shouldn’t have been any issues from July to September. MAFF had also believed that things were fine.”

However, in August last year, when the Japan Meteorological Agency issued the first “Nankai Trough Earthquake Emergency Information,” panic buying of rice began. As a result, what happened to the private rice inventory?

“People rushed to consume rice before the new crop arrived, and by September, they had already eaten into the new rice. As a result, the inventory was 400,000 tons short by the time the new rice started circulating.

By February this year, MAFF announced that 210,000 tons of rice had gone missing. Minister of Agriculture, Forestry and Fisheries Takashi Eto claimed that ‘the distribution is stacked.’ Meanwhile, the shortage of private stocks grew, and by the end of February, it had reached 440,000 tons.”

However, the amount of rice MAFF decided to release from reserves was 210,000 tons.

“Since the shortage is 440,000 tons, it is impossible to meet the demand. Moreover, because the rice is being auctioned at high prices, the sale prices will not decrease as expected. If the price drops by even 10% from the recent average price of 5 kilograms for over 4,000 yen, it would be a good result.”

MAFF should ask rice farmers to increase production, not reduce rice acreage

In Japan, which promotes a self-sufficiency rate of 100% for rice, the scandal that unfolded during the Reiwa era has been attributed by Kazumichi Oizumi to the reduction policy aimed at reducing rice production.

“To maintain rice prices, the Ministry of Agriculture, Forestry and Fisheries (MAFF) has forced farmers to produce rice according to demand for over 50 years. Naturally, if production is limited to meet demand, the production volume decreases. With a declining population and reduced per capita consumption, this results in reduced production.

The reduction policy was supposedly abolished in 2018. However, it was merely replaced with a production guideline, and the reality has not changed.”

To prevent rice prices from falling, agricultural cooperatives (JA) have effectively aligned with the de facto reduction policy without opposing it.

“Currently, there are 550,000 rice farming households nationwide. Under the Democratic Party administration in 2012, there were 1.07 million households, but in just 13 years, this number has been halved.

Now, 60% of rice is produced by large-scale farms, which make up 4% of the 550,000 rice farming households across the country. The remaining 40% is produced by small-scale, part-time farmers who make up 96% of the households.

To prevent rice prices from falling, agricultural cooperatives have been telling farmers to ‘don’t grow rice’ and ‘adjust production.’ During this period, most farmers have become part-time and have left the industry.

Ultimately, in an effort to maintain rice prices, sometimes production levels were set below demand, leading to very tight supply and demand management. As a result, even a slight reduction in distribution caused by heat damage and a slight increase in demand led to a rapid shortage of rice. Furthermore, MAFF failed to release rice from reserves in a timely manner, causing prices to soar and leading to this major crisis.

In times of unstable supply and demand, more relaxed management is necessary. What MAFF should be asking rice farmers to do is not reduce production, but to increase it.”

On March 19, MAFF announced that the planted area for 2025 main crop rice would total 1.282 million hectares, 23,000 hectares (1.8%) more than the 2024 crop. Farmers in 19 prefectures are expected to increase production, with the production volume expected to rise by 100,000 to 120,000 tons.

“Farmers who have been limiting production according to MAFF’s ‘guidelines’ have heard Minister of Agriculture Takashi Eto’s statement that ‘rice production is free’ and have likely decided that they can ignore the guidelines. Farmers have distanced themselves from the views of agricultural cooperatives and MAFF, and there is still a need for more production.”

How does Oizumi view the planted area for 2024, which is expected to be 1.8% higher, at 1.282 million hectares?

“This number is too small. Unless the planted area increases by nearly 10%, rice prices will not decrease.

However, the reality of Japanese agriculture is that the sector is weak, and there are fewer farmers who can expand production. As a result, we are likely to see steady retail prices of around 4,000 yen for 5 kilograms of rice.”

Japan is capable of exporting 6 million tons of rice.

On the 14th, the Ministry of Agriculture, Forestry and Fisheries (MAFF) announced a goal to increase rice exports to approximately 350,000 tons by 2030, nearly eight times the export level in 2024. The aim is to increase production so that, when supply and demand are tight, surplus rice can be directed towards domestic consumption.

“I believe rice can become an export industry. I have continuously advocated stopping the rice reduction policy, increasing production, and expanding exports.

Currently, the main countries in need of rice are Indonesia, the Philippines, and African nations. The demand in Africa is particularly high. However, the total global rice trade volume is only about 8% of the production volume.

If Japan exports rice, raising the global trade share from 8% to 10%, the international rice market will stabilize. This will also contribute to international efforts.”

Is the 350,000 tons target set by MAFF appropriate for exports?

“From the current state of exports, this target feels very ambitious. However, Japan has the potential to produce rice for 6 million tons of exports. Japan has a latent production capacity of 13 million tons. With domestic consumption at 7 million tons, Japan could export the additional 6 million tons to maintain its rice farming industry and, if supply and demand become tight, redirect it for domestic use.

The key now is how to increase exports to 350,000 tons. I hope this doesn’t end as just words.”

If production increases, rice prices will fall. However, international competitiveness will improve as a result.

However, as “the number of farmers who can expand their planting areas is decreasing” (according to Oizumi), are there enough producers in Japan now to cultivate 13 million tons of rice?

“That’s the issue. I mentioned earlier that 60% of Japan’s rice is produced by just 4% of large-scale rice farmers. Some of these farmers have more than 100 hectares of farmland. The starting point is to double the number of such large-scale farmers and have them engage in high-productivity farming. Strengthening their management capabilities is an urgent task.

Large-scale farmers have only emerged in the past 10 years or so. They have incorporated businesses, growing not just rice but also vegetables, engaging in food processing and livestock. Many large agricultural managers are successors of landowners or apprentices, and they are very proactive in revitalizing the local economy.

However, while they see agriculture as a business, they still have some weaknesses. If young agricultural entrepreneurs gain strength and large-scale farming becomes a trend, eventually the 96% of small, part-time farmers will entrust their land to these larger operations.

If the national and local governments shift their focus to scaling up agriculture, increasing added value, and improving productivity, most of the issues related to rice will be solved. This would bring about a major transformation in Japan’s rice farming and agriculture.”

Rice is the staple food of Japan. It would be problematic if we could no longer produce it. The public desires a shift in agricultural policies to strengthen food security.

▼ Kazunuki Oizumi: Agricultural economist and professor emeritus at Miyagi University. Born in 1949 in Miyagi Prefecture, he completed a master’s course in agricultural studies at the University of Tokyo in 1974. He has served as a professor and vice-president at Miyagi University. His books include The Strength of Japanese Agriculture (Yosensha), Hope for Japanese Agriculture (NHK Publishing), and How the Food Value Chain Will Change Japanese Agriculture (Nikkei BP Marketing).