Rice prices show no sign of stopping their climb. On the 26th, the Ministry of Agriculture, Forestry and Fisheries announced that the average retail price for 5 kilograms of rice had reached 4,285 yen — once again setting a record high since the ministry began tracking prices in March 2022.
In response, Minister of Agriculture, Forestry and Fisheries, Shinjiro Koizumi, unveiled a new system for releasing reserve rice stocks in an effort to curb the soaring prices. He firmly stated that by early June, we’ll be able to line up reserve rice priced around 2,000 yen per 5 kilograms in stores.
To act swiftly, the government has switched from its conventional competitive bidding system for selling reserve rice to a “negotiated contract” system, launching direct sales to major retailers — including online shopping platforms handling over 10,000 tons of rice per year.
<figure id="attachment_426391" class="wp-caption alignnone" style="width: 4680px;" aria-describedby="caption-attachment-426391"><a href="#" data-ident_hash="11a52d44"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2025/05/085e8fc4da093a8b25086b21bbd05b3a.jpg" alt=""></a><figcaption id="caption-attachment-426391" class="wp-caption-text">On the 21st, newly appointed Minister of Agriculture, Forestry and Fisheries Shinjiro Koizumi told reporters at the entrance of the Prime Minister’s Office, “With the mindset of being the ‘Minister in charge of rice,’ I want to focus and work diligently.”</figcaption></figure>
“I was surprised by the 2000-yen figure. I have half expectations and half concerns about Minister Koizumi,”
Said Kazunori Oizumi, professor emeritus at Miyagi University, who specializes in agricultural management.
However, the 2000-yen store price applies only to the stockpiled rice sold through the discretionary contracts. It does not apply to the total 310,000 tons of stockpiled rice released in the previous three auctions.
 
<h3>The reason why the previous stockpiled rice was sold to JA Zen-Noh</h3>
Until now, in competitive bidding, stockpiled rice has been sold to the collection company that offered the highest price. This bidding method has been pointed out as one of the reasons for the high price of the stockpiled rice.
In the three competitive bids held, JA Zen-Noh (the National Federation of Agricultural Cooperative Associations) won 90% of the stockpiled rice. While this was likely because they offered the highest price, the monopoly held by JA Zen-Noh raises questions of “Why?”
“Last year, due to a shortage of 2023 rice and intensified competition in rice collection, JA’s collected volume was 210,000 tons less than the previous year. As a result, both their sales amount and commission fees decreased. I think it’s reasonable to consider that the government sold stockpiled rice to compensate for JA’s revenue shortfall from that 210,000-ton decrease.
Moreover, the bids for the stockpiled rice came with the condition that the same quality and quantity of rice must be repurchased within one year in principle. Only JA could meet the government’s repurchase requirements. Wholesalers cannot.
For these two reasons, most of the stockpiled rice ended up in the hands of Zen-Noh. There was probably also influence from the Liberal Democratic Party since farmers are an important voting base for the party.”
On the 23rd, JA Zen-Noh announced that out of the 199,000 tons of stockpiled rice they won in the March auction, they had shipped 103,753 tons to wholesalers as of the 22nd. This accounts for 52% of the total amount they won.
However, according to a survey released by the Ministry of Agriculture, Forestry and Fisheries on the 20th, out of approximately 210,000 tons of stockpiled rice won in March, only about 14,998 tons (about 7%) had been sold from the collection agencies through wholesalers to retailers by April 27.
“The stockpiled rice is experiencing a bottleneck. The cause is a failure in agricultural policy.
Currently, JA Zen-Noh handles only about 30% of the rice distribution volume. Since they have their own rice milling plant called Zen-Noh Pearl Rice, their dealings with other wholesalers are limited. Because the rice is sold mainly to JA Zen-Noh, a bottleneck has occurred.
In the rice distribution process, it is the wholesalers who handle milling and packaging such as bagging. If the goal was to speed up the distribution of stockpiled rice, it would have been better to sell it to wholesaler groups and have them distribute it to retail stores. However, the Ministry of Agriculture, Forestry and Fisheries has instead made wholesalers the scapegoats, accusing them of making several times the profits they did last year.”
According to the Ministry of Agriculture, Forestry and Fisheries, the additional costs and profits that wholesalers add when selling to retailers during the distribution of stockpiled rice are 1.6 to 3.4 times higher than those in the normal rice distribution process.
“It’s also possible that profits have increased due to the rise in rice prices. I don’t quite understand what the Ministry of Agriculture, Forestry and Fisheries intends with their announcement, but the distribution process has become more complicated, and rice milling factories have become larger-scale, so the actual costs for wholesalers have gone up. Blaming the wholesalers like this might be one of the causes of the bottleneck.”
<div data-friday-nextpage-lead="Brand-name rice remains expensive."></div>
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There are also criticisms that the bottleneck in distribution is causing rice prices to remain high.
“For the agriculture policy triangle of politics, bureaucracy, and industry—namely the Liberal Democratic Party, the Ministry of Agriculture, Forestry and Fisheries, and agricultural organizations (JA)—the biggest challenge is raising rice prices. The current high rice prices are not necessarily bad for the agricultural faction or JA.
JA Zenchu (National Federation of Agricultural Cooperative Associations) Chairman Toru Yamano said that he does not think the current rice prices are particularly high. In other words, a price of about 4,200 yen per 5-kilogram bag is considered an appropriate price by JA and the agricultural faction.”
Before rice prices rose, around last spring, the average price for a 5-kilogram bag was about 2,000 yen. Professor Oizumi, an emeritus professor, considers what price to be appropriate?
“It would be somewhere between 3,000 and 3,500 yen.
Speaking from the perspective of wanting to expand Japan’s rice farming industry, one key point is to prevent domestic consumers from turning away from rice. Also, rice prices need to stay at a level that prevents imported rice from entering the market. Taking these into account, I believe a fair price would be in the low 3,000 yen range.”
<figure id="attachment_426392" class="wp-caption alignnone" style="width: 6720px;" aria-describedby="caption-attachment-426392"><a href="#" data-ident_hash="11ef7f2d"><img src="https://res.cloudinary.com/fridaydigital/image/private/t_article_image/wpmedia/2025/05/a3c5943817a7f056ebccc89bb114ebc5.jpg" alt=""></a><figcaption id="caption-attachment-426392" class="wp-caption-text">Because collection agents and trading companies have already offered high purchase prices to rice farmers, there is little chance that the retail price of this year&#8217;s new rice will decrease.</figcaption></figure>
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<h3>In the end, rice prices will remain high until 2026. Brand-name rice will stay expensive</h3>
The rise in rice prices actually began last summer. The triggers were ongoing rice shortages since 2023 and panic buying caused by the announcement of the &#8220;Nankai Trough Earthquake Emergency Information.&#8221;
&#8220;The rice shortage originally started with the price drop of the 2020 rice crop. In response, the Ministry of Agriculture, Forestry and Fisheries (MAFF) panicked and, due to decreased demand during the COVID-19 pandemic, doubled the usual production adjustment from a 100,000-ton reduction in 2021 to a 200,000-ton reduction. Another 200,000-ton cut followed in 2022, totaling a 300,000-ton effective decrease. To maintain rice prices, they cut production by 500,000 tons over two years.
While the shortage didn’t immediately show during the pandemic, once the pandemic eased and demand returned along with damage from heat, production fell, making the shortage apparent from summer 2023 onward.
When a rice shortage hits, prices inevitably rise, and that’s unavoidable.&#8221;
The price surge was thus a failure of agricultural policy.
&#8220;Maintaining rice prices is the mission of pro-agriculture politicians and MAFF bureaucrats. It’s no surprise if they intentionally reduce production to raise prices.&#8221;
Prime Minister Shigeru Ishiba stated on March 21 during a Diet debate that the average price per 5 kg bag must be in the 3000 yen range and that prices must not reach the 4000 yen range. He added he aimed to achieve this as soon as possible.
However, even if the rice released under discretionary contracts from the 2021 and 2022 reserves hit store shelves at around 2000 yen, it will not bring down overall rice prices.
&#8220;To lower rice prices, three urgent measures are needed: first, increase rice distribution volume to push prices down; second, suspend current production controls and boost output; and third, increase the number of cost-efficient farmers capable of expanding production cheaply.
Minister Koizumi should focus solely on increasing rice distribution. The 500,000 to 600,000 tons of rice currently held domestically—including reserve rice, minimum import quota rice, and rice from land conversion—should be released all at once into the market and circulated through supermarkets and retailers.
If combined with increased production, retail prices might drop below an average of 3500 yen by year-end or next year. However, branded rice will likely remain expensive.&#8221;
Price drops for this year’s new rice are also unlikely.
&#8220;When JA Group collects rice, they pay farmers an advance called the estimated payment. For example, JA Zen-Noh Niigata has already presented estimated payments for the 2025 crop to JA offices in the prefecture. The goal for regular Koshihikari rice is about 26,000 yen per 60 kg.
Other collection agencies are also starting to contract at 30,000 or 40,000 yen per 60 kg directly with producers. Unless someone takes a loss, the new rice prices won’t come down this year.&#8221;
Nevertheless, if reserve rice priced around 2000 yen reaches supermarket shelves, it may have a psychological effect of raising consumer expectations, according to Professor Kazunuki Oizumi.
&#8220;This year is expected to be a bumper crop. The harvest of staple rice in 2025 might increase by about 400,000 tons compared to last year, which will also help.
Rice handled by JA will remain expensive, but rice contracted by other companies might become cheaper—or possibly more expensive.
There will be three price levels in stores: brand-name rice around 4000 yen, this year’s new rice, reserve rice released via auction in the 3000 yen range, and reserve rice sold under discretionary contracts in the 2000 yen range. It remains to be seen which rice will become the price leader.
In any case, until the 2026 crop arrives, branded rice prices will likely remain high or even rise.&#8221;
A public opinion poll conducted by Nikkei and TV Tokyo from May 23 to 25 showed 65% of respondents had expectations for Minister Koizumi, while 31% did not.
&#8220;The summer 2025 Upper House election might coincide with a period of rice price concerns. Minister Koizumi should set a goal to release all rice stocks in Japan and bring the 5-kg bag price below 3500 yen by year-end or early next year.
If he appeals, saying &#8216;I will do whatever it takes, with everyone’s wisdom, to lower rice prices with unwavering determination,&#8217; he might navigate the election amid rice price issues.&#8221;
Kazunuki Oizumi
Agricultural economist and Professor Emeritus at Miyagi University. Born in Miyagi Prefecture in 1949. Completed master’s in agriculture at the University of Tokyo in 1974. Former professor and vice president at Miyagi University. Author of books including Japan’s Agricultural Strength (Yosensha), Theory of Hope for Japanese Agriculture (NHK Publishing), and How Food Value Chains Change Japanese Agriculture (Nikkei BP Marketing).
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 Sayuri Saito

 Afro

 I am half hopeful and half concerned about Minister Koizumi," said Michiharu Oizumi, professor emeritus at Miyagi University. However, even if stockpiled rice released under a voluntary contract is priced at the 2,000-yen level, it does not mean that the price of rice as a whole will fall.

Rice Prices Set to Stay High Until Next Year’s Harvest as Market Polarization Deepens

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