Why rice prices have never gone down… Former MAFF Bureaucrat Accuses “Dark Side of Agricultural Policy and JA’s 107 Trillion Yen Money

The “policy of reducing rice acreage” in exile

The “Reiwa rice riots” occurred in the summer of Reiwa, 2042. The average sales price per 5 kg of rice from December 29, 2011 to January 4, 2014 hit a record high of 4,416 yen, and prices in supermarkets have remained high. This phenomenon cannot be dismissed as simply high prices. This phenomenon is not simply a matter of high prices; it is a danger to the food safety of the Japanese people.

Kazuhito Yamashita, a former career bureaucrat at the Ministry of Agriculture, Forestry, and Fisheries (MAFF) and currently a senior researcher at the Canon Institute for Global Studies, sounds the alarm about the “crisis in Japan” that lies behind the price hikes.

If Japan’s sea lanes are destroyed in an emergency, the nation will starve to death in less than six months under Japan’s current production system,” he said.

Behind the “food security” that the Ministry of Agriculture, Forestry, and Fisheries (MAFF) and politicians are shouting so loudly is hidden a huge interest that takes precedence over the lives of the Japanese people. A former MAFF bureaucrat reveals the deep darkness of agricultural policy and the true nature of JA Bank’s “107 trillion yen money” (statements in parentheses are those of Mr. Yamashita).

The MAFF cries ‘food security,’ but what they are doing is the exact opposite. For about 50 years, they have been pursuing a policy of reducing the amount of rice produced by giving subsidies to farmers. This is a policy of pariahdom.”

Japan’s food self-sufficiency rate on a calorie basis is only 38%. If the sea lanes are blocked, wheat and feed grains for livestock farming will not come in. The supply of beef and pork would also cease, and the Japanese would have no choice but to return to a “rice-centered” diet, as was the case during the war. How much rice will be necessary for the survival of the entire population?

The wartime ration standard was 2.3 cups of rice per person per day, or five bowls of rice. In today’s saturated food world, few people eat this much rice, but in the absence of side dishes, the only way to consume calories is through rice. With today’s population of 125 million, that would require 16 million tons of rice per year.

However, as a result of the long-standing policy of reducing rice acreage, the current production of rice for staple food is only about 7 million tons.

The moment imports stop, there will be a physical shortage of food, and cutting into the stockpile of rice, which is only 1 million tons, will be a drop in the bucket. Within six months, there will be people starving to death. This is the true nature of the “food security” promoted by the Ministry of Agriculture, Forestry and Fisheries.

So, how can the current situation be resolved? Yamashita proposes “abolition of rice reduction” and “expansion of exports” as solutions.

We should steer the ship toward increased production and exports.

If we fully utilize Japan’s rice paddies, we can produce 17 million tons. During normal times, 7 million tons should be consumed domestically, and the remaining 10 million tons should be exported overseas. In this way, agriculture will become a growth industry that earns foreign currency. Then, in the event of an emergency, exports could be halted and the production could be used domestically. More than 16 million tons of food can be secured immediately.”

The idea is to secure food supplies in times of emergency by using exports as a “valve” in times of peace. Yamashita responds to concerns about whether expensive Japanese rice can be sold overseas.

If the reduction of rice acreage is abolished and the price of rice falls, small-scale farmers with high costs will stop production and shift to renting out their land to earn rental income. As a result, if farmland is concentrated among motivated professional farmers, ‘economies of scale’ (the phenomenon that the cost of production per unit of production decreases as the scale of production increases) will come into play, and production costs will drop dramatically. Even now, the cost of a farm of more than 30 hectares is one-third that of a farm of less than one hectare.

The policy of reducing rice acreage also suppressed breeding that would have increased yield per farmland area. Today, the yield per farmland area has overtaken that of China, which 75 years ago was only half that of Japan, and is now 1.7 times higher than that of California, which was about the same. Conversely, if rice with a yield comparable to California’s could be planted, it could be grown more than 40% cheaper. In terms of quality, Japanese rice has the potential to dominate the world market if only the price difference can be narrowed.

If agriculture becomes independent as an export industry, it will lead to the “strongest stockpile.

The Ministry of Agriculture, Forestry and Fisheries is spending 50 billion yen of taxpayers’ money to build up 200,000 tons of stockpiled rice. If my proposal is adopted, we can have a huge stockpile of 10 million tons without using taxpayer money. In terms of protecting the lives of the people, which is more rational is clearer than fire.”

From both food security and economic perspectives, it is clear that “increasing production and exporting” is rational. Nevertheless, why is the policy of reducing rice acreage being maintained and why is the price of rice being driven higher? Yamashita explains that the problem lies in the profit structure of JA (Japanese Agricultural Cooperatives).

Huge amount of JA money

JA agricultural cooperatives do not want to protect the rice market, which is only about 1.5 trillion yen, or agriculture, which is about 9 trillion yen. What they want to protect is the “107 trillion yen in savings” deposited in JA Bank.

The overwhelming majority of JA Bank’s depositors are engaged in agriculture. They are not full-time farmers who make a living only from farming, but “dual-income farmers” who work as company employees or civil servants while farming on weekends or living on a pension. They have other income from farming as well as salaries and pensions, all of which are deposited in JA Bank in many cases.

If the reduction of rice acreage is stopped and the price of rice falls, the inefficient small-scale dual-income farmers will stop farming. JA wants to keep these farmers in farming villages at all costs. What JA needs to do to achieve this is to have a ‘high rice price’ through its policy of reducing rice acreage.

The massive 107 trillion yen collected by JA is managed by the Norinchukin Bank (Norinchukin), which is more than just an agricultural organization; it is also a huge institutional investor.

JA is politically active in promoting the reduction of rice acreage and, as was the case last year, it even tries to maintain the rice price by raising the estimate (the advance paid by JA for rice shipped to customers). On the surface, they appear to be on the side of small farmers. However, it is no exaggeration to say that these actions are not for the sake of “rice production” but for the sake of “securing depositors for the financial business.

This structure is fixed by the interrelationship between JA, politicians, and MAFF: JA runs the financial business by holding on to dual-income farmers, and provides organizational votes to politicians. Politicians defend the reduction of rice acreage for votes. MAFF maintains its authority through regulations and subsidies, and secures a place of descent for its employees.

Within this triangle, the perspective of national food security and the interests of consumers and taxpayers are missing. The people are forced to pay taxes to subsidize the reduction of rice acreage, and are forced to buy rice at higher prices. It is truly a match pump, and the people are forced to bear a double burden. The people are paying for a policy that will lead to starvation in the event of a food crisis.

Unless the policy is changed, the risk of food shortages in the event of an emergency will not be eliminated, Yamashita said angrily.

We must abolish the ‘policy of rice acreage reduction’ and shift to world-class agriculture,” he said. Otherwise, we, the people, will not only be forced to buy expensive rice, but we will continue to be exposed to the risk of starvation in the future. This is such a life-or-death issue, yet no political party has taken it up in this election. This is because all parties are united in their support for smallholder farmers.

We need to take a sober look at this reality.