A Sudden Reversal: An Abnormal Situation Where “Old Rice Is More Expensive Than New Rice” Due to a Rice Surplus! The Ministry of Agriculture, Forestry and Fisheries’ “590,000-Metric-Ton Quarantine” and the Machinations Behind the Scenes

The Unusual Situation Where Last Year’s Rice Is More Expensive Than This Year’s

The ’26 crop of new rice has begun appearing on supermarket shelves.

It is reported that the “advance payments” made by agricultural cooperatives to farmers when collecting rice have been set 20–40 percent lower than the previous year for the ’26 crop nationwide.Due to this decline in advance payments, signs of an unusual trend are emerging in the rice aisles. It appears a “reversal” is taking place, where the price of the ’25 crop—which currently accounts for the majority of stock on the shelves—is exceeding that of the ’26 new crop.

If older rice were to cost more than new rice, it would be a truly unprecedented situation.

“Early-harvest rice from Miyazaki and Kochi prefectures, for example, is being sold at low prices. However, I suspect the phenomenon of new-crop rice being cheaper is limited to certain varieties. It appears the Ministry of Agriculture, Forestry and Fisheries has adjusted its repurchase of stockpiled rice to prevent such a price reversal, ”

This is the view expressed by agricultural economist Kazunori Oizumi, Professor Emeritus at Miyagi University.

On the 1st of this month, former Minister of Agriculture, Forestry and Fisheries Norikazu Suzuki announced at a press conference that the government would repurchase 210,000 metric tons of government-stockpiled rice released in 2025. On the following day, the 2nd, the Ministry of Agriculture, Forestry and Fisheries announced that it would conduct a competitive bidding process for the repurchase on the 18th of this month.

As a measure to alleviate the rice shortage and soaring prices known as the “Reiwa Rice Crisis,” a total of 590,000 metric tons of government-stockpiled rice was released in Reiwa 25. Of this amount, 310,000 metric tons was sold through open competitive bidding subject to repurchase conditions, while 280,000 metric tons was sold through negotiated contracts targeting retailers and other entities.JA Zen-Noh (National Federation of Agricultural Cooperatives) secured 90 percent of the rice offered in the competitive bidding.

However, in a sharp reversal from the “Reiwa Rice Crisis,” there is now a surplus of rice on the market in ’26.Amid a glut of rice from the ’25 harvest, calls for the buyback of reserve rice grew louder from agricultural cooperatives and farmers concerned about a price collapse, and LDP lawmakers representing the agriculture and forestry sectors also requested early implementation. Former Agriculture Minister Suzuki is said to have been lobbying senior officials at the Prime Minister’s Office for the buyback since around June.

So why was the buyback delayed until September?

“ The Prime Minister’s Office, which wanted to prioritize measures to stabilize prices, put the brakes on the plan, stating, ‘We cannot carry out a buyback that would directly lead to rice prices remaining high.’ As a result, they had no choice but to delay the announcement until rice prices began to trend downward.The Ministry of Agriculture, Forestry and Fisheries likely wanted to buy back the rice sooner to maintain prices at a relatively high level ” (Professor Emeritus Oizumi; same below).

What about the volume to be repurchased? As of the end of June, private rice inventories stood at 2.43 million metric tons—a record high exceeding the appropriate level of 1.8 million to 2.0 million metric tons. The repurchase volume of 210,000 metric tons is far from sufficient to dispel the sense of surplus in the market.

“Currently, private sector inventories are 400,000 to 600,000 metric tons above the appropriate level. Even if the government buys back 210,000 metric tons and removes them from the market, the overall trend of oversupply will not change. 

The Ministry of Agriculture, Forestry and Fisheries considers 1 million metric tons of government rice reserves to be the appropriate level directly linked to Japan’s food security. However, if the government were to repurchase all the rice released in 2025 at once, it could strain the supply-demand balance, causing prices to spike again and potentially provoking public backlash.“Isn’t the 210,000-metric-ton buyback the first step toward rebuilding the stockpile system within a range that won’t stir up public opinion? ”

The Mechanics Behind the 590,000-Ton Set-Aside

The “210,000-metric-ton buyback” alone will not stem the decline in rice prices desired by agricultural cooperatives and the agricultural and forestry lobby, nor will it be very effective in curbing the market’s surplus trend. Professor Oizumi reveals, “In fact, the Ministry of Agriculture, Forestry and Fisheries is proceeding with the market isolation of the ’25 rice crop through a separate measure.”

That measure is the “Year-Round Rice Supply and Demand Expansion Support Project,” under which the government partially subsidizes rice storage costs—such as warehouse fees—to ensure a stable supply in line with demand and prevent a collapse in rice prices.

“In addition to the 210,000 metric tons being repurchased, the Ministry of Agriculture, Forestry and Fisheries is accumulating 60,000 metric tons as part of a pilot project under the ‘Year-Round Rice Supply and Demand Expansion Support Program,’ which encourages the private sector—including collectors and wholesalers—to build up reserves through government support.Furthermore, through this support program, the ministry is subsidizing warehouse storage fees for local agricultural cooperatives (JA) and requesting that they refrain from shipping 320,000 metric tons of surplus stock. Adding the 60,000 metric tons and the 320,000 metric tons to the 210,000 metric tons being repurchased brings the total to exactly 590,000 metric tons—the same amount as the reserve rice released in 2025. 

Lawmakers representing the agricultural and forestry sectors are pushing for additional buybacks rather than stopping at 210,000 metric tons, but the Ministry of Agriculture, Forestry and Fisheries is attempting to skillfully manage the situation using this support program. Their calculation is likely that this approach is a softer policy and less likely to draw criticism from the public.”

Agricultural cooperatives and other collection agencies that apply for the “Annual Rice Supply and Demand Expansion Support Program” and continue to store the ’25 rice crop in warehouses under the condition that they “will not ship it until March ’27” will receive subsidies from the government.Does this mean that agricultural cooperatives, which are sitting on massive inventories of the ’25 rice crop, will be able to avoid significant financial losses?

“The organizations eligible for government subsidies for storage costs are almost exclusively JA-affiliated groups. Even regarding this buyback of stockpiled rice, since JA Zen-Noh won the bid for the majority of the 310,000 metric tons sold last year through a general competitive bidding process with buyback conditions, logically speaking, the government would have to buy it back from Zen-Noh. 

However, 280,000 metric tons of the reserve rice released last year were sold to retailers and others through discretionary contracts that do not carry a buyback obligation. Logically, if the government is to buy back the rice from the market, it should do so from all businesses involved in the distribution chain.”  

“ Both the storage fee subsidies and the repurchase of reserve rice are likely tied to vested interests.”

The Short-Sighted Measures of Bureaucrats to Prevent a Reversal

According to an announcement by the Ministry of Agriculture, Forestry and Fisheries, the average price per 5 kg of rice sold at supermarkets nationwide from September 7 to 13 was 2,971 yen. Branded rice, which accounts for nearly 80 percent of sales volume, averaged 2,988 yen. This is the first time in about two years that the price has fallen below 3,000 yen.

So, what about the price of new rice, given that the estimated prices for the ’25 crop are 20–40 percent lower? According to the *Nihon Nogyo Shimbun*, the estimated prices for the ’26 crop in major producing regions are primarily in the range of 17,000 to 18,000 yen per 60 kilograms.

“Estim ated prices soared in ’24 and skyrocketed in ’25. This year’s estimated prices have merely returned to the level seen during the ’24 surge. 

The estimated price for the ’24 crop was the same as this year’s—between 17,000 and 18,000 yen—and the retail price around October was about 3,100 yen per 5 kg.Based on the estimated prices, if the retail price of the ’26 crop follows the same trend as the ’24 crop, I think the median price around October will be around 3,100 yen.”

In other words, there won’t be a “reversal” in prices between the ’25 crop and the new crop. Is this the outcome the Ministry of Agriculture, Forestry and Fisheries intended?

Professor Emeritus Oizumi dismisses it as “nothing more than the shallow thinking of bureaucrats.”

“ Under normal circumstances, MAFF would have chosen either to adjust production of the ’26 crop or to carry out a large-scale market isolation of the ’25 crop. However, given the current high inflation, taking such blatant measures would have sparked a public outcry. They were driven into a dead end where they couldn’t commit to either option.”

So, what MAFF came up with was a superficial attempt to make the numbers add up.

“ They limited the official buyback to 210,000 metric tons to give the appearance that ‘prices are determined by the market.’Behind the scenes, they used initiatives like the ‘Year-Round Rice Supply and Demand Expansion Support Project’ to tie up the inventory of collectors and wholesalers in warehouses, thereby preventing a sharp price drop in the ’25 crop while plotting a soft landing into the price range of the ’26 crop. 

For the Ministry of Agriculture, Forestry and Fisheries, the worst-case scenario would be for excessive buybacks of stockpiled rice to entrench the reversal where ‘old rice is expensive and new rice from a bumper crop is cheap.’ I suppose they resorted to these petty tactics to avoid that.”

MAFF’s Escape from Reality and Policy Failure

MAFF must stop relying solely on petty adjustments and subterfuge and instead steer toward a fundamental shift in rice policy—this is what Professor Emeritus Oizumi urges.

“The current supply-and-demand management system is supposed to accurately gauge demand and adjust production accordingly. In reality, however, discrepancies in forecasting have led to repeated cycles of rice shortages and surpluses, as well as price spikes and crashes, continuously fueling conflict between consumers and producers. The flaws in this system became abundantly clear during the Reiwa Rice Crisis. 

Taking the recent amendment to the Food Act (enacted in July), which explicitly states ‘production in response to demand,’ as an opportunity, we should have launched a pilot program to incorporate market principles and control supply and demand.We need to create commodity markets for spot and futures trading, allowing prices to be determined by free market transactions. The time has come to transform rice policy by implementing a comprehensive package of measures: a shift in the supply-and-demand system, the abolition of production adjustments, structural reform of rice farming (toward large-scale operations), and the development of overseas markets.  

There are even simulations predicting that the number of farmers will drop to zero within the next 10 years. We cannot survive without a rice policy that looks toward overseas markets. However, the Ministry of Agriculture, Forestry and Fisheries currently lacks the personnel capable of drawing up a blueprint and designing a roadmap.”

That same Ministry of Agriculture, Forestry and Fisheries is turning its back on reality and putting forward a misguided argument. Citing the Ministry of Internal Affairs and Communications’ “Household Expenditure Survey”—which targets households with two or more members—it released an analysis stating, “We have not identified a downward trend in overall rice consumption, and the public is not turning away from rice.”

“ They probably wanted to refute the claims made by the media and experts about the ‘shift away from rice.’ It’s completely off the mark. Due to soaring rice prices, total demand has plummeted to a record low of 6.83 million metric tons. Even if household consumption figures remain flat, that’s because people are increasingly switching to cheaper imported rice—so the shift away from domestic rice is definitely happening. 

Far from taking this fact seriously, the Ministry of Agriculture, Forestry and Fisheries is spinning arguments that seem to welcome the fact that domestic rice has been replaced by imported rice. I can only say I’m appalled.”

This is the state of affairs at the Ministry of Agriculture, Forestry and Fisheries, which explains Japan’s food security by stating, “To ensure a stable supply of food to the public, it is essential to secure supply capacity—including the agricultural production infrastructure—and efforts must be made to maintain that capacity through the development of the agricultural and food industries.” …It’s pathetic.

▼Kazunuki Oizumi: Agricultural economist and Professor Emeritus at Miyagi University. Born in Miyagi Prefecture in 1949.He completed his master’s degree at the Graduate School of Agricultural Sciences, University of Tokyo. He has served as a professor and vice president at Miyagi University, among other positions. His publications include *The Hidden Strength of Japanese Agriculture* (Yosensha), *A Theory of Hope for Japanese Agriculture* (NHK Publishing), and *How the Food Value Chain Is Transforming Japanese Agriculture* (Nikkei Publishing).