Japan Eases Rules for Releasing Stockpiled Rice Amid Rising Prices

News Desk - TheJapanExpress
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On February 1, 2025, Japan’s Ministry of Agriculture, Forestry, and Fisheries announced new changes to the rules regarding the release of government-stockpiled rice. The rice, which was initially stored only for emergencies like poor harvests, can now be sold to distributors if there are disruptions in the rice supply. This decision was made in response to the recent rise in rice prices across the country.

The price increase has been partly blamed on wholesalers and other distributors who are said to have stockpiled excessive amounts of rice. By relaxing the rules, the government hopes to improve the availability of rice and stabilize its prices.

This decision was made during a meeting of the Council of Food, Agriculture, and Rural Area Policies, a group that advises the agriculture minister. The new approach will allow the release of rice from the government’s stockpile in a more flexible way, aiming to avoid serious disruptions in the rice market.

What Led to the Decision?

The stockpiled rice system in Japan was set up after a major rice shortage in the early 1990s, which led to the infamous “rice riot.” A particularly bad harvest in 1993 and 1994 caused a rice shortage that sparked public unrest. In response, the government began storing rice as a safety net in case of future bad harvests.

Today, Japan’s government stockpiles around 1 million tons of rice. The goal is to be prepared in case of a bad harvest or two consecutive years of low yields. Each year, the government purchases about 200,000 tons of rice to store, which is kept for five years. After that, any rice that hasn’t been used is sold to be made into animal feed.

The changes now being made will allow rice from the stockpile to be sold when the supply chain is disrupted. This could happen if rice becomes difficult to find in stores or if there are other issues with distribution. The government will sell the rice to organizations like the National Federation of Agricultural Cooperative Associations (Zen-Noh). These organizations can then distribute the rice to retailers and other sellers.

However, the rice sold from the stockpile will have to be repurchased by the government within a year, ensuring that the stockpile remains intact. While the rules are being relaxed, the government hasn’t yet provided details on exactly when or how the sales will occur.

Reasons for the Rice Price Increase

The rise in rice prices has been worrying for many Japanese citizens. The price of rice has been climbing steadily for months. According to reports, the prices reached record highs for four consecutive months through December 2024. In December, rice prices were up 64.5% compared to the same month the previous year.

One reason for the price surge is that rice production in 2024 was actually 180,000 tons higher than the year before. Despite this, rice collection by organizations like Zen-Noh was lower by about 210,000 tons. This suggests that some farmers and distributors have been holding on to their rice, waiting for prices to go even higher before selling. This buildup of rice stocks has caused a disruption in the normal flow of rice through the market, which has only made prices rise further.

In addition, the government’s failure to release rice from the stockpile earlier in the year when shortages were first noticed has drawn criticism. Many feel that the government could have acted sooner to ease the situation.

The Government’s Slow Response

When rice prices first began to rise last summer, the government did not release any rice from its stockpile, choosing instead to wait and see if prices would fall once the new rice harvest came in. However, by January, prices had continued to climb, and many were questioning the government’s slow reaction.

At a press conference on January 24, 2025, Taku Eto, Japan’s agriculture minister, explained that the government had hoped that the new harvest would calm the market. “To be honest, we had expected that the market would calm down once newly harvested rice entered the market,” Eto said.

But as prices continued to soar, many people began to criticize the government’s delayed response. Takahide Kiuchi, an economist at the Nomura Research Institute, questioned why the government hadn’t taken action earlier. He said, “Shouldn’t the government have taken measures to ease the rules for selling stockpiled rice last summer?”

These comments highlight the frustration felt by many in Japan, who believe that the government should have acted more quickly to address the rising cost of rice.

Moving Forward: What’s Next?

With the release of the stockpiled rice, the government hopes to stabilize rice prices and ensure that people can continue to buy rice at a reasonable price. The release of rice from the stockpile will likely help reduce the pressure on the market and allow the supply to meet demand more effectively.

However, the full impact of these changes remains to be seen. It’s still unclear when the rice will be released from the stockpile or exactly how much will be sold. The government is also considering various conditions for the release, including a plan to buy back the rice within a year to ensure that the stockpile remains intact.

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