Why is there a rice shortage in Japan?

In Japan, a country where rice is the staple food, a jaw-dropping “rice shortage” is unfolding.

The average price of 5 kg of rice on supermarket shelves once soared to 5,000 yen (about 250 yuan), almost twice the same period last year, setting a record high. Many Japanese have to put down rice and eat noodles, bread and even potatoes instead. This not only makes the dining table of ordinary families lose its luster, but also makes Japanese society fall into an unprecedented anxiety: there is no rice to cook!

Why is there a “rice shortage” in Japan?

First, extreme weather is the direct fuse. In the summer of 2024, Japan suffered from rare high temperatures and droughts, and rice production in many parts of the country dropped sharply. In particular, the Northeast region, which has always been the origin of Japan’s high-quality rice, was damaged during the heading period of rice due to continuous high temperatures, and the reduction in production was as high as 20%-30%, which made the rice supply stretched from the source.

Secondly, the recovery of the tourism industry has exacerbated the contradiction between supply and demand. As the shadow of the epidemic dissipated, Japan welcomed a record number of foreign tourists in 2024, with the annual number of visitors to Japan exceeding 35 million. The influx of tourists has pushed up the demand for rice in the catering industry. The consumption of rice in sushi restaurants, ramen restaurants, and izakayas has surged, while domestic production has been unable to keep up. With supply in short supply, rice prices naturally rose.

However, what really escalated the “rice shortage” into a crisis was the structural problem of Japan’s agricultural system-the monopoly and inefficiency of the agricultural cooperatives.

The Japan Agricultural Cooperatives (JA) is not a simple farmer organization, but a huge interest group that controls the entire agricultural industry chain. It is not only responsible for the production and sale of agricultural products, but also involves finance, insurance and even political lobbying. According to statistics, the Agricultural and Forestry Central Treasury under the Agricultural Cooperatives manages more than 100 trillion yen (about 5 trillion yuan) in assets, which can be called the “invisible giant” of the Japanese economy.

During the “rice shortage”, the government released a total of 410,000 tons of reserve rice, but shockingly, 95% of it was hoarded by agricultural cooperatives through bidding, purchased at low prices and sold at high prices, manipulating market prices. Only 7% of the reserve rice actually flowed into the retail market, and ordinary consumers still could not buy affordable rice.

A deeper reason is Japan’s long-term “rice reduction policy” (policy to reduce rice planting area). In order to maintain stable rice prices, the government has encouraged farmers to reduce rice planting and switch to other crops since the 1970s. Although this has avoided a sharp drop in rice prices in the short term, it has led to a continuous decline in Japan’s food self-sufficiency rate, which has fallen to 37% in 2024, far below the average level of developed countries. When production dropped sharply due to weather, the buffering capacity of reserve rice was stretched, and the market immediately fell into chaos.

A month ago, the then Minister of Agriculture, Forestry and Fisheries, Taku Eto, said in a speech: “I have never bought rice, and there is enough rice at home to sell.” This nonsense ignited the anger of the people across the country! No matter how much Taku Eto defended himself, he could not escape the fate of resigning.

So, who will solve the “rice shortage” problem?

Prime Minister Shigeru Ishiba placed his political bet on a 44-year-old political star.

On May 21, former Environment Minister Shinjiro Koizumi was appointed in the midst of the “rice shortage” storm.

At the press conference, Koizumi made a bold statement: “I want to be the ‘rice minister’ and put solving the rice problem first!” This seemingly straightforward statement reveals his determination to deal with the crisis with thunderous means. In just a few weeks, Koizumi launched a series of bold measures to try to break the rice shortage deadlock.

First, suspend bidding and use arbitrary contracts

The first fire after Koizumi took office was to cut the allocation mechanism of national reserve rice. He decisively announced the suspension of the original reserve rice bidding system, and instead the government directly signed “arbitrary sales contracts” with large supermarkets and convenience stores to ensure that the reserve rice quickly flows into the market at a low price. This decision directly targets the hoarding of rice by agricultural cooperatives. Previously, the Agricultural Cooperatives almost monopolized the flow of reserve rice through bidding, and the rice price remained high by buying low and selling high. Koizumi’s “random sales contract” bypassed the Agricultural Cooperatives and directly pushed 300,000 tons of reserve rice to the market at a target price of 2,000 yen (about 100 yuan) per 5 kilograms.

This move was effective. Starting from May 31, large supermarkets in Tokyo, Chiba, Nagoya and other places began to sell affordable reserve rice at a price as low as 2,138 yen/5 kilograms. Consumers flocked to the supermarket shelves and were once emptied. Koizumi personally inspected the AEON supermarket in Shinagawa District, Tokyo. Facing the camera of the reporter, he confidently said: “The response speed of private circulation channels exceeded expectations, and the high rice price situation is being reversed.”

Second, crack down on resale and stabilize the market order

The launch of affordable reserve rice also brought new problems-the rise of “scalping parties”. Some speculators bought a large amount of reserve rice and resold it at a high price on second-hand platforms, disrupting the market order. In response, Koizumi quickly pushed for the implementation of the policy, requiring major e-commerce platforms to prohibit the reselling of reserve rice. At the same time, Koizumi made it clear in a press conference on June 10 that if the reserve rice is resold, it will be arrested in accordance with the “Emergency Measures for National Life Stability Law” and will be sentenced to a fixed-term imprisonment of less than 1 year or a fine of 1 million yen.

Third, look to the long term: consider emergency imports and agricultural cooperative reforms

Koizumi is not satisfied with short-term rescue. On June 6, he made a heavy statement at a press conference after the cabinet meeting: “If the reserve rice is exhausted and the rice price cannot be lowered, emergency import of rice is also an option.” This statement caused an uproar. You know, Japan has always strictly restricted the import of rice to protect domestic agriculture. In 2024, Japan’s imported rice will account for only 8% of consumption, mainly from California and Thailand.

Koizumi’s statement is undoubtedly a direct challenge to agricultural cooperatives and agricultural protectionism. He even borrowed the famous saying of his father, former Prime Minister Junichiro Koizumi: “There should be no sacred and inviolable areas in agricultural policy.” This made the outside world smell his ambition to promote the reform of agricultural cooperatives.

Polls show that Koizumi’s approval rating has continued to rise during the rice shortage crisis, and even led to a rise in the overall approval rating of the Ishiba Cabinet, paving a bloody way for the ruling Liberal Democratic Party to maintain its victory in the July Senate election.

If he can successfully solve the rice shortage problem and implement effective reforms in Japanese agriculture, there is no doubt that these political achievements will lay a solid foundation for him to ascend to the prime minister’s throne in the future.