Why has Japan been hit with rice shortages, soaring prices despite normal crops?

Q: It's said that the decline in rice consumption is serious, but if the amount produced increased and the price went down, people would eat more, wouldn't they?

A: Exactly. Rice acreage reduction is an absolutely terrible policy. The government spends over 300 billion yen (about $2.06 billion) in subsidies annually to decrease the amount of rice produced, thus going out of its way to raise the price and increasing the burden on consumers.

> A: People across the world say, "It's the best-tasting rice in the world, so why isn't more of it being exported?" Japanese agricultural officials often comment, "We can't compete with cheap rice produced in Thailand and elsewhere," but that's not the case. Just like you have luxury and standard cars, there are different kinds of rice. Luxury cars won't lose out to ordinary ones even if the price is higher.

Totally not the point of this, but is Japanese rice really "the best-tasting"? Don't get me wrong, I enjoy California-produced Japanese-style short-grained varieties (I'm not sure whether I've bought actual Japanese-grown rice) -- in some applications. But sometimes you want a jasmine or a basmati or something else, and it seems like that's a matter of preference and what you're used to and what other food you're eating it with, more than "better" or "luxury".

> The crop situation index for rice grown in 2023, indicating the amount of the rice harvest, was 101

Does that mean that each acre is producing about 100% of the average production, or that the total production is about 100% of the average production?

The article makes it sound like the change in production is neglectable and that the change in demand is tiny, implying that a high estimate would be about 0.5% increase in demand.

Im somewhat baffled by this policy… just produce as much rice as you can, buy surplus from farmers and give it out cheap/free as food assistance to developing countries. Surely a small cost to the Government to get a steady, controlled production numbers.

There is no rice shortage in Japan currently, at least not in the sense of the word 'shortage' in economics. Prices are not held artificially low (they are influenced by the state in a market-friendly way through restrictions in supply), and so we see that rice is as available as ever, just at a higher price than last year.

A lot of countries have a national food reserve that is used to calm prices when demand fluctuates, it allows time to adjust production while you’re putting food in or out of the reserve to control prices.

Does Japan not have that?

TLDR. The expert Kazuhito Yamashita argues:

    Japan is only producing about half of the rice it could potentially produce.
    This is due to government policy that pays farmers not to grow to prevent falling prices.
    Argues in the current geopolitical climate with the potential of a food blockade, this policy should be abandoned.
    If abandoned, Japan will become one of the largest rice exporters which he argues is better for Japanese food security.

Why? Politics. Fin.

The Japanese government has long managed the production of rice to keep market prices high for the farmers' sake and given subsidies to farmers to not fully utilize their production potential.

Covid hit and tanked the demand moreso than usual, so government policies shifted to further production (read: supply) reductions. Less supply in response to reduced demand equals maintained market prices.

Politics has not caught up in the post-covid era where demand from both domestic and international (including tourism) has recovered and surged. The supply is still mid-covid limited.

Why? Politics. Fin.

Wife bought a big bag of white rice yesterday. You can still find it although not necessarily at big supermarkets.

Many are missing the cultural aspect. This isn't all about the government protecting the price. There is a second order issue. If the price dropped, Japanese farmers would react by reducing costs, by bringing in new tech and consolidating small farms into larger agri-businesses. Japan wants avoid the cultural changes that would bring to rural areas, areas that many believe to be the heart of Japanese culture.

this article is completely bogus. there is no shortage. this was done on purpose via government policy

I wonder how much of this is actually just inflation. The first sign of inflation is shortages, usually, and then people raise prices to keep the goods on the shelf.

They’re claiming…… tourism is the reason for increased demand? Seriously?

So he says it's not because of tourism, but because of subsidies.

But then in the next section says it's because demand outstrips supply because of things like tourism.

What?

This is a piece of political writing targeted at the Japanese land use and subsidy policy. Nothing more.

TLDR: the article points to a system of agricultural subsidy through quota limits, called "acreage reduction", similar to EU "set aside".

It seems a common phenomenon around the world that, because price instability for food leads to social instability, governments end up with elaborate systems of direct and indirect price control. In this case, farmers being paid not to grow rice.

yet another success of planned economy

Soon in Europe, only the protests stopped for a moment.

I’m sure they would never do that here. Our price increases are completely organic, natural, and market-driven, as always. Pay no attention to the man behind the curtain.