- High rice prices in Japan have led the agriculture ministry to allow disbursements from its million-ton rice reserve to help quell price increases. Officials are reassuring rice farmers that such disbursements won’t cause prices to tumble.
Rice prices are skyrocketing so much in Japan that the government is set to dip into its reserves of the grain that serves as a daily staple for the vast majority of Japanese households.
Much like the U.S. With its Strategic Petroleum Reserve, Japan stockpiles up to 1 million tons (equal to the weight of 5,000 blue whales) of the country’s national staple crop. The reserve equates to about one-seventh of the country’s estimated annual consumption, according to Bloomberg.
Yet unlike the American petroleum reserve, which former President Biden tapped during his term to help lower gas prices, Japan’s rice stockpile has previously been built up in case of emergencies like natural disasters or crop failure. The last time the country tapped into the reserve was in 2011 following the Tōhoku earthquake and subsequent tsunami that caused a meltdown at a Fukushima nuclear power plant, the Financial Times reported.
But with domestic prices of the grain up 60% as of last month, according to Bloomberg, rice has hit the country’s core inflation hard. Prices especially surged last summer as consumers ran to stock up on rice for fear of a possible megaquake off the country’s Pacific coast. A combination of factors including supply shortages, rising production costs, and tourism-strained restaurants and hotels is impacting supply and demand. Additionally, Japan’s central bank last month raised interest rates to their highest level in 17 years as it continues to battle stubborn inflation.
To quell its rice prices, Japan’s Minister of Agriculture, Taku Eto, said late last week that the government would release some of the country’s stockpile, although he did not give a date for when disbursements could start. The agriculture ministry will also amend the rules to allow the government to tap into the rice reserve “when smooth distribution of staple rice is hindered and when the ministry deems it necessary,” the FT reported.
High rice prices have mostly benefited farmers in Japan, who are key supporters of the country’s Liberal Democratic Party, which has mostly held power since 1955, according to Japanese newspaper Asahi Shimbun. To avoid triggering a major price drop that could anger farmers, the government will buy back the rice it disburses within one year, according to the outlet.
Still, Eto said, releasing some of the rice from its strategic reserves is better for producers than if the population ate less rice.
“Producers might oppose the move, saying the rice price was finally high enough to cover their inflated costs of production,” Eto said, according to Bloomberg. “But I hope everyone understands that the release would benefit producers, too, as high prices could trigger consumers to change from eating rice.”
