The price of rice in Japan has experienced its most significant shock for more than 50 years, as the cost more than doubled over the last year.
This crisis exposes structural problems in the agriculture system, and it fuels voter discontent ahead of important elections.
According to data from Japan’s Statistics Bureau, rice prices rose by 101.7% in May, which is the highest annual increase in more than 50 years.
This jump comes after a spike of 92.1% in March and an increase of 98.4% in April, indicating a steadily deteriorating supply.
Costs are rising rapidly, and this is putting a huge burden on Japanese families.
Lowy Institute reports that the price of a 5-kilogram bag rose from Y=2,228 to Y=4,268 in May. This is up from Y=2,228 to US$15.60 a year ago.
Families who consume 20 kilograms of sugar per month will have to spend an extra Y=98,000. (US$687).
In a country with over 30 percent of households earning less than US$21,032 (Y=3 Million) in 2022, this is an alarming figure.
The Japanese government has been trying to reduce the price of rice by releasing it from the emergency stocks.
It said earlier this month that it would release an additional 200,000 tons of rice. However, structural problems seem to have been at work here.
What has caused rice to become so expensive in Japan?
Multiple factors are at play in the intensifying rice crisis in Japan.
The 2023 heatwave will be a record breaking one, resulting in lower crop yields. Stink bug infestations are also causing widespread damage to crops.
A warning of an earthquake in August 2008 triggered a panic buy and the stockpiling by households, causing a scarcity to be seen in supermarkets.
A global shortage of wheat linked to the Russia-Ukraine conflict has further exacerbated the situation.
As wheat prices have risen, consumers have switched to rice, which is more affordable. This has inadvertently increased demand, further driving the rise of Japan’s prices for rice.
Simultaneously fertilizer prices — which are also affected by the conflict — rose over 30% within the last five years. This has squeezed farmers who already operate on thin margins.
Tim Harcourt is the chief economist of University of Technology Sydney. He told Al Jazeera that panic-buying was one of them.
The war in Russia and Ukraine has caused a shortage of grain, which is why rice was substituted with wheat. Three, the result of the booming tourism industry in Japan as well as a revival in Japan’s economy is causing a demand for more rice, he added.
Under pressure: Small-scale agriculture
Small-scale rice farmers have been a key part of Japan’s rice farming model for many years.
According to data from the agricultural census, by 2024 nearly two thirds of all rice farmers will be cultivating less than 1 hectare.
But large-scale farming is needed to maintain production.
By 2020, 16 % of all rice growers will have cultivated an area greater than 3 hectares. This represents 70% of total planted areas.
The consolidation of farmland has been a limited success.
From 2010 to 2020, there will be an 83% increase in the number of farms with more than 15 hectares, going from 6,654 up to 12,191.
Experts say that this is not enough to ensure a stable supply on a long-term basis.
Mitsubishi Research Institute calls for a major policy change.
The Institute noted that “Scaling-up of rice farmers by farmland acquisition has reached its limit”, adding the creation of sustainable economic incentives is necessary in light climate change.
The crisis is compounded by the inflationary woes of a broader scope
The crisis is exacerbated by the inflationary pressures in Japan.
In May, the country’s core rate of inflation — excluding fresh foods — rose to 3,7%. This is its highest level since January 2023. It also exceeded economists’ predictions.
The spike in prices at home has led some restaurants and consumers to import rice, despite Japan’s policy to protect its market by imposing high import duties.
The gradual nature of this shift has led to concerns over the sustainability and self-sufficiency of the agricultural sector in the country.
Ishiba’s political future is at stake if the rice crisis becomes a crisis?
The crisis couldn’t have happened at a more inconvenient time for Ishiba’s government.
Next month there will be an election for the upper house of parliament, and support for the administration is already at its lowest point since October when he assumed office.
A rise in the price of food, especially something so culturally and symbolically significant as rice, could undermine voter confidence.
Ishiba, in May’s parliament session, said: “We do not know why we are unable to lower prices.”
We will first determine how much and where there is rice.
Pressure is growing at the grassroots level. Save the Children Japan, an advocacy group in Japan, reported that nearly one-third of the low-income households surveyed reduced their rice consumption because it was not affordable.
Harcourt stated that “Rice, the staple food in Japan is a beloved one. Therefore an economic crisis becomes a political issue.”
Uncertain Path
Although policymakers acknowledge the severity of the problem, there are no clear solutions.
In order to stabilize the price, market interventions would have to be combined with reforms of agricultural structure and climate adaptation as well as production incentives.
Meanwhile, Japanese households cut back on food, while restaurants adapt their menus and imports quietly rise. All of these are signs that Japan’s approach to its essential foods will change in the future.
The “rice crises” could become a major political issue if not addressed.
As new information becomes available, this post Japan’s Rice Price Surge: What’s Driving It and Why it Could Spark a Political Crisis may be updated.
