TOKYO, Jun 21 (News On Japan) - The recent surge in rice prices has exposed a critical juncture in Japan's agricultural policy. While the government has begun releasing reserve stocks to address the prolonged spike, prices remain stubbornly high.
Based on interviews with wholesalers and others accused of "hoarding," anchor Naomi Trauden investigates the factors behind the crisis.
The sharp rise in rice prices has become a major news topic. Although Agriculture Minister Koizumi is leading countermeasures such as releasing stockpiles, prices remain elevated, hovering around 4,000 yen per 60 kg bag—roughly double the price a year ago. The situation highlights persistent structural issues in Japan's rice supply system.
While in past years extreme weather was often cited as a cause of price hikes, many now point to more complex factors. One resident commented, "Middlemen profit from this system. It hurts both farmers and consumers. The whole process seems opaque." Similar frustrations are spreading, especially after Koizumi remarked, "Compared to other food products, rice distribution is extremely complex. There’s a black box." According to one major wholesaler, annual revenue has risen by over 20 percent, with operating profits surging by roughly 500 percent compared to the previous year. This has fueled suspicions that wholesalers are reaping excessive profits from the price spike.
A rice wholesaler in Gifu Prefecture, one of the region’s major distributors, was directly interviewed. The company purchases about 8,000 tons of local rice brands for delivery to supermarkets and restaurants, mainly around Tokyo. Asked whether excessive layers of middlemen were driving prices up, the wholesaler acknowledged that trading among wholesalers has long existed due to regional differences in supply and demand. For example, rice from Gifu may be plentiful, but nearby Mie Prefecture might face shortages. In such cases, wholesalers trade rice with one another to fill gaps, adjusting prices accordingly. This additional trading margin can contribute to rising prices, particularly during supply shortages like this year’s.
To secure supply during shortages, some wholesalers even turned to imports. Since domestic harvests were insufficient last year, they sourced foreign rice, including about 500 tons from Taiwan and the United States, for commercial use. However, with government reserves now being released, these imported stocks risk being sold at prices close to cost, potentially leading to losses. "We’re selling almost at break-even levels. It’s worrying going forward," said the wholesaler.
Meanwhile, public criticism has also been directed at JA, the Japan Agricultural Cooperative. Some blame JA for failing to adapt to modern needs and accuse it of preserving outdated vested interests. To explore this issue, a large-scale rice farmer in Tochigi Prefecture was interviewed. Producing over 150 tons of rice annually, the farmer buys equipment and fertilizer through JA but sells rice directly to restaurant chains instead of through JA channels. He explained that JA operates on a simple commission basis, not as a profit-seeking entity, and does not see JA as the main culprit. Instead, he prioritizes stable pricing through direct contracts, which allow him to plan his business more securely—a luxury small-scale farmers cannot easily afford.
Asked about current price levels, the farmer said, "I think 3,500 to 4,000 yen is a fair price. We farmers are not making excessive profits. We finally feel we are being compensated fairly."
Invited to analyze the issue was Professor Kuninori Nishikawa of Ibaraki University, an expert on Japan’s rice industry. Trauden noted that while public debate often blames specific groups such as wholesalers or JA, her interviews revealed that most players are making efforts to navigate difficult circumstances amid inflationary pressures.
Regarding the government's proposal to revise the system in which JA purchases rice—moving from advance payments based on estimated prices to lump-sum fixed purchases before sales—Nishikawa commented, "While it may offer farmers more predictability, I don't expect significant changes since pre-payments have already been set close to final prices in recent years."
Despite government efforts to release reserve rice stocks, including a total of 800,000 tons, some wholesalers report that deliveries have been delayed. "We’ve received purchase requests, but the rice isn’t arriving yet," said Gifu Rice. Nishikawa noted that prices may begin to decline once these stocks reach retailers, but delays in distribution are one reason why prices have yet to fall.
Companies accused of profiteering argue otherwise. One wholesaler, whose profits rose 500 percent year-on-year, issued a statement claiming that profit margins had long been thin at just 12 percent and that rising purchase prices were simply passed on to customers with their understanding.
When asked whether speculative profiteering is widespread, Nishikawa responded, "While the rice market has indeed become more profitable, attracting various participants, I believe speculative trading still represents a small fraction of the total market."
As for the fundamental cause of this year's sharp increase, Nishikawa pointed to a miscalculation in supply adjustment policies. Under the system, production is controlled based on demand forecasts to prevent oversupply and price crashes. However, the government underestimated demand for 2023 at 6.8 million tons, while actual demand reached 7.05 million tons. Meanwhile, supply totaled just 6.61 million tons, resulting in a shortfall of 440,000 tons. Such small gaps in supply and demand can cause significant price swings in staple foods like rice.
Source: テレ東BIZ
