Japan’s rice policy at crossroads amid output shift and high prices

By JIJI

Japan’s rice policy is at a crossroads as prices of the country’s staple food stay around record highs, squeezing households.

“We’ll change course and boost production,” then-Prime Minister Shigeru Ishiba said in August 2025, declaring a change in the government’s rice policy, under which production adjustment had been maintained.

But this was quickly reversed by his successor, Sanae Takaichi, who took office as prime minister in October. Her policy is to keep production in line with demand.

The agriculture minister in her Cabinet, Norikazu Suzuki, firmly maintains the position of “not committing to prices.”

He stresses the need to secure demand first, including foreign demand, and then promote production. If farmers increase production before creating overseas demand, “rice prices will plunge due to an oversupply,” he warns.

After World War II, the government aggressively promoted rice production to address severe food shortages. By 1970, however, with an oversupply of rice, the government reversed course by introducing the gentan acreage reduction policy, under which production targets were set and farmers were encouraged to cut back on rice cultivation to curb excess supply.

Although the policy was formally abolished in 2018, its effects persist. To restrain production and prevent a sharp drop in rice prices, the government continues to operate a de facto gentan system through subsidies that encourage farmers to shift from rice to alternative crops such as wheat and soybeans.

The benchmark for adjusting rice output has long been the agriculture ministry’s supply-demand forecast for the coming year, announced each autumn. For many years, actual production closely tracked these forecasts, except in cases of abnormal weather such as unusually cool summers. In recent years, however, noticeable gaps have begun to emerge.

During the surge in rice prices that began last year, for example, an error in the ministry’s forecast led to actual demand exceeding the projected level by around 400,000 tons. The production shortfall contributed to the spike in prices.

Shinjiro Koizumi, Suzuki’s predecessor, who worked on measures to cope with soaring rice prices in the Ishiba administration, has said, “We’ve learned that it is difficult to maintain rice prices through the conventional measure of adjusting production.”

As uncertainties intensify, such as those posed by climate change, Koizumi argued that there is a limit to the method of adjusting production based on demand projections because the projections need to be accurate.

On the other hand, lawmakers in the ruling Liberal Democratic Party who represent agricultural interests strongly opposed the Ishiba administration’s policy of increasing rice production, warning that overproduction could drive down prices.

Suzuki, who enjoys strong support from such lawmakers, said, “Those on the production front are extremely bewildered,” and cautioned that “if we move quickly to increase production substantially, the stability of the supply-demand balance will be disrupted.”

Suzuki has promised to “improve the way we estimate demand.”

While prices for domestically produced rice continue to be high, private-sector rice imports are on the rise. Import volumes in the April-September first half of fiscal 2025 reached 86,523 tons, 208 times higher than the 415 tons recorded in the year-earlier period.

At a news conference in November, Mitsuo Fujio, president of Tokyo-based major rice wholesaler Shinmei, disclosed that U.S.-grown rice had become the top-selling variety at major client supermarkets in September.

“I feel that soaring prices may cause the market for domestically produced rice to shrink,” he warned.

If the high price of domestic rice remains unaddressed, more consumers may turn away from it in favor of cheaper alternatives. Whether a price level acceptable to both consumers and producers can be achieved is still unclear.

This article has been republished from The Japan Times.