Explainer | Japan's rice riot: A closer look at factors behind shortage

Rice is a common staple on Japanese dining tables. Popular dishes such as sushi, onigiri, gyudon, and red bean rice are all made from rice. However, this summer, Japan is experiencing a rice supply shortage, referred to by the media as the "Reiwa Rice Riots."

Since July, supermarkets in Nagano Prefecture have implemented a purchase limit of "one bag per household" due to insufficient rice supply. Some supermarkets in Hiroshima Prefecture, facing supply shortages, have adopted a strategy of selling smaller packages, discontinuing 10-kilogram bags in favor of 5-kilogram and 4-kilogram bags. As a result of the rice shortage, the price of locally produced "Koshihikari" rice has risen to 2,400 yen for 5 kilograms, an increase of about 300 yen compared to the same period last year.

An earthquake in Miyazaki Prefecture in August further exacerbated the rice shortage. The Japan Meteorological Agency issued a tsunami warning after the earthquake, turning already limited rice supplies into "disaster relief reserves." This led to a nationwide rush to buy rice, clearing many supermarket shelves. Although the disaster alert has since been lifted, the situation has not improved, and rice remains difficult to obtain. Reports indicate that newly harvested rice from Chiba Prefecture has started to become available, but it sells out as soon as it hits the shelves.

What has caused this rice shortage?

The Japanese government has attributed the shortage to three main factors.

First, the extreme heat in 2023 negatively affected the growth of rice crops, impacting both yield and quality. Second, post-COVID-19, there has been a resurgence in dining out, coupled with a surge in foreign tourists due to the yen's depreciation, leading to increased rice consumption. Third, the earthquake warning heightened public panic, quickly turning concerns about rice shortages into a snapping up the rice trend.

Another criticized factor is the apparent inaction of the Ministry of Agriculture, Forestry and Fisheries (MAFF), which is responsible for addressing the rice crisis. Prime Minister Fumio Kishida recently convened a meeting urging MAFF to "take the consumer's perspective and work hard to resolve rice distribution issues." However, MAFF has seemingly only shifted the burden, asking wholesalers and distributors to "step up" without taking further action.

Local governments are feeling the pressure of the ongoing rice crisis. An investigation in Osaka Prefecture revealed that 80% of retail stores had run out of rice. On August 26, Osaka Governor Hirofumi Yoshimura called for the government to release reserve rice, arguing that "there's no need to let reserve rice sit idle in warehouses."

Years ago, the Japanese government implemented a "5-Year Rice Reserve System," which involves purchasing 200,000 tons of new rice annually and storing it for five years to prepare for potential crop failures. Unused rice, after five years, is sold as animal feed. The government spends between 40 billion and 50 billion yen annually on this program, funded by the national budget. Thus, the reserves should be ample.

However, MAFF believes that using reserve rice is unnecessary. Agriculture Minister stated at a press conference on August 27 that new rice will soon be available in September, and releasing reserve rice would require a bidding process, which could delay addressing the rice shortage.

MAFF assesses that new rice from Chiba and Ibaraki Prefectures has already become available, and rice from Niigata and the Tohoku region will soon be harvested, leading to a peak in new rice supply shortly. Additionally, as public stockpiling demand decreases, the rush to buy rice will gradually diminish, allowing inventory to recover.

While MAFF appears confident, the public is generally dissatisfied. The signs of a rice shortage have not emerged recently; if MAFF had acted sooner, perhaps the rice crisis could have been avoided.

Moreover, MAFF had already reported over a month ago that, as of June 2024, the demand for staple rice had increased by 110,000 tons year-on-year, reaching 7.02 million tons, while private inventory had decreased by 20%, down to 1.56 million tons, widening the supply-demand gap, yet no targeted preventive measures were taken.

It's important to note that the hot summer weather, the influx of tourists consuming rice, and the panic buying due to disaster warnings are merely short-term triggers for the rice shortage. The fundamental cause of the rice shortage in Japan lies in policy direction.

Japan had long implemented a policy to actively control farmland size and rice production to maintain rice prices. Although this policy was halted in 2018, its suppressive effects on rice production remain entrenched. Additionally, the government has subsidized farmers growing feed rice and soybeans to "promote" a shift towards specialized crops. Under such policy direction, it is not surprising that edible rice stocks have decreased and prices have risen.

Opinions vary on how long the rice crisis will last. According to the latest consumer price index released by the Tokyo Metropolitan Government for August, rice prices have surged by 26.3% compared to the same period last year. The number of farmers switching to staple rice cultivation is expected to increase, potentially alleviating the rice shortage issue.

However, the present situation is more pressing. Japan is currently at a critical juncture for harvesting new rice, but Typhoon Shanshan has struck, delaying farmers' harvests and potentially causing devastating damage to unharvested rice fields. If new rice cannot be released on time, the turmoil caused by this rice shortage may continue for an extended period.

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