A price maintenance policy that ignores demand trends could further accelerate "the move away from rice." Isn't it more important to strengthen the agricultural foundation by increasing productivity?
According to the Agriculture, Forestry and Fisheries Ministry, the price of new rice at which rice shippers sell to wholesalers dropped 4% year-on-year in September, when new rice starts to become available. It is the first time in six years that these prices have fallen.
Brand-name rice such as Niigata's general Koshihikari, which has the highest trading volume, and Hokkaido's Nanatsuboshi are also cheaper across the board.
In addition to the growing move away from rice among consumers, the novel coronavirus pandemic has led to a slump in demand for commercial rice.
The government and the Japan Agricultural Cooperatives, also known as JA, plan to curb the fall in prices in order to protect farmers, but in a market economy, a certain amount of price fluctuation is unavoidable. Unreasonable support measures should be avoided if at all possible.
The production adjustment program with reduction of rice paddy acreage that began in the 1970s to maintain the price of rice was abolished from 2018 production. Since then, the government has been announcing reasonable production levels for the staple of rice across the country, with the aim of stabilizing supply and demand.
A reasonable volume for 2021 production is projected to be about 6.9 million tons, about 400,000 tons less than this year's production. The ministry is said to encourage farmers to curb their production based on this information.
The JA Group plans to store 200,000 tons of rice from 2020 production and postpone sales until next fall or later to prevent prices from falling. The storage costs will be subsidized by the government.
Meanwhile, consumption of rice has been decreasing by about 100,000 tons annually in recent years, and the consumption of 2019 production rice dropped by 220,000 tons compared to the previous year. In addition to the diversification of dietary habits, the tendency to limit the consumption of rice, which is high in carbohydrates, is also thought to be a factor.
If the price remains high amid declining demand, consumption could further decline.
As a measure to maintain the price, there is a system to support farmers in shifting from the production of rice as a staple to producing rice for feed, and there are calls to expand the subsidies.
However, only increasing the number of farmers who rely on subsidies will not revitalize agriculture. It is important to come up with creative ways to stimulate demand and measures to encourage efficient management.
There is a strong need for inexpensive commercial rice at restaurants and convenience stores. There are agricultural organizations that have stabilized their operations by concluding long-term contracts with food service companies through their sales efforts.
Profitable agriculture should be established, even at low prices, by increasing productivity through large-scale farming and the use of advanced technology.
Exports to Asia, including Hong Kong and Singapore, are growing. If price competitiveness is increased, exports of high-quality branded rice can be expected to expand.
-- The original Japanese article appeared in The Yomiuri Shimbun on Nov. 1, 2020.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
