Falling rice prices

–The Asahi Shimbun, Sept. 27
EDITORIAL: Falling rice prices

Lower rice prices may spell serious trouble for farmers but are welcome news for consumers.

The government’s first response to the prospect of a sharp decline, compared with usual years, in the prices of rice to be harvested this year should be based on the viewpoint and interest of consumers.

The decline in rice prices is a product of an oversupply of the staple food in this nation. In addition to a massive carry-over of unsold rice from last year, when rice prices also dropped, an expected bountiful crop this year is likely to result in a sizable glut.

Even if depressed rice prices cause losses for rice growers, the income support program for farming households introduced this year by the government led by the Democratic Party of Japan will guarantee them a minimum level of income.

But the Central Union of Agricultural Cooperatives (Zenchu), the national organization of local agricultural cooperatives, is lobbying the government to take steps to prevent rice prices from sinking.

Specifically, the organization is demanding that the government buy surplus rice by using, ahead of schedule, the new rice stockpiling system that the farm ministry plans to introduce next fiscal year.

But we find it difficult to support Zenchu’s lobbying campaign.

The biggest factor behind declining rice consumption is the shrinking and aging of the nation’s population. It is glaringly obvious that the government’s policy to maintain rice prices by purchasing surplus rice will reach its limits sooner or later. This approach will not solve any of the structural problems within the Japanese agricultural sector that cause an oversupply of rice.

It should be remembered that the income support program for farming households was created on the assumption that rice prices would be allowed to decline.

For decades after the end of World War II, the government maintained rice prices through the so-called acreage-reduction policy to adjust supply. This system was designed to support the income of rice farmers by forcing consumers to buy rice at prices kept artificially high.

However well intended, this policy has had many undesirable side effects for the agricultural sector. Although the government spent a total of 7 trillion yen ($83 billion) over the years to finance the acreage-reduction policy, Japanese agriculture has remained in a steady decline.
The present serious shortage of young farmers who can become the future backbone of agriculture in this nation and the vast amount of abandoned farmland can be said to be a result of this policy.

Now the government should move in the direction of integrating efforts to aid the agricultural sector through a taxpayer-financed system that will allow rice prices to fall in the domestic market.

Such a move would enhance the international price competitiveness of Japanese rice and thereby make it easier to open Japan’s farm market to imports.

This policy shift could bring huge benefits to the Japanese people as a whole by eliminating the biggest obstacle in Japan’s trade negotiations with other countries for free trade agreements.

Lower rice prices at home would improve the prospects for Japanese rice exports. Reputed for its safety and taste, Japanese rice has the potential to gain popularity in markets in China and other rice-eating Asian nations.

The current system of propping up the income of farming households is seriously flawed, as it is still married to policies that trim rice production to maintain artificially high prices.

Since the program covers all farmers selling rice, including very small-scale growers, it is hampering consolidation of farmland into the hands of large-scale farmers.

The time has come for new policy efforts to solve these challenges and improve the competitive environment for domestic farmers, so that Japanese agriculture can develop, even if rice prices fall.

srachai について

early retired civil engineer migrated from Tokyo to Thailand
カテゴリー: Uncategorized パーマリンク



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