Japan PM in a spot as rice prices soar

There is a crisis in Japan which has a political fallout, which could shake the minority government of Prime Minister Shigeru Ishiba. The crisis has to do with the rising price of rice, which is the staple food of the Japanese, like it is in most East Asian countries.

The prices have risen more than 90 per cent in a year. The popular brand, Koshihikari, is now costing 5,000 yen for 5 kg or $35. Other varieties of rice are costing 4,200 yen or $29 for 5 kg.

The Ishiba government had handled the situation rather clumsily. Prime Minister Ishiba told parliament, “We don’t know why we haven’t been able to push prices lower. We first will figure out exactly how much rice there is and where it is.”

Agricultural Minister Taku Eto had to resign because he said that he “never had to buy rice” because many of his supporters gifted rice. The government had tried to sell rice from its stocks but the price of rice did not stabilise. It is clear that the rising price of rice is due to shortages, probably caused due to an excessively hot summer and poor harvest in 2023. The new agriculture minister, Shinjiro Koizumi, said that he would try to bring down the price of rice to 3000 yen for 5 kg or $20.

The demand for rice has grown because most restaurants lay out rice as a special dish for the tourists, and even as the tourist footfalls grow, the demand for rice goes up, and when there is not enough rice in the marker, then the prices shoot up.

It has been observed that restaurants are buying rice from other countries to make up for the shortage of the home-grown variety, and that this will hurt the demand for the homegrown variety of rice. In many ways, it is a no-win situation.

There is need then for the Japanese government and experts to assess the situation, and take the necessary precaution to handle the exigencies arising from fluctuating rice yields. The excessive summer heat cannot be considered an isolated instance of extreme weather.

Rising temperatures are a worldwide phenomenon pointing to the climate change crisis in general, and to the unmitigated emissions of greenhouse gas emissions. Though its contribution to greenhouse gas emissions is not high compared to the CO2 emissions of the industry, energy and transport sectors because of the fossil-fuel based economy, the methane emissions from the farm sector are a matter of concern as well. So, there is this extra factor that the policymakers will have to take into consideration when discussing rice production.

Rice in Japan has also been a protected crop, and the outsiders have been pressing Japan to open up the agriculture sector to imports. With the Japanese restaurateurs opting for imported rice during a crunch like the present one, then it will open up the floodgates as it were.

Japan has been a mainly export-centric closed economy, with its own system of patronage linkages. The delicate balance that has been maintained with much skill faces real challenge. It does not come from the trade system but from the surprising corner of climate change. Drought can be episodic and cyclical even. But climate change and rising temperatures would be increasing on the linear scale. It requires a different kind of response.

The Japanese have been fiercely secluded in spite of becoming a major industrial power in the world. They do not compromise on their cultural mores. And rice is part of the Japanese culture. It is not just about consumption of food. It is this cultural dimension of the rice story in Japan that makes the economics of rice a complicated issue.