What is the threat of the "rice crisis" in Japan? What you need to know
Japanese Agriculture Minister Taku Eto has resigned after scandalously claiming that he does not have to buy rice because it is given to him in large quantities. Prices for this grain in Japan doubled in a year, despite the fact that the government tried to cope with the shortage by supplying rice from government stocks. What the scandal threatens the government with and whether Japan will have to eat sushi without rice is in the Izvestia article.
The scandalous statement of the minister
• At a seminar of the Liberal Democratic Party in Saga Prefecture on May 18, Japanese Agriculture Minister Taku Eto stated that he did not have to buy rice because his party supporters supply him with cereals in such quantities that it can be sold. He also noted that unpolished rice from state reserves contains stones. The statement provoked a strong public reaction, and the opposition Democratic Party of the People said that the official should resign.
• The next day, he apologized and said that he had been reprimanded by Japanese Prime Minister Shigeru Ishiba. Although Isiba insisted on continuing the minister's work, he resigned on May 21. The Japanese Prime Minister said that former Environment Minister Shinjiro Koizumi, whom Ishiba appointed as the new head of the Ministry of Agriculture, will now deal with the rice crisis.
• As a result of the government's unsuccessful attempts to curb price increases, Isiba's rating has dropped to record levels since he took office in October 2024: 87% of respondents disapprove of the prime minister's work. Government support dropped from 32.6% to 27.4% in a month.
What's going on with rice prices
• Rice prices in Japan started to rise after a lean summer in 2023. In 2024, rice prices soared by 27.7% compared to the previous year. In March of this year, the cost of cereals increased by 92.1% compared to the same period last year, pulling down the prices of traditional Japanese products — rice balls and sushi. This is the fastest growth in the entire history of observations — since 1971. The average price of rice for May 5-11 reached a record 4,268 yen ($29) per 5 kg, compared with 4,214 yen in the previous week.
• The sharp increase in the number of foreign tourists also affected the price increase. In the first half of 2024 alone, more than 17.8 million people visited the country, and their consumption of rice in restaurants and sushi bars more than doubled compared to 2022 - 51 thousand tons against 19 thousand. Despite the fact that domestic rice consumption in Japan reaches 7 million tons per year, the influx of tourists has exacerbated the rice shortage in the country.
• To curb price increases, Tokyo began supplying grain from state reserves to the market — the reserve is about 910 thousand tons. In April, Japan began importing South Korean rice for the first time since 1999. Previously, it was considered expensive, but against the background of rising prices it turned out to be quite competitive. The government also expects to increase imports of American rice and soybeans. Tokyo was going to raise this issue at the negotiations on tariffs announced by US President Donald Trump.
• Last week, the Aeon supermarket chain announced that it would start selling American-made rice in June. A 4 kg package of rice will cost about 10% less than the Japanese equivalent.
• In the last fiscal year, which runs from April to March in Japan, it was the United States that became the leading supplier of rice to Japan, providing 45% of all grain imports. Another 37.3% were purchased in Thailand, 9.1% in Australia and 5.5% in China.
• Foreign supplies alone will not solve the problem of rising rice prices in Japan. The duty-free quota for rice imports, established by the rules of the World Trade Organization, is 770 thousand tons, and last year Japan approached this threshold by importing 767 thousand tons of cereals. Purchases over the limit are subject to a tariff of $2.4 per kilogram, which will inevitably affect retail prices.
Political consequences
• The rice scandal may affect the elections to the upper house of parliament, which are expected in July. Currently, representatives of the LDP and its coalition partner, the Komeito Party, make up the majority, but due to the scandal, the opposition Constitutional Democratic Party (KDP) has a growing chance of gaining wider representation in parliament: it has already managed to increase its representation from 98 to 148 seats in the October elections. At the same time, it is the parliamentarians who elect the Prime Minister of Japan.
The parliamentary elections in Japan in October 2024 were held against the backdrop of Japanese dissatisfaction with the state of the economy and inflation, as well as widespread discussion of the machinations of the leaders of the ruling LDP party with party funds. It was this scandal that forced former Prime Minister Fumio Kishida to leave his post.
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