Record prices for rice are rippling through society.

By Eddy Duan

Japan does not have enough rice for sale, but no one can agree on exactly why.

Last year’s harvest edged higher, raising hopes that it would ease a tight supply. Instead, consumers are paying record prices this year, sparking frustration, finger-pointing and forcing the government to tap its emergency supplies.

The higher cost of Japan’s staple food, a mainstay of every traditional meal, has rippled through society. Consumers are furious as are sake brewers and restaurant owners. Some supermarkets limit how much people can buy. Elderly farmers in rural areas ship rice to their grandchildren in Tokyo and social media brims with conspiracy theories about the shortage. It has even had repercussions in the foreign exchange market, factoring into the Bank of Japan’s decision to raise interest rates in January, which boosted the yen against the dollar.

The country’s rice market is governed by a complex system under which farmers sell to so-called collection agents who then sell to wholesalers who in turn sell to shops and restaurants. Despite an increase of 180,000 tons of rice harvested last year, the collection agents are reporting a shortfall of 230,000 tons in what they have been able to buy. The agricultural ministry, which is tasked with keeping track of Japan’s most important crop, can’t account for the discrepancy.

“There is definitely rice,” said Taku Eto, the minister of agriculture, forestry and fisheries at a press conference on Feb. 21. “If you look at distribution as a whole, there’s a quantity that’s been stacked away and hidden somewhere, so that is causing a shortage.”

The price spike started in earnest last August when the government warned about the possibility of a devastating earthquake off the coast of southern Japan. Panic buying ensued and even after the warning was lifted, prices did not come down.

Rice farmers generally don’t earn that much, with their annual income averaging between ¥2.5 million ($17,000) and ¥3 million, according to the website agrijob, so the higher prices are a boon for them. While farmers typically sell to licensed collection agents, the government lifted most restrictions on who they can sell to in 2004. While there is plenty of speculation online about people driving around the countryside buying up rice, farmers say this is not the case.

“No one is acting behind the scenes with malicious intent,” said Takakazu Yagura, a rice farmer in Shiga prefecture. “There may be some middlemen who are stockpiling rice for speculative purposes, but no one can blame them for doing so. It is only natural for them to do business in this way.”

Price of Rice Surges in Japan

Consumers are feeling the pinch. The price for a standard 5-kilogram bag has jumped to an average of ¥3,952, 95% more than a year ago. Faced with the higher prices, Seven-Eleven Japan, the country’s ubiquitous convenience store, raised the price of both rice balls and bento lunch boxes in January. That’s feeding into overall inflation, which is rising at the fastest pace since the middle of 2023. BOJ Governor Kazuo Ueda has overseen three rate hikes in the space of a year and sustained higher prices could lead to additional increases.

“The price of goods as perceived by consumers is very important to the Bank of Japan, so the cost of rice can’t be ignored,” said Masato Koike, an economist at Sompo Institute Plus Inc.

Public anger over the cost of food was a factor in last year’s election which saw the ruling Liberal Democratic Party lose seats in parliament. The desire to give consumers relief influenced the government’s decision to release stockpiles for the collection agents to bid on.

That still hasn’t mollified Yutaka Ozeki. Shopping at a discount grocery story in Tokyo’s Tamachi neighborhood, where the shelves for rice were mostly empty with signs limiting purchases to just one bag per family per day, Ozeki opted for bread instead.

“I haven’t bought any rice recently because it’s gotten so expensive,” said Ozeki. “(Prime Minister) Ishiba is an idiot. The government is to blame for the high prices.”

Japan is an outlier. Globally, the price of rice has been dropping, with the Asian benchmark recently falling to the lowest since 2022. Deep-set preferences for domestic rice, heavy tariffs on overseas rice and the country’s convoluted supply chain have prevented imports from helping ease prices.

The first middlemen in the supply chain are the collection agents. They report to the government what they have bought and who they have sold it to. The biggest and most dominant is the JA Group, which buys about half of the rice in the market. There are tens of thousands of other agents, most of them small, local businesses that have long-standing relationships with farmers and buyers.

Competition has become fiercer, according to Hidemasa Ebihara, who runs a farming company in Tochigi Prefecture. Smaller agents typically would pay ¥300 to ¥500 more than JA for a standard 60-kilogram bag of unpolished rice. With the tightness in supply, they increased their premium they offered farmers to around ¥3,000 to ¥4,000.

“It shows how tight the rice supply has become,” said Ebihara. “This is going to lead to more independent distribution, with producers selling directly to consumers and restaurants.”

There is also doubt among farmers and collection agents about the government’s statistics on the 2024 harvest of 7.34 million tons. Given that last summer was the hottest on record in Japan, many producers complained that their yields were down and they thought it was likely that other farmers suffered the same difficulties.

“I don’t know who is hiding all the rice, but I think the actual amount produced was less than what was reported,” said Masato Takada, a farmer in Okayama prefecture. “There was a lot of damage from the high temperatures.” That sentiment was echoed by 77-year old Yoshie Machida, who said she’s been put off by the taste of Niigata rice because of the heat.

To address the shortages, the government is turning to supplies that it houses in special warehouses in case of crises such as earthquakes or tsunamis. It plans to sell 210,000 tons to make up for the missing amount, starting with a tender for 150,000 tons scheduled from March 10 to March 12. In total, the government has about 1 million tons of emergency supplies. Because demand is so hot, even the additional supplies might not bring down prices, according to Katsuhito Fuyuki, a professor at Tohoku University who specializes in agricultural market studies.

“The price is unlikely to change much since it’s a bidding system,” said Fuyuki. “What should have been done is to fix the price both for retail and restaurants.”

The government is addressing a problem that it helped create, according to Hiroshi Sakurai, the chairman of Asahi Shuzo, one of the country’s largest sake brewers. To win votes in rural areas, successive administrations have backed small farmers and have tried to maintain the price of rice by pulling land out of production, given the projected decline in demand from a shrinking population. Prices for fertilizer and pesticides have risen, further cramping profit margins.

Rice Farming on Decline in Japan

Source: Ministry of Agriculture, Forestry and Fisheries

“Japan and especially the agricultural ministry has created a situation where there’s no hope for rice farming,” said Sakurai. “Small-scale farming is not viable. We have to move toward large-scale farming.”

Despite its integral role in the Japanese diet and culture, rice farming has been in decline for years. The average age of a rice farmer is around 71 and the number of farmers has fallen by 25% between 2015 and 2020, according to the agricultural ministry. The pressure on farmers has been immense, said Hitoshi Mizutani, a production manager at the sake brewery Hakutsuru.

“Agriculture is weakening,” said Mizutani. “Farmers are leaving the industry. There will be long-term disruption in supply. Prices will have to keep rising.”

Published Date: March 12, 2025