Japan. Group to be established to prevent oversupply of rice

30.11.2017

Japan’s ruling Liberal Democratic Party adopted a proposal on Tuesday for establishing a private sector-led national organization that will collect supply-demand information on rice to prevent an oversupply.

The decision reflects worries about an excessive supply of rice after the abolition of the government’s decades-old “gentan” rice production adjustment system in fiscal 2018, which starts next April.

The new organization is expected to be set up by the end of the year, at the earliest, LDP sources said.

With no binding power, however, the organization may have difficulty playing an effective role in coordinating supply and demand, some experts said.

Under the proposal, the envisaged organization will be joined mainly by the Central Union of Agricultural Cooperatives, or JA-Zenchu, rice wholesalers and associations of restaurant operators and exporters, the sources said.

Regarding low-priced rice sought by restaurant operators, the new organization is expected to encourage such businesses to conclude purchase deals with farmers before harvesting or multiyear agreements.

The government plans to provide the organization with information held by local governments on rice planting. The new organization is also expected to gather information on production benchmarks to be indicated to farmers by prefecture-based groups.

Launched on a full scale in 1971, the gentan policy has set targets by prefecture of the acreage under cultivation for rice as staple food in order to prevent rice prices from falling due to overproduction.

The JA group has called for nationwide supply-demand adjustment after the targets are abolished in fiscal 2018, along with subsidies of ¥7,500 per 10 ares of rice fields paid to farmers who work in line with the targets.

In 2013, the administration of Prime Minister Shinzo Abe decided to end the state output control system as early as fiscal 2018.

Since fiscal 2014, the government has urged farmers to make rice for animal feed, instead of rice for human consumption as staple food, offering massive subsidies.

The initiative has successfully reduced the acreage of fields for rice as staple food, preventing excessive planting of such rice for three years in a row from fiscal 2015.

But there are concerns that Japan may see a surplus of rice again in fiscal 2018 and beyond due to the planned scrapping of the state-set production targets, people familiar with the matter said.

In the Oct. 22 election for the House of Representatives, the LDP pledged to help create a national organization to promote rice production in line with demand after the abolition of the gentan policy.

At an agriculture-related meeting of the LDP on Tuesday, participants pointed to strong concern in rural areas over the reversal of the policy that has been in place for more than 40 years. They agreed to do all they can to secure a budget for policy steps to dispel worries among farmers.Speech


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