Why are rice prices soaring in Japan? After covering the issue for nearly a year since last summer, I think I now know the real answer to this fundamental question.

"I have never bought rice myself. I have enough to sell," then agriculture minister Taku Eto flatly said before a large audience in mid-May.

His remark came just as people were struggling with high rice prices, such as a mother lamenting over being unable to give her fast-growing son another serving of rice, or an elderly person who couldn't afford a 5-kilogram bag of rice and tried to get by with just a 2-kg pack, and a diner operator tearfully complaining about being unable to serve any more rice despite wanting to let students eat to their hearts are content.

The head of Japan's rice administration has not felt the pain of each and every member of the public as his own. This is precisely why the abnormally high rice prices have been left unaddressed.

Is farm ministry not wanting to lower prices?

Many experts believe that things wouldn't have turned out this way had the government released sufficient stockpiled rice last summer when the rice panic broke out. They argue that if the supply and demand of rice was stable, there wouldn't have arisen confusion stemming from a sense of urgency.

Nevertheless, the agriculture ministry was reluctant to release stockpiled rice. It wasn't until March this year, when rice prices almost doubled from last year, that the ministry finally began to release reserve rice. It is said that the move came only after the prime minister's office pressured the ministry at the behest of Prime Minister Shigeru Ishiba.

Even after releasing stockpiled rice begrudgingly, the farm ministry set a variety of conditions for its distribution. Normally, rice is passed from farmers to collection agents, wholesalers and then retailers before finally reaching consumers. If rice was supplied to retailers from the beginning, it would have saved time and costs, but the ministry went out of its way to deliver more than 90% of the released reserve rice to the National Federation of Agricultural Cooperative Associations (JA Zen-Noh), which acts as collection agents.

Consequently, stockpiled rice remained unavailable no matter how long we waited. Of the two rounds of the release of stockpiled rice since early March, just around 10% had reached retailers by the end of April. While the ministry attributes it to labor shortages and other factors, it is beyond belief that this is what is happening in one of the world's most advanced nations in this age of information technology.

After all, the farm ministry led by Eto had no serious intention to lower rice prices by boosting circulation. One could call it a deliberate blunder rather than a lack of strategy.

Eto's successor Shinjiro Koizumi is urged to break away from the past agricultural administration that can hardly be said to have faced up to consumers. In this effect, Koizumi's decision to sell stockpiled rice to retailers deserves credit.

In the meantime, the new minister wants to have reserve rice sold at stores for around 2,000 yen (approx. $14) per 5 kg, half of the current average for rice prices, by switching the sales method from general competitive bidding to negotiated contracts. He apparently aims to curb overall rice prices through the low-price effect. This strategy, however, begs questions.

Kazuhito Yamashita, research director at The Canon Institute for Global Studies, who is well versed in Japan's rice policy, noted, "As the volume of stockpiled rice is limited, even if it is sold for 2,000 yen per kg over the counter, it only means some people get lucky to buy it at a good price. Rice prices are determined by supply and demand. Unless the overall supply increases, the price levels of rice as a whole will not go down."

If they seriously want to lower rice prices, there is only one way, according to Yamashita. "That is to temporarily increase imported rice, through such means as boosting rice for staple use in the 'minimum access' quota for non-tariff imports and drastically lowering rice tariffs of 341 yen ($2.36) per kg for just one year. If imported rice increases through these measures, rice prices will surely drop."

Long-standing rice reduction policy must be stopped

Whether Japan is really ready to go that far will come under the spotlight moving forward. But above all else, the primary step to be taken is to boost the supply of domestic rice. Japan has no other choice but to stop the rice acreage reduction policy that has in effect been in place for over half a century.

Under the controversial policy, rice production is trimmed to raise rice prices. It is said that the primary background to the current rice price surges is the shortages triggered by overreduction of rice produced through this adjustment policy.

This policy has discouraged farmers and driven more of them to quit farming, leaving rice paddies ruined as a result. It has also taken a toll on consumers by having them buy rice at hefty prices. By reducing the amounts of the only grain that can be supplied domestically, the government has undermined Japan's food security and even national defense. This policy is no longer in step with the times.

Prime Minister Ishiba and farm minister Koizumi recently announced that the government will halt the acreage reduction policy and turn to boosting production. If the policy shift is realized, it will mark a major turnaround in the nation's rice policy. Both Ishiba and Koizumi have attempted to reform the farm policy before, but gave up after facing resistance from Liberal Democratic Party lawmakers lobbying for the agricultural and forestry industries. "Yet many people have now realized that the rice reduction policy is wrong. The situation is different from before," Yamashita points out. Japan faces a golden opportunity to transform its farm administration.

If the government is to earnestly scrap the reduction policy, it is also necessary to introduce a system to support farmers who have strived so hard to produce rice. Will Ishiba and others be able to make a bold decision to reform agricultural policy to create an environment where farmers can produce rice with peace of mind and consumers can secure rice enough to fill their stomachs? Or will politicians end up giving lip service in the runup to this summer's House of Councillors election? We must carefully follow up on the fate of this issue.

(Japanese original by Megumi Udagawa, Opinion Editorial Department)