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In Hungry World, Japan's Farmers Are Stuck With High-Priced Rice

By Blaine Harden
Washington Post Foreign Service
Friday, May 2, 2008

SHIRAKAWA, Japan -- When it comes to rice, Japan inhabits a strange and faraway planet.

Consumption of rice has been falling for nearly half a century, yet rice paddies still account for 60 percent of all farmland. Rice farms here are inefficient and tiny -- about 4,000 times smaller, on average, than rice farms in Australia. Yet Japan's harvest vastly exceeds domestic demand.

But what's truly otherworldly about this country's rice is its price -- especially in a year when the cost of Asia's staple food crop has exploded, causing hoarding, riots and hunger.

The price of rice on international markets has nearly doubled since January, to about $1,000 a ton. But it remains an absolute steal compared with rice grown in Japan, which costs more than $2,300 a ton.

Hiroto Endo, whose family has been growing rice for 10 generations, is struggling to make a living inside this weirdly warped market.

On his farm about 120 miles northeast of Tokyo, he and his son Ryoshi have just finished flooding fields to prepare for spring planting.

A quarter of last fall's crop, though, sits in his warehouse, unsold, even though it has won national awards for quality and taste.

"What we must do is raise demand from consumers," Endo said.

There was a tone of hopelessness in his voice, because the Japanese eat less rice with each passing year and international buyers continue to find the rice grown here to be insanely expensive.

As a long-term social policy, the government has largely protected rice farmers from imports, while keeping them on small farms with the help of subsidies. As Japan's cities boomed after World War II, the high price of rice helped send some of the wealth generated there to rural areas.

Japanese farmers produced 2.2 million tons of rice last year but exported only about 1,000 tons, which on the books of the world's leading rice exporters would be less than a rounding error. Thailand, for example, sold 9.4 million tons last year.

Even wealthy countries are put off by the price of Japanese rice. The United States imported just 128 tons last year, nearly all of which was purchased by Japanese restaurants, according to the Ministry of Agriculture.

"As far as our rice is concerned, we would like all the world to have some," said Masaaki Edamoto, director of rice policy planning at the ministry. He noted that Japanese rice has outstanding flavor, exceptional quality control and is raised mostly on family farms, which use less insecticide and chemical fertilizer than most farms elsewhere in the world.

"Unfortunately, we are not at a price level where we can sell it abroad," he said.

The reasons: small farms, expensive machinery and costly labor. Japan's rice problem, however, has little to do with price.

As in much of Asia, rice is much more than a food to the Japanese and it is not really intended for export. It is a traditional symbol of plenty and a cultural touchstone.

As Japan grew rich in the second half of the 20th century, the exorbitant cost of domestic rice (as measured by world standards) did not bother most Japanese. "I have not heard consumers complaining about the price of rice in this country," Edamoto said.

In fact, the price of Japanese rice is considerably lower than it used to be, having fallen by two-thirds in the past 14 years largely because of the surplus production of Japanese rice paddies. But again, cost is not what matters here.

What matters is what Japanese consumers want to put in their stomachs.

In 1965, 45 percent of all the calories in the Japanese diet came from rice, according to the Ministry of Agriculture. By 2006, 23 percent of those calories came from rice. In that time, per-capita annual consumption of rice fell from about 261 pounds to 134 pounds. The Japanese still eat six times as much rice as Americans, but considerably less than Filipinos, Indonesians or the Chinese.

Americans are partly to blame for the Westernization of the Japanese diet, according to Yoshio Yaguchi, a professor of agricultural economics at Tokyo University of Agriculture and Technology.

"After Japan lost the war, the Americans provided surplus food -- bread and milk -- to many young Japanese," Yaguchi said. "There were rumors in those days that rice made you stupid. School lunches included bread and the nation's taste buds were nurtured on a new kind of food."

More important, Yaguchi said, decades of rising incomes broadened and diversified the country's food culture. Japan now imports more of its overall food supply -- 61 percent by volume -- than any of the world's advanced economies.

The Japanese love of bread has made this country the world's fourth-largest importer of wheat.

It is the soaring cost of wheat -- which has roughly doubled in the past year -- that is creating headlines in Japan these days and causing consumers to howl.

To quiet the howling -- and to chip away at the chronic problem of finding uses for Japan's rice surplus -- the Ministry of Agriculture is considering using rice as a stand-in for wheat in making flour. Proposals call for substituting up to 20 percent of wheat imports with domestic rice.

But the plan has a serious drawback, said Edamoto, of the ministry's rice planning division. As much as the global price of wheat has increased, Edamoto said, flour made from Japanese rice is still too pricey to be a cost-efficient substitute.

Out here on the Endo farm, the government's rice-flour scheme offers little hope. Endo grows a premium organic rice that sells for as much as double the normal Japanese price. It is not remotely suitable for making flour.

In Internet postings, rice aficionados rave about the quality and taste of Endo's rice, and the government says niche markets for organically grown rice are showing signs of growth.

But a large slice of last year's rice crop still sits in Endo's warehouse, waiting for buyers.

"It is going to be a very tough year for us," he said.

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