Release the Rice (III)
JAPAN'S RICE mountain is a monument to the irrationality of economic protectionism. Rice-growing in Japan is notoriously inefficient. But it is also the source of income for a powerful political constituency, so the country blocks consumers from eating imported rice. As a sop to the United States and other producers, each year Japan imports some rice, which it stores in warehouses. As of April 1, the stockpile had accumulated to 1.3 million metric tons, enough to feed more than 20 million Japanese for a year.
Japan's hoarding turned scandalous earlier this year when the price of rice soared to record levels, causing suffering and political unrest across Asia. In May, Japan took what appeared to be a positive step, announcing that it would sell 200,000 metric tons of rice to the Philippines, one of the countries hit hardest by the price spike. Tokyo also pledged a donation of 20,000 metric tons to five African nations.
We applauded these moves -- but we may have spoken too soon. Three months later, Japan has not released a single grain. The sale to the Philippines has not happened because the two countries are still haggling over price. Nothing more has been heard on Africa donations; a spokesman for the Japanese Embassy in Washington told us that he had no details. Meanwhile, Bloomberg News has reported that Japan is considering selling 600,000 metric tons of the rice to its own farmers for use as animal feed.
The urgency of the issue has eased since last we wrote about it, because rice prices have gone down, from nearly $1,100 per metric ton in April to about $735 today. The drop reflects not only an overall decline in commodity prices, led by the plummeting price of oil, but also reduced export controls in other Asian countries and the salutary psychological impact of Japan's apparent willingness to sell its surpluses. Still, poor Filipinos are paying far more for rice than they did a year ago, and they need all the help they can get. Japan should promptly close a favorable deal with Manila and expedite donations of its imported rice stockpile to hungry people elsewhere. And it must abandon its costly, wasteful protectionism -- sooner rather than later.