2010 October 20 - 26 TOP3 [
AGRICULTURE]
Does ‘cheap rice’ benefit the public?
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October 20 & 21, 2010
The price of rice has been dropping sharply. The financial circles and some media in Japan are trumpeting, “Consumers are happy with the ‘cheap rice’,” and “The low price of rice works to enhance Japan’s international competitiveness and enables market liberalization, which will result in benefiting the public.”
From a global perspective, the price of rice in Japan is certainly high. It is because Japanese rice farming is subject to completely different natural, geographical, and social restrictions compared to other countries.
“Don’t be so serious about a decline in the price of rice! The government will ‘compensate famers’ income’,” government representatives and free-market advocates are both proclaiming in chorus.
Let’s say that the government provides “income compensation” to individual family farmers and sets the price of domestically-produced rice to the same level as foreign rice. It will not function at all as a brake to prevent a further price cut. It will rather accelerate the decline of the rice price. What is more, it will end up in a catastrophe for family formers in Japan caused by a massive flow of foreign rice into Japan.
Is the government going to worsen the country’s food self-sufficiency rate by leaving Japan’s staple in the hands of other countries? And they claim this “benefits the public”?
It is true that many consumers are now experiencing hardships and seeking to buy the cheapest products possible.
However, the “cheapness” has a negative impact on family-run farmers, discouraging potential successors to continue growing rice and leading to a collapse of farming villages.
The Democratic Party of Japan government partially started the “income compensation” program this year. It ensures a payment of 13,703 yen per 60 kilos of rice to individual farm households, but this standard is below the level of 16,500 yen, which is the amount farmers actually need to produce 60 kilos of rice. The program provides uniform compensation throughout Japan, no matter where the rice is grown. If they are in a region which requires higher production costs, they cannot escape going into debt.
Many farmers and agricultural organizations are calling on the government to buy out the surplus crop in order to prevent the price of rice from falling into a nosedive. The government, however, has refused to purchase the surplus rice on the grounds that it is implementing the program to “compensate individual famers’ incomes”.
Because of the excess amount of stocks of rice, rice retailers refrain from buying rice in expectation of a further fall. Rice producers want to quickly dispose of such stocks and they try to sell off at a cheaper price, amounting to a price-cut war.
Thus, a continuous decline in the price of rice is equivalent to a continuous decline in farmers’ incomes, helping to widen the gaps between the cost required to produce rice and the income they receive for it. The government’s “income compensation” program will not work.
The Japanese Communist Party is demanding that the government immediately buy out the surplus rice of 40 tons to hinder a steep drop in the price of rice. The party is also urging the government to secure 18,000 yen per 60 kilos as a price guarantee and an appropriate level of income compensation.
To ensure the price of rice capable of protecting farm families is the same as safeguarding the Japanese staple. This is what the “benefits the public” should really mean.
- Akahata, October 20 & 21, 2010
