Deliberations on the FY2025 supplementary budget have begun. The government has earmarked 2 trillion yen for the Priority Support Local Allocation Grant as funding to allow local governments to implement measures against rising prices at their own discretion to reflect local conditions. Eligible uses of the grant include illustrative measures such as easing the burden of soaring food prices; reducing the cost of essential living infrastructure such as electricity, gas, and water for low-income households and others; and addressing higher energy costs and facilitating wage increases for SMEs, particularly the smallest businesses. While these measures target both households and business operators, the one drawing particular attention is the “nationwide rice voucher” program, which the Ministry of Agriculture, Forestry and Fisheries (MAFF) is encouraging municipalities to adopt.

However, the rice voucher program has proven unpopular. The reasons are the high handling fee—only 440-yen worth of rice is available in exchange for a 500-yen voucher—and the cumbersome administrative costs required. That said, the real issue lies elsewhere. At his inaugural press conference on October 22, Agriculture Minister Norikazu Suzuki referred to the distribution of rice vouchers as a measure to counter rising prices. He went on to state that “rice production should, as a fundamental principle, be aligned with demand.” This remark, in effect, serves as an endorsement of retail prices that have risen sharply and represents nothing less than a shift away from the previous administration’s policy of increasing production to keep prices in the 3,000-yen range per five kilograms.

Amid the recent rice turmoil, claims circulated widely that 210,000 tons had been stockpiled for speculative purposes as if they were established fact. In reality, however, supply shortages of approximately 400,000–500,000 tons occurred in 2023/2024.^*1 followed by shortages of 200,000–300,000 tons in 2024/2025. The Ministry of Agriculture, Forestry and Fisheries (MAFF) summarized the causes of the shortage as demand forecasts premised on a declining population trend, coupled with a failure to take into account factors such as reduced rice yields in the milling process (as of August 2025). Back in 2018, the government abolished the system for allocating rice production targets, known as the rice paddy acreage reduction policy. At the same time, however, it increased crop conversion subsidies and introduced “indicative production targets” based on demand forecasts. These indicative production volumes were conveyed as information through administrative channels, from prefectural governments to agricultural organizations in production areas, and ultimately to individual farmers. In short, rice production controls aimed at preventing price declines have been preserved in a different form. The recent rice turmoil has thus exposed distortions inherent in this system.

The issuing bodies of rice vouchers are the National Federation of Agricultural Cooperative Associations and the National Federation of Rice Wholesalers’ Mutual Aid Cooperative Associations. Mr. Suzuki, a former MAFF bureaucrat, has his political base in Yamagata Prefecture, known for its branded rice varieties such as Haenuki and Tsuyahime. At a press conference on December 9, when questioned about suspicions that he was steering benefits toward agricultural organizations, Mr. Suzuki denied the allegation outright. I sincerely hope that is the truth. By contrast, the policy of adjusting production volume according to the government demand forecasts runs directly counter to the idea of allowing the market to determine rice prices. At any rate, it is a fact that price maintenance policies have failed to halt the decline in full-time rice farmers and the shift away from rice consumption among consumers. From the perspective of food security, income compensation for staple food producers is also an option. Based on an exhaustive review of postwar agricultural policy, a system with a ten-year horizon should be examined.

[Related Article]

“The Retail Price of Rice has Doubled: Time to Break Free from the Acreage Reduction Mindset | Yano Research Market solution provider,” This Week’s Focus, March 16-27, 2025

Note *1: For data of domestic rice, each year begins on July 1 of that year and ends at the end of June of the following year. (according to the data released by MAFF)

This Week’s Focus, December 7-11, 2025
Takashi Mizukoshi, the President