An Economic Analysis of a Turmoil Caused by Rice Shortage (Japanese)

In 2024, there was an uproar over the disappearance of rice from supermarket shelves. This was triggered by a decrease in supply due to a drop in milling yield caused by the extremely hot summer and an increase in demand due to inbound consumption, among other factors. The root cause of this uproar, however, is the policy of reducing rice acreage (production adjustment) which has been in place since 1970. The Ministry of Agriculture, Forestry and Fisheries (MAFF) refused to acknowledge the rice shortage and did not release rice stockpiles. The decrease in supply due to the heat wave and the increase in inbound consumption are only marginally significant in terms of the total amount of rice supply and demand. This paper explains why it caused a large price increase. We will also provide an explanation as to why there was a quantitative shortage of rice during the between-crop season, when prices should adjust to supply and demand in the case of agricultural commodities. Abolishing rice acreage reductions would also make exports possible. If exports were undertaken like in grain exporting countries such as the U.S. and the EU, a situation such as the 2022 rice market panic could easily be avoided by adjusting (reducing) export volumes even if domestic consumption increased or production decreased. This paper analyzes the reasons why the rice acreage reduction policy was used as a means of agricultural protection and explains that this is a policy that cannot be justified from a national economic perspective.