The agriculture ministry set the 2015 national production target for rice for staple food at 7.51 million tons, down 140,000 tons from this year’s target. In addition to the national target, the ministry also announced a reference mark for voluntary acreage reduction efforts for the first time. The mark, regarded as a non-binding target for rice producing regions and a measure to encourage efforts to match supply with demand, is set at 7.39 million tons. In order to increase the effectiveness of the measures, it is necessary to create an environment for farmers to shift from rice for staple food to that for feed and other uses.
The ministry cites this year’s crop conditions and recent trends of decreasing rice consumption as reasons for reducing next year’s target by 140,000 tons. While the rice-crop index for 2014 is estimated at 101 as of Oct. 15, on par with a typical year, the production volume grew by 60,000 tons, even excluding rice grains too small to be marketed as staple food. Also taking into account that consumption of rice is declining by 80,000 tons every year, the government reduced the production target from 7.65 million tons last year.
Meanwhile, we cannot ignore the ballooning private inventories. Inventories at private companies declined by 40,000 tons in a year until the end of June this year, but maintain a high level of 2.2 million tons. Rice stocks are predicted to reach 2.3 million tons in June next year. Three consecutive years of inventories exceeding 2 million tons could have an adverse effect on rice prices next year.
In its action plan to revitalize agriculture, forestry and fisheries, the government states that starting with rice produced in 2018, it will encourage farmers and dealers to produce rice depending on demands rather than production volume targets allocated by authorities. The government will create an environment for farmers to smoothly shift to the new system in the coming three years, through such measures as setting a reference mark for voluntary acreage reduction.
The ministry admits that the government’s production volume allocation system has prevented farmers from gaining momentum to conduct marketing themselves and strategically decide on the production volume of rice for staple food and that for other uses. In order to further facilitate production cuts, the government will allocate 5,000JPY per 10 ares as a benefit to prefectures which managed to reduce production further than the target volume.
The reference mark of 7.39 million tons is 120,000 tons less than the production volume target for 2015. Each prefecture is left to decide by its own whether to cut production or to what extent. Since it is dependent on voluntary efforts, it is unclear whether the supply-demand balance can be achieved.
The idea, submitted to the food committee of the ministry’s Council of Food, Agriculture and Rural Area Policies on Friday, Nov. 28, will be conveyed by the ministry to farmers nationwide. Representatives of producers’ associations said they evaluate the reference mark as one of the indicators, although adding that it is important to make sure the reference mark does not become a virtual target. Producers also expressed concern over the policy shift scheduled for rice grown in 2018 amid falling rice prices. Since the safety net under the new framework of measures to stabilize farmers’ production and income has weakened starting with rice grown this year, farmers say they are worried if they can foster successors who will engage in rice farming four years from now.
In order to increase the food self-sufficiency rate by utilizing rice paddies, public authorities and producers should together work on expanding demand for rice for feed and rice flour. The system to encourage voluntary efforts should be shown to farmers in an effective and convincing way.
(Nov. 29, 2014)