New body launched to adjust rice supply-demand conditions

December 22, 2017

Tokyo- A new organization led by agricultural cooperatives was launched in Japan on Thursday for adjusting supply-demand conditions for rice, ahead of the abolition in fiscal 2018 of the government's "gentan" system for curbing production of the staple food for Japanese people.

The group will gather information on rice production status and demand across the nation.

As part of its activities, the organization is expected to call on farmers to increase production of rice for commercial use, which is currently in short supply, while encouraging food service companies to sign multiyear contracts for rice procurements.

But it is unclear whether the new group can produce intended results, because it has no authority to decide prefecture-by-prefecture production quotas, informed sources said.

The group is made up of the Central Union of Agricultural Cooperatives, or JA-Zenchu, which serves as its secretariat, and 15 other bodies, including those for "bento" boxed meal producers and retailers.

"We must ensure that the overhaul of the rice production adjustment system does not undermine the stability of the supply-demand balance and rice prices," JA-Zenchu head Toru Nakaya said at the new organization's inaugural meeting held the same day.

Under the gentan system, the government has so far set up rice production adjustment plans and decided quotas for each prefecture.

While domestic demand for rice has been falling, the government has successfully prevented the total rice planting areas in the nation from exceeding targeted levels for the third straight year, and rice prices went up as a result.

But there are concerns about oversupply in and after fiscal 2018 partly because subsidies for farmers cooperating to cut production are set to be scrapped in line with the abolition of the gentan system.

The new organization has asked wholesale and restaurant industry groups, which do not want to see a rise in rice prices, to join the group as full members. But the groups participated in the inaugural meeting as observers.

Amid conflicting interests among inaugural member groups, the new organization kicked off without deciding details of its activities and even its leader.

With some prefectures apparently making preparations to increase rice production in 2018, a senior official of the agriculture ministry said that "trials and errors are expected to continue for the years to come" in pursuit of an effective way to adjust the supply-and-demand balance. Jiji Press