Japan’s farm minister said he has never had to buy rice. That cost him his job

Japan’s farm minister Taku Eto stepped down on Wednesday, domestic media reported, following public outrage over his comments on getting free rice.

Eto said on Sunday that he has never had to buy rice as he received ample amounts of the grain as gifts from supporters — a comment that struck a nerve with locals struggling with rocketing prices of the beloved staple.

Japan has been grappling with soaring rice prices for months as inclement weather and the country’s long-held policy to protect local farmers’ interests crimps supplies.

Taku’s resignation comes at a time when Prime Minister Shigeru Ishiba’s government has been grappling with low approval ratings ahead of a pivotal Upper House election this summer and ongoing tariff negotiations with the U.S. NHK World reported that former Environment Minister Koizumi Shinjiro will succeed Eto.

Ishiba’s cabinet approval rating dropped to an all-time low of 27.4%, as voters grow increasingly discontent with the administration’s failure to address soaring rice prices and rejection of consumption tax cuts in response to rising inflation, according to a Kyodo News poll released Sunday.

While Japan’s agriculture ministry has been trying to curb soaring prices by releasing government stockpiles, the move has yielded little effect in reining in prices.

Rice prices in around 1,000 supermarkets nationwide reportedly climbed to all-times high in the week ending May 11. Prices for a 5-kilogram bag of rice rose 54 yen week-on-week to 4,268 yen ($29.63)

“Following Japan’s rice shortage and subsequent high prices in summer 2024, prices have continued to soar, despite the arrival of the new domestic crop and record imports,” the U.S. Department of Agriculture said in a March report.

The spike in rice prices reflects the lingering effects of poor harvests last year, with domestic rice consumption being overwhelmingly supported by local production rather than imports, said HSBC’s chief Asia economist Frederic Neumann. 

Straining the supply side issue is the fact that rice in Japan is produced mostly by elderly people running small farms, so they’re not very efficient, said Sayuri Shirai, a professor of economics under Keio University’s faculty of policy management, who added that the number of farmers are also dropping with the ageing population.

“Japanese like Japanese rice. They don’t really like foreign rice,” she said. Japan’s rice economy remains fairly isolated from the world market, with stiff duties on imported rice aimed at protecting its rice farmers.

To make matters worse, demand for Japanese rice has skyrocketed on the back of high tourist footfall, the professor noted. 

The sharp increase in rice prices is also partly attributable to panic-driven hoarding by both households and businesses, said Takuji Okubo, chief economist of the Japan Risk Forum.

While some retailers announced plans to import rice, unfamiliarity with imported rice among both consumers and businesses makes it unlikely that such imports will meaningfully alleviate the supply-demand imbalance, he told CNBC.

Japan’s inflation rose 3.6% year on year in March. Although the figure was lower than the 3.7% seen in February, it still marked three straight years that the headline inflation figure has remained above the Bank of Japan’s 2% target.

“That is very high compared to the U.S. or Europe,” said Shirai, who added that Japan’s inflation picture has more to do with cost pressures that are mostly derived from food prices. “That is why a lot of consumers are very angry,” Shirai said.

Additionally, the cheap yen also makes food imports expensive, she noted.

Japan imports about 60% of its food supply, according to food sourcing and data hub Tridge. The country also has a food self-sufficiency rate of 38%, compared with the government’s target of 45% by fiscal 2030.