Japan Proposes a 4.6% Reduction in the Price It Pays to Rice Farmers

TOKYO â€”  The Japanese government has decided to lower the price it will pay farmers for rice this year, a government spokesman said Wednesday.

After a heated debate, the governing Liberal Democratic Party and the Agricultural Ministry decided to recommend that farmers be paid $128 per 132 pounds, 4.6% less than last year’s price, Chief Cabinet Secretary Keizo Obuchi said.

The price will be proposed to the Rice Council, which advises the agriculture minister, he said. The council will consider the proposal and make its recommendation to Agriculture Minister Takashi Sato for a final decision.

Government officials said the council and the minister usually approve the proposal within a few days because it reflects consensus within the party and government.

Distribution of rice in Japan is controlled by the government, which buys rice from the farmers and releases it to the market as needed. Thus, the price paid to farmers determines the consumer price as well.

The government was also reported Wednesday to have approved a new method of calculating the producer’s rice price. The Agriculture Ministry says the current method, which considers all farmers in calculating the price, sets too high a figure.

Beginning next year, it is expected that the ministry will use only farms of more than 3.7 acres in calculating the price.

“Because large farms are more cost efficient,� said Isoshi Kajii, an agriculture professor at Tokyo Agriculture and Engineering University, “the new method will enable the government to reduce the rice price further.�

Observers said the move will also encourage amalgamation of Japanese rice farms and more efficient use of the country’s limited amount of arable land.

Kajii said the government delayed introducing the new measure for one year as a “political move to tame the anger of farmers,� who opposed Japan’s recent opening of beef and citrus markets to the United States. Also, the price reduction announced Wednesday was smaller than had been expected, which was interpreted as another effort to pacify the farmers.

In fiscal 1986, Japanese farmers produced 11.6 million tons of rice, while the Japanese people consumed only 10.8 million tons, according to the Food Agency.