Rice Distribution Review Seeks to Lower Prices; Cutting Intermediary Margins through Contracts

By Haruna Fukushima and Hiroyuki Sato / Yomiuri Shimbun Staff Writers

17:47 JST, May 24, 2025

Agriculture, Forestry and Fisheries Minister Shinjiro Koizumi has set a target of making the government’s stockpiled rice available in stores at around ¥2,000 per 5 kilograms from early June.

Koizumi aims to realize a significant cut in price from the current ¥4,000 level by revising the method of sale and delivery from those done through public bidding to be handled with discretionary contracts.

To achieve this, he must drastically review the method of rice distribution, putting his ability as “minister in charge of rice” to the test.

“We must create an environment in which stockpiled rice can be sold in stores at the ¥2,000 range in early June.”

Koizumi stated his resolve to reporters after having visited stores in Tokyo on Friday to personally see empty shelves and increased prices.

The release of government-stockpiled rice, conducted three times since March, was done through public bidding.

Through this method, the contractors offering the highest price, exceeding the undisclosed, lowest-selling set price, won contracts. This sent the price further upward.

With the expected contracts this time, the government is considering setting the price to distribute it below market price.

By selling rice directly to major retailers, the government aims to hold down its price by eliminating intermediary margins for collectors and wholesalers, such as the National Federation of Agricultural Cooperative Associations (Zen-Noh).

By not going through wholesalers, it could help prevent rice from becoming stuck in the distribution stage.

Since the government’s stockpiled rice is considered national property, it must be released through selling procedures in accordance with the Public Accounting Law and Public Finance Law.

Under the Public Accounting Law, contracts, in principle, shall be concluded through public bidding on terms most favorable to the government. But, if there is an urgent need to do so, the government is allowed an exception to conduct discretionary contracts.

“It is a judgment by politicians,” said Koizumi on Friday, indicating exceptional measures would be allowed for the sale of government stockpiled rice in order to promptly reduce prices.

Koizumi said, “I’ve talked with the Finance Ministry and confirmed the use of this [fixed] price.”

Thus far, more than 90% of the stockpiled rice sold through public bidding was contracted through the Zen-Noh Group.

It is expected, through future contracts, stockpiled rice chiefly will be sold directly to major retailers in place of parties such as the Zen-Noh Group.

Koizumi emphasized, “If the current form of distribution remains unchanged, the product will not reach stores. I hope new players will also participate in the distribution of rice.”

However, there are several hurdles to clear before stockpiled rice can reach store shelves at a ¥2,000 level per 5 kilograms.

For example, it will be necessary for successful contractors to handle the transportation and milling of rice on their own. These are tasks which have, to date, been handled by collectors and wholesalers.

Should such contractors bear the cost of transporting rice from warehouses to stores by truck, they may end up in the red. Therefore, the government is considering covering the cost of delivery.

Kunio Nishikawa, a professor at Ibaraki University, said, “The government has so far taken a stance of not being involved in setting the price of rice. As it certainly will be involved now, this will become a turning point.”

He added, “An explanation will be expected in terms of fairness and transparency. As long as it [the government] intervenes in price setting, it will also be necessary to clarify an exit strategy, such as the timing and criteria for when it [the intervention] will end.”