Japan is having a rice shortage.
Rice is more than a staple in Japan; it’s an essential food. It’s like beer to Germans or vodka to Nancy Pelosi. Way back in the 7th century, rice even functioned as currency in Japan. Japan consumes about 7 million tons of rice a year, and normal-sized households buy rice in 20-pound sacks.
Some Japanese are having to go to half a dozen or more stores before they can find rice. There are some reasons being floated around for the sudden lack. Some are more plausible than others:
- A recent earthquake caused a spate of panic-buying, which depleted the normal supply.
- Social media posts have scared people into overbuying or hoarding rice.
- Foreign tourists are eating it all up.
- The 778% tariff on rice imposed by Japan to keep foreign rice off the market has caused shortages.
- The Japanese Communist Party (yes, there is such a thing) is bashing the government for causing or at least not preventing the rice shortage.
- Extreme weather has taken its toll on the rice harvests of the past few years (this year, the harvest was down 20%).
- Japan is transitioning to a new breed of more heat-resistant rice, and this is a production gap.
- Japan has been reducing the acreage it devotes to farmland, and that means less rice.
Japanese buyers are asked to remain “cool-headed,” avoid panic-buying, and buy no more than what they need.
While this issue is not being covered much by American news, those who know people in Japan confirm that the shortage is real and very concerning to the average Japanese citizen, who is having trouble staying cool-headed. The big question now is, how long it will last? The next rice harvest occurs this fall, and it is hoped that this will at least put more rice on the shelf.
The problem is that Japan is changing, and, like a lot of us, Japanese systems do not like change. Rice production dropped in 2024 to the lowest level in 25 years, and, as we all know from Economics 101, decreased supply means increased prices. And that’s the other problem — rice costs 18% more per pound than it did just a year ago. But right now, many would gladly pay premium prices to get the staple.
The Japanese Agriculture, Forestry, and Fisheries Ministry says it has gotten hold of private-sector supplies, and the supply of rice is adequate. The ministry blame wholesalers who are buying more rice than usual to ensure that the hospitality and restaurant industries (which are booming right now, by the way) have enough rice. So it’s not price-gouging, as Kamala Harris and Liz Warren would argue; it’s tourists eating the Japanese out of house and home. By the way, the influx of tourists is being driven by the weak yen, making Japan a very affordable destination right now.
Perhaps paradoxically, Japan is eating less rice than it used to. In fact, it consumes about 100,000 tons less rice each year, year over year, because the Japanese population is getting smaller and getting older.
Nevertheless, Japan remains a food-obsessed nation. Just think of this: Tokyo has 137,000 restaurants. New York City only has 27,000, Paris has 38,000, and even Shanghai, China boasts only 60,000. Despite their love of food, Japan produces only about a third of its own food (37%) because the nation is small and much land is not suitable for agriculture.
So where does Japan get its food? Most of it is imported, which works well as long as Japan has the cash and the supply chain is functioning. Things used to work. But now the yen is down, so food prices are way up. Supply chains cracked during COVID, and nobody knows if global tensions are going to weaken them further. Japan is located close to North Korea and China, two volatile countries.
Add to this the fact that Japan has a somewhat ossified political structure. The Liberal-Democratic Party (LDP) has been in power almost continuously since 1955, which is longer than most of us have been alive. The LDP clings to power the way a barnacle clings to the bottom of a ship. It is almost unthinkable to imagine Japan not being run by the LDP.
Japan has a parliamentary system, so there are literally dozens of political parties, most of which have scant power and few votes. Some of these fringe parties have funny names, like the Metaverse Party, the Smile Party, the Wake Up the Japanese Party, the Children’s Party, and the “Party to Realize Bright Japan with a Female Emperor” party. But none of these has much clout against the heavily entrenched LDP.
Voters get frustrated, but nobody does anything.
Prime Minister Fumio Kishida of the LDP is leading Japan and adhering to the political strategy of “but we’ve always done it this way.” But the world has changed. China is rattling sabers. North Korea is talking nuclear war. India is emerging as a world power. New global alliances are being forged. Some food exporters are skipping Japan in favor of China. Japan has not subsidized its local farmers during the pandemic to the extent that other nations have, and agriculture has faltered. In fact, Japan spends more money on defense than agriculture. And speaking of culture, Japan’s culture changes quickly with respect to fashion and technology, but it moves at glacial speed everywhere else.
Japan is going gray faster than Kamala Harris. Although it’s number 11 in terms of national populations, with 126M people, Japan is losing population year over year. This sort of trend shifts the median age up, and it’s now 49.5 years. That means half of the nation of Japan is over 49.5 years and the other half is under. (Median age in the United States is 38.8 years, more than a decade younger.) Only Monaco has an older median age than Japan, and there are maybe a dozen people living in Monaco. Life expectancy increases — although a good thing generally — have contributed to demographic inversion. Japan has one of the highest life expectancies on earth at 85 years. The birth rate is falling, further driving up the age of the population. Since Japan has very low immigration numbers, the nation is losing people and, simultaneously, changing its demographic profile. But it wants to do things the way it’s always done things.
Japan has a small number of immigrants. The Japan Times says that there are about 2 million “foreign workers” in Japan, and one of the main jobs they fill is caregivers to seniors along with farm workers, construction workers, and factory labor. Japan has had a labor shortage since about 1995 and will have to import even more workers to keep pace with open jobs. This may mean up to 7 million foreign workers by 2040. But even though Japan needs foreign workers, it really doesn’t like them. Anecdotal accounts of racism, prejudice, on-the-job harassment, and social ostracism are common.
About two thirds of Japanese business face such chronic labor shortages that many small businesses file for bankruptcy, citing labor constraints. Still, Japan is very concerned about letting too many foreigners into the country, worrying about crime, security, and order.
The rice shortage may just be the canary in the coal mine. Japan is encountering unforeseen and uncomfortable problems, just like the rest of the world. Old-school economies aren’t working as we thought they would. Population demographics are changing, and not in ways we expected. Solutions to problems, such as importing more food or allowing more immigration, bring with them other new problems. Longevity is a good thing, except when there is no offsetting younger population. People — even the normally orderly and compliant Japanese — are increasingly restless, as it is evident that government cannot solve all of these problems. In fact, it may be dawning on the Japanese that the government may be causing a lot of these problems.
The president of Japan must be elected from the majority party or the LDP. This September 27, 2024, Japan will elect an LDP president for a three-year term. Prime Minister Kishida, who was expected to run for president, just dropped out of the race in mid-August 2024. Kishida claims that scandals have caused a lack of trust in his administration, and he sees no alternative but to step aside. In this next election, only LDP members get to vote — that’s a little over 1M people. There’s no clear frontrunner at this time, and many people are hoping a female candidate will emerge. (Doesn’t all of this sound so familiar? Old man drops out, woman emerges as next candidate…)
As a politician, Kishida was well respected in international relations, he boosted the defense budget, and he had a good relationship with the United States (he spent part of his childhood in New York City). On the other hand, Kishida was facing domestic problems, including inflation, a weakened yen, and loss of consumer confidence. That also sounds familiar. His approval rating was underwater, and the LDP has experienced some scandal. Compared to American political scandals, these are small potatoes. One of the biggest involves a $4M scam, which is approximately the amount of laundered money you can probably find under the cushions on Hunter Biden’s sofa.
Kishida launched his campaign by trying to jumpstart “a new capitalism,” which is based on redistribution of wealth, so it’s actually “old socialism.” The announcement immediately caused a stock market crash, which caused Kishida to change course and say his “new capitalism” would be based on investments, research and development, technology, and green transformation. Not even Kamala can switch policy as fast as Kishida. So Kishida’s dropping out of the presidential race may have more to do with a lack of popularity than a $4M scandal.
And to be fair to Kishida, these are tough times of unprecedented change for a nation like Japan, which seems to prefer to stay frozen in time. The small population of young voters in Japan expresses little interest in politics or international events. As unpopular as the LDP is right now, the marginal parties are unpopular as well and likely not equipped to navigate the turbulent changes ahead.
The bulwark of Japanese politics — stability, homogeneity, strong work ethic — is faltering. The nation is changing, shrinking, growing older. Japan seems curiously oblivious to things that concern other nations, such as greater representation of women and minorities in government, equal opportunity, immigration, and economic transition.
Japan has multiple simultaneous problems: demographic shifts, rice shortage, falling yen, labor shortages. None of these problems occurred suddenly, but it is the abrupt and unexpected shortage of rice that is going to cause the crisis. Japan is entering a difficult period. The old-guard Japanese values of stoicism, uncomplaining compliance, and respect for authority are starting to crumble as people no longer can get the basics. The rice shortage will likely be short-lived, but the cracks in the Japanese body politic could be long-lasting.
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