JA group to slash advance pay to Fukushima rice growers for 2021 crops

The Japan Agricultural Cooperatives (JA) group's distributor in Fukushima Prefecture has decided to sharply reduce estimated payments to rice growers for their 2021 crops in response to slumping demand for the staple food. The decision was taken on Sept. 10 at a meeting of the steering committee of JA Zen-Noh Fukushima, which fixes the JA estimates that are used as a yardstick for advance money paid to farmers for being commissioned to sell their rice. The Fukushima chapter of the National Federation of Agricultural Cooperative Associations (Zen-Noh) agreed at the meeting on cuts ranging from 2,600 yen to 3,200 yen per bale (60 kilograms) for main varieties compared with their 2020 levels. The resultant rice prices will be at their lowest levels since 2014. All varieties but the mainstay "koshihikari" brand produced in the Aizu region will be worth less than 10,000 yen per bale, making it certain to weigh heavily on the finances of rice farmers. JA Zen-Noh Fukushima and four other local organizations of the JA group have launched discussions on how to support rice growers together with the prefectural government. The koshihikari variety will be worth 10,000 yen for the crops harvested in the Aizu inland area and 9,500 yen each for the crops from the Nakadori central and Hamadori coastal regions. Both prices are 2,600 yen lower than in 2020. Based on the JA estimates, the five local bodies are supposed to decide "estimated payments to producers," or temporary payments to farmers, by discounting commission fees and other charges from the prices presented by the JA, meaning that rice growers will eventually receive less than these figures. According to the agriculture ministry's statistics on production costs of farm produce for 2019, rice production in Fukushima cost 11,629 yen per bale on average. The figure was broken down into 8,041 yen in expenses for goods and materials, including rice seedlings and fertilizers, and 3,588 yen in labor costs. This suggests the proposed temporary payments can cover goods and materials expenses but fall short of offsetting the labor costs. The ministry's Agriculture and Forestry Census for 2020 puts the average paddy rice acreage per farming household at 172 ares in Fukushima Prefecture. Assuming the price of the Aizu-produced "hitomebore" variety at 9,000 yen per bale and the average crop per 10 ares at the normal-year level of nine bales, a farmer would earn 1,393,200 yen for the 2021 crops, representing a steep revenue fall of 495,360 yen from 2020. The Fukushima government is poised to consider extending support for rice growers, keeping a close watch on the impact on them of the sharp cuts in the JA's estimated prices and other factors. Providing support in the form of compensation for revenue losses is not among the options from the perspective of maintaining fairness. Instead, it is likely that the local government will call for rice farmers to take out income insurance and continue encouraging them to switch to production of crops with high profitability. When estimated JA payments dropped sharply for the 2014 rice crops, the prefectural government shouldered part of the interest payments on loans from its farming management stability fund, among other support measures. Among factors behind the cuts in the JA estimates for the 2021 rice crops were a nationwide decline in rice consumption stemming from the shrinking population, and sluggish demand for business purposes amid the novel coronavirus epidemic, leading inventories to swell in 2020 and resulting in sizable falls in market prices of rice. (Translated by Kyodo News)