The government plans to adopt a package of measures for fiscal 2001 to stop the decline in rice prices, including expanding the cut in the nation's paddies to 1 million hectares for the first time.
The reduction increase, the first in three years, was proposed by the Central Union of Agricultural Cooperatives (Zenchu), which is working on the package jointly with the Agriculture, Forestry and Fisheries Ministry and the ruling coalition, officials said.
Zenchu made the proposal as an emergency step to prop up rice prices, which have been continuously falling due to an oversupply of the staple. It was made on the assumption that the government will raise subsidies for rice growers who comply with the paddy reductions and that it will also promote the liquidation of rice in state stockpiles.
The government began cutting back on rice cultivation in fiscal 1976. The margin of the reduction was a constant 963,000 hectares per year from fiscal 1998 to fiscal 2000.
Rice production in 2000 is expected to exceed consumption by some 300,000 tons. The package envisages that most of the surplus will be placed in government storage, while the same amount of rice will be withdrawn from storage for use by farmers as feed, as part of the fiscal 2000 agricultural policy.
In fiscal 1999, 170,000 tons of rice were processed into feed under the same mechanism.
In another move to prop up rice prices, the package calls for an increase in processing premature rice into feed.
The government plans to formally adopt the package in late September.