It will be interesting to see how this affects the Japanese rice farmers. The prices are high because the farmers don't have 'enough' rice to sell and thus have to raise the price to get the total amount of money they need for rice farming to be profitable. If the government artificially lowers prices by pulling rice from the stockpiles, that won't increase the amount of rice that rice farmers have to sell. They will have to sell the same amount of rice for less money, possibly driving them from the market permanently and lowering the amount of available rice in the future even further.
You seem to be assuming some sort of utopian market. Among 1000 things that could be wrong there could e.g. be that farmers or distributors are price fixing.
Nope, he has a point, its a dangerous boom and bust cycle that a lot of countries go through that try to regulate and control price of commodities like Rice and Grains, its not always just farmers or distributors price fixing, especially if a country has an open grain exchange market.
What happens is for weather or bugs or disease or other reasons the crop yield for a year goes down, prices go up, gov tries various ways to bring prices artificially down, farmers cannot recoup their initial investment, some farmers kill themselves (happens a lot in agrarian countries like India, South East Asia, Africa, etc) , rest abandon farming altogether, others go into permanent family debt to last another year from loan sharks who do not care about laws.
This creates a Boom and Bust cycle of prices, and prevent any sort of long term price stabilization or ability for a country to progressively boost production of grains, milk, etc.
This is a political crisis that is often seen in many countries, and doing the right thing long-term is very hard for impulsive political climate, and the more you take the wrong steps the worse it becomes over the years.
I’m by no means an expert but I think raising prices in Japan bears significant cultural meanings, There were times when CEOs publicly apologized for raising prices.
Japanese ppl eat 50kg of rice per capita per year?*
price of 1kg of rice in tokyo $4.33**
so rice expenditure was $216.50/year? now up 60% to $346.40? a $130 increase?
the poorest 7% of households made under 1m yen?***
so thats about $6500? so a 2% or less hit to all but the poorest 7% of Japanese households.
median is 4-5m yen..lets pick 4.5m for convenience..so around $30k..n $130 is less than half a percent of household income.
i don't know where's the threshold for rounding ¯\_(ツ)_/¯
I think the point is that a 60% increase of a small number is still a small number. If you spend $15 a month on rice and then that goes up $23, it's still a small part of your overall household budget.
I think it is clear that this is a political 'problem' that they're trying to solve, rather than an economic problem.
Readit News
What happens is for weather or bugs or disease or other reasons the crop yield for a year goes down, prices go up, gov tries various ways to bring prices artificially down, farmers cannot recoup their initial investment, some farmers kill themselves (happens a lot in agrarian countries like India, South East Asia, Africa, etc) , rest abandon farming altogether, others go into permanent family debt to last another year from loan sharks who do not care about laws.
This creates a Boom and Bust cycle of prices, and prevent any sort of long term price stabilization or ability for a country to progressively boost production of grains, milk, etc.
This is a political crisis that is often seen in many countries, and doing the right thing long-term is very hard for impulsive political climate, and the more you take the wrong steps the worse it becomes over the years.
Is this not in rounding error territory for most household?
Japanese ppl eat 50kg of rice per capita per year?*
price of 1kg of rice in tokyo $4.33**
so rice expenditure was $216.50/year? now up 60% to $346.40? a $130 increase?
the poorest 7% of households made under 1m yen?***
so thats about $6500? so a 2% or less hit to all but the poorest 7% of Japanese households. median is 4-5m yen..lets pick 4.5m for convenience..so around $30k..n $130 is less than half a percent of household income.
i don't know where's the threshold for rounding ¯\_(ツ)_/¯
* https://www.statista.com/statistics/1228187/japan-per-capita...
**https://www.numbeo.com/cost-of-living/prices_by_city.jsp?ite...
***https://www.statista.com/statistics/614245/distribution-of-a...
Maybe read the article a bit before jumping into the discussion.
I think it is clear that this is a political 'problem' that they're trying to solve, rather than an economic problem.