Japan Will Cut Price It Pays Rice Farmers

TOKYO — The Japanese Cabinet decided Friday to cut by 1.5% the price the government will pay farmers for the 1990 rice crop, Agriculture Minister Tomio Yamamoto said.

Japan faces mounting international criticism for its refusal to end a ban on commercial imports of rice, which it has said is needed to protect farmers from cheap imports and to ensure self-sufficiency in Japan’s staple food.

The reduction, to an average of 83 cents a pound, was recommended by a ministry panel on Wednesday.

The reduction was made with one eye on next week’s seven-nation economic summit in Houston because it allows Tokyo to say it has taken concrete measures to reform its agricultural policies, analysts said.

Rice prices in Japan are about six times world levels.

The decision followed the failure of an advisory board made up of consumers and farmers to unanimously endorse the cut after a meeting that lasted until late Thursday.

The advisory board, appointed by the Agriculture Minister, ended up issuing a joint statement with a number of different opinions on the price cut and Japan’s farm policies.

Some members said the cut was too small in light of world prices and showed lack of vision in farm policy. Others, mainly producers, said any cut was inappropriate, given recent rises in prices and labor costs.

“This is unusual but, in a case like this, the minister has the power to decide without the endorsement of the board,” an Agriculture Ministry official said.

On Wednesday, another ministry official said the proposed cut was in line with lower output costs and the fact that the government has large rice stockpiles. It was also aimed at narrowing the gap between domestic and foreign prices, he said.

Japan cut its wholesale rice price for the first time in 31 years in 1987, by 5.95%. In 1988, it cut the price again, by 4.6%. In 1989, it was left unchanged, despite an Agriculture Ministry recommendation that it be cut.