July 24, 2008

Japan shifting towards feed-rice production to counter high grain prices

Japan, the world''s largest grain importer, is expanding its production of rice for feed in the face of high grain prices, according to Yuji Sawa, vice minister of Agriculture, Forestry and Fisheries.

The area planted to feed-use rice in Japan will rise to 20,000 hectares (49,400 acres) this year from just 286 hectares last year, an increase of about 70-fold.

Eventually, rice production for feed would rise to 400,000 hectares yielding 3.5 million tonnes of rice for feed, he said.

Japan has the costliest rice in the world, at 240,000 yen a tonne (US$2,228). To become a viable alternative to corn in feed, it must drop to about 40,000 yen (US$371).

The government from April 1 started a payment to farmers of 25,000 yen (US$233) a tonne for feed-use rice.

The country also plans to sell more than 600,000 tonnes of foreign rice this year from its stockpiles to feed makers, up 50 percent from a year earlier, a ministry official said last month.

Under WTO rules, Japan is obligated to buy a set amount of foreign rice to maintain its stiff tariffs protecting its domestic production.

The shift towards rice is to lessen Japan''s dependence on overseas grain supplies and to cushion local producers from soaring international prices, Sawa said.

Japan imported 14.5 million tonnes of feed grain last year.

Although self-sufficient in rice, Japan imports more than 60 percent of its food requirements, the highest level among developed countries.

Rice is said to be the crop best suited to the nation''s climate.

Meanwhile, private companies are doing their part to develop rice into an alternative for animal feed.

Itochu Feed Mills Co., which accounts for 5 percent of total Japan feed output, is co-operating with a farmers group to produce high-yielding rice for feed.

Meanwhile, Japan is also developing higher-yielding rice for feed that is easier to grow than food varieties, Sawa said.