By Michael Huband

Rice-growing in Japan is facing greater pressure than ever before, making sake production challenging. Yet tradition and collective action are both helping the industry adapt.

Rice is an emblematic product of Japan; from sushi to miso, it is a common sight on the nation’s table. It is also, of course, the key ingredient in sake, Japan’s national drink and in shochu, its distinctive spirit.

As it stands, however, rice production is facing a deeply challenging period, which is having an impact on the sake industry. Prices have shot up, making sake production more expensive.

As it stands, around 3% of Japan’s rice is used for sake production. This can be broken down into three categories. The data for 2023 shows that the rice used in sake production was 42% sake rice (that specifically cultivated for sake production), 35% processing rice (used for sake as well as miso and rice crackers) and 23% table rice.

With a series of long- and short-term factors suddenly inflating prices, sake producers have faced a growing bill for raw materials. However, they are finding some relief both in solidarity rooted in tradition and the continued efforts of the Japan Sake and Shochu Association (JSS) to fight for the industry.

Why sake production is in a tight spot

There are, certainly, long-term and structural issues facing the rice industry in Japan. There was a decrease of approximately 25% in the number of rice farmers between 2015 and 2020, with the average age of those remaining increasing.

Moreover, some price adjustment is inevitable, for instance, as essentials like fertiliser become more expensive.

A certain degree of price adjustment has become unavoidable. The supply-demand imbalance has led to a surge in table rice prices, which have increased 2.4 times in 2025 compared to 2023.

Traditionally, sake rice has commanded higher prices than table rice, followed by processing-use rice, which benefits from a government subsidy program. However, the recent sharp rise in table rice prices has pushed up the overall price of rice varieties. In particular, the reversal in pricing – where table rice now exceeds sake rice – has prompted a growing number of farmers to shift cultivation away from sake and processing-use rice toward table rice.

While this price spike is believed to be driven by short-term market disruptions, sake breweries are increasingly concerned about whether they will be able to secure rice at stable and fair prices going forward.

The roots of the price surge are complex. The long-term trend for table rice production has been downwards. In response to a domestic decline in rice consumption, the Japanese government for nearly five decades (from 1970 to 2018) operated the Gentan policy. This involved subsidising farmers to reduce their rice cultivation and so reduce production. Over the same period, climate change reduced yields for farmers, further limiting production.

Recent years, however, have seen the trend of declining consumption abate. Driven by foreign tourists, demand for table rice has increased. Japan has therefore struggled to produce enough rice, leading to a shortage and that dramatic surge in the price of table rice.

Unique problems for sake rice producers

Sake rice, associated with higher-end production, has likewise been affected. However, its particular characteristics and unique heritage have created a different path through the current upheaval.

The category has not been immune to price surges. Despite being sold at a higher price than both table and processing rice, some producers have made the switch to table rice.

Moreover, sake rice’s taller than usual stalks pose specific problems. The plants are particularly prone to lodging, a phenomenon in which the plants fall over, complicating the harvest and reducing yields.

There is pride in producing sake rice, including the most common variety Yamada Nishiki. That has its own challenges. Takashi Fujimoto, managing director of JA Hyogo Rokko, has seen how government policy demoralised the industry.

“Due to the acreage reduction policy, many farmers had lost their pride,” he says. “Even if they wanted to grow more, they had been forced to reduce production.”

The prestige and history of growing premium sake rice, however, is helping some growers and breweries weather the storm. As Fujimoto highlights, farmers in Hyogo Prefecture – the home of Yamada Nishiki which produces more than 30% of Japan’s sake rice – benefit from the Muramai system.

The longstanding method of mutual aid has led to uncommonly strong ties between growers and brewers. The mutual responsibility and purpose incentivises all parties to maintain a stable supply, building resilience.

In summary, it sees specific sake breweries buying the entire crop of designated district farmers. In return, farmers provide labour support to breweries in hard times; a notable example was the Great Hanshin Earthquake in 1995.

While other regions are seeing farmers switch from sake rice to table rice, the system seems to have prevented the switch, demonstrating how heritage and long-term support can bolster the industry.

The JSS takes the lead

Though market adjustments are inevitable, the speed and scale of current issues risk making rice production unsustainable in Japan. For that reason, the JSS is taking firm action.

It has introduced its ‘Emergency Guarantee System for Sharp Rice Price Increases’. The programme offers support to breweries by guaranteeing debt when they borrow production funds (primarily for the purchase of rice). By doing so, the JSS can help breweries attain finance to get through this difficult period.

The association is also calling on the Japanese Government to expand existing agricultural subsidy programmes to include sake rice, which is currently excluded from such support. That exclusion of sake rice farmers from such support is putting pressure on the growers behind Japan’s national drink.

Ultimately, the JSS is monitoring the situation to see where it can assist. Continued action and historical systems are helping minimise the long-term damage; the JSS is always looking for new ways to support the industry.

Published Date: December 4, 2025