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Business trends

Japan's farmers double output of premium rice

Prefectures compete for high-end market as Tokyo's control over production ends

More premium rice bands are showing up in high-end stores, like the Mitsukoshi department store in Tokyo's ritzy Ginza district.

TOKYO -- Japanese rice farmers are expanding production of new, pricier brands, a move to shore up income as consumers eat less of the staple.

The output of 10 leading brands introduced in 2015 through 2018 is set to more than double this year to a little over 50,000 tons, a survey of prefectures found. Shinnosuke, from the famed rice-growing region of Niigata Prefecture, is set to post a 120% increase to 11,000 tons. Niigata is focusing on marketing the new grain in greater Tokyo, looking to boost name recognition in the country's largest market.

For nearly half a century, the central government controlled rice production under its acreage reduction program to prevent steep drops in price. But Prime Minister Shinzo Abe hammered out a plan in 2013 to do away with this policy, starting with the 2018 harvest, and the prefectures have taken full charge of production instead.

This has led to a rush to develop new regional brands. Japan has 795 registered brands today, up 50% from a decade earlier.

Many of the newcomers are marketed as premium types. With a retail price of about 3,000 yen ($27) per 5 kg, Shinnosuke is on a par with the top-of-the-line Uonuma Koshihikari, also from Niigata. This compares with brands that grew popular in the 2000s and went for around 2,500 yen per 5 kg.

A rice shop in the posh Mitsukoshi department store in Tokyo's Ginza shopping district displays many brand-new offerings. "Ichihomare from Fukui Prefecture is priced at more than 1,000 yen per kilogram, but it's the No. 1 seller and already has many repeat buyers," said the store manager.

Supermarkets, aware of customers' preference for more affordable fare, are only dipping their toes in the premium market. "We'll test consumer reaction to higher-grade brands with 2-kg bags for now," said an executive at Inageya, a grocery chain based in the Tokyo area.

Rice acreage has fallen by half since 1970, before the reduction program began. To deal with the lower income from smaller parcels, farmers worked on developing high-grade brands.

Prefectures are ready to go all-out in promoting their latest deluxe brands, with some earmarking nearly 300 million yen a year for advertising. But critics say such campaigns are wasting taxpayer money, since the ads rely too much on celebrities and do not effectively communicate the flavor of the grains.

Meanwhile, Japan faces an annual shortage of 1.3 million tons of the lower-grade rice typically served at restaurants. "We want the government to fund increased output of low-cost rice, too," said the president of a major wholesaler.

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