Japan Launches Program to Bolster Sake Industry Amid Soaring Rice Prices

Japan Addresses Rising Rice Costs for Sake Production

The Japanese government has launched a new support program designed to forge direct partnerships between sake breweries and rice farmers. This initiative, spearheaded by the National Tax Agency (NTA), which oversees the liquor industry, aims to stabilize the supply of sake rice and alleviate the financial strain on breweries caused by soaring rice prices. The program's funding was secured through the fiscal 2025 supplementary budget, enacted in December 2025.

The Challenge of Soaring Rice Prices

Sake breweries across Japan have been grappling with a significant increase in the cost of 'sakamai' (sake rice) and 'uruchi' rice (staple rice), essential raw materials for sake production. The price of sake rice harvested in 2025 has surged by approximately 1.5 to 2.3 times compared to the previous year. This follows a sharp rise in staple rice prices, with the average price for all brands reaching ¥37,058 per 60-kilogram sack in October 2025, an increase of ¥13,238 from a year prior.

Several factors contribute to this crisis:

• Farmers have increasingly shifted from cultivating sake rice to more profitable staple rice varieties due to their rising prices.
• Long-term government policies, such as the 'Gentan' acreage reduction program (1970-2018), previously aimed at curbing overproduction, have impacted rice supply.
• Climate change has affected crop yields.
• An aging farming population and a lack of successors further exacerbate production challenges.
• Rising costs for agricultural essentials like fertilizers also contribute to higher rice prices.

These pressures have severely squeezed the profit margins of many breweries, particularly the small and medium-sized operators who constitute about 93% of sake manufacturers. Some breweries, like Fumigiku Sake Brewery, have indicated plans to raise product prices by 3-5% to offset these increased costs.

Government and Industry Support Initiatives

The NTA's new program is a 'first-of-its-kind' effort to bridge the gap between breweries and farmers, as sake rice is often traded through intermediaries, limiting direct communication. The initiative aims to foster relationships where both parties can engage directly. As part of this, the NTA will offer subsidies of up to ¥1 million per project for events such as sake competitions that highlight products made with locally sourced sake rice.

Beyond this, the Japanese government has included measures to ease the financial burden on sake breweries in a broader economic stimulus package approved in November 2025, aiming to stabilize operations and support the industry's growth. This package also seeks to ensure a stable supply of sake rice and support breweries' cash flow.

The Japan Sake and Shochu Makers Association (JSS) has also implemented an 'Emergency Guarantee System for Sharp Rice Price Increases' to assist breweries in securing production funds. Furthermore, by January 2026, 26 prefectures had introduced their own support programs for sake breweries, some utilizing tax revenue grants. Examples include Yamagata Prefecture, which subsidizes half of any increase in local sake rice prices, and Hitoyoshi, Kumamoto Prefecture, which provides benefits to local brewers' association members.

Preserving a Cultural Heritage

The efforts to support the sake industry come at a time of heightened international recognition for Japanese sake. In December 2024, Japan's 'traditional knowledge and skills of sake-making' were registered as a UNESCO Intangible Cultural Heritage. This designation has created momentum for expanding sake sales and exports, making the stability of rice supply even more crucial for the industry's continued success and the preservation of this important cultural tradition.