agricultural products trade talks. The estimated effect on the international rice trade price of the emergency imports of rice after the Heisei rice crisis and subsequent rice imports under the agricultural agreement are estimated by the autoregrasion model and shown in Chart 5. Although the price fluctuates between 1993 and 2000, the estimated average rice trade price is about double of the 1992 price level. Consequently, the rice retail price in Asian countries may increase by about 20-30%. This will cause a crisis for the poverty stricken people (700 million in Asia out of the world's total of 1.1 billion) and for starving people (500 million in Asia out of a world's total of 800 million) in Asia as most of them eat rice as their staple food. The Japanese import of large amount of rice at any cost (price elasticity of import demand is small), will cause substantial increase in the instability in the world rice trade market price. For most of Asian people it is very important to live with the situation where stable and cheap rice price is assured. Japan should refrain from importing rice.
Self-sufficiency in rice within Japan is important to the stability of rice price and supply in Asia, as well as in Japan.
6. Tightness of Grain Supply and Demand towards the 21st Century
As seen in the above analysis the world grain stock will be maintained at a low level in the long term as we head towards the 21st century, and the grain prices will increase, because of the transformation of the European and American agricultural policies after the late eighties, the restrictions on natural resources and agricultural technology, and rapid increase in the need for feed and food grains, principally in China, due to the population explosion and high economic growth.
