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Tainted Rice Causes Food Scare in Japan

September 25, 2008

After an Osaka-based company was found early this month to have sold tons of tainted rice illegally for human consumption, Noriko Takada thought “Not again!” A series of food scandals, such as the fraudulent labeling of meat and sale of food after its use-by date, have convinced the 48-year-old Tokyo housewife that “people in the food industry care little about consumers’ safety and more about making profits.”"I love senbei [rice crackers] so much that it’s possible I have eaten some made from tainted rice.”

Even as China’s tainted-milk scandal [BusinessWeek.com, 9/22/08] continues to spread, Japanese consumers like Takada worried about a food scare closer to home. Early this month, Mikasa Foods, a rice wholesaler in Osaka, admitted that it purchased a batch of contaminated rice from the government meant to be sold only as an inedible product for industry use. Mikasa then sold it to hundreds of companies across Japan to boost profits. The rice went into sake, shochu [distilled spirit], and rice crackers. Contaminated rice also went to more than 100 hospitals, homes for the elderly, and at least 46 schools.

Behind the current scare is polished white rice that has been found to contain pesticides or mold. The Japanese media are calling it jiko-mai, or problematic rice. The jiko-mai is imported and is the result of a deal Tokyo made with the World Trade Organization in 1995 to open its long-protected market to foreign-grown rice. Thanks to that agreement, Japan imports 770,000 tons of rice every year [BusinessWeek.com, 5/22/08] from the U.S., Thailand, Vietnam, China, and Australia. Because the Japanese appetite for rice has shrunk, much of that rice is kept in storage, where some gets moldy or rots. In 2006 the government found that 2,795 tons of rice in storage was contaminated with excess levels of the pesticide methamidophos, and a large volume of it was sold for industrial use. In the past five years, about 7,400 tons of stockpiled rice unfit for human consumption has been sold for industrial use.

Moldy Rice Mikasa Foods has purchased jiko-mai more than 50 times directly from the government since 2003, amounting to some 1,779 tons in total, according to the Agriculture, Forestry & Fisheries Ministry. In addition to the troubled rice it bought from the government, the company has bought 217 tons of moldy rice from Sumitomo.

On Sept. 6, Mikasa President Mitsuo Fuyuki admitted he gave instructions to resell the rice illegally and to keep two sets of books. “We knew we shouldn’t have done it, but we did because of the tough management,” said Fuyuki at a press conference in Osaka. He has hidden himself from public view since then.

As the scandal develops, other firms are being implicated. By Sept. 16, three more food companies — Asai, Ota Sangyo, and Shimada Kagaku Kogyo — were found by the agriculture ministry’s inspection team to have illegally sold tainted rice, some of which was used for school lunches in Kyoto.

Companies have been able to find loopholes in the government’s regulation of rice, says Kazunuki Oizumi, a professor specializing in agricultural management at Miyagi University in the northeastern Japanese city of Sendai. According to Oizumi, the agriculture ministry has streamlined the distribution system for domestically produced rice, making it mandatory to state clearly on a package the place and year of production and the quality of the rice. “But there are no rules in the distribution of rice [imported under the World Trade Organization], and there was room for dirty business practices,” says Oizumi. “If it is grained rice as powder, it’s difficult to track down who and what had been used.”

Mislabeled Eels This isn’t the first such scandal in Japan. A similar problem happened last year with eels, says Hisa Anan, representative of the National Liaison Committee of Consumers’ Organizations. Companies mislabeled imported eels as domestic ones and sold them at higher prices. “There is a system to make profits by creating paper companies as intermediaries,” says Anan. “It is unforgivable that neither food traders nor the administration side cares about end consumers.”

Critics also blame the agriculture ministry’s poor supervision of the food industry. Since 2004 ministry officials inspected Mikasa 96 times but failed to uncover the illicit practices. However, since the bureaucrats informed Mikasa well in advance of the inspections, company officials readied themselves with two sets of books to cover up illegal transactions, says a ministry official. Moreover, a ministry official has admitted that he had been entertained by the president of Mikasa in a bar in Osaka on two occasions. He denied extending the company favors.

The government is taking action, though. On Sept. 19, Vice-Minister Toshiro Shirasu and Agriculture, Forestry & Fisheries Minister Seiichi Ota assumed responsibility and resigned [although they would have been replaced anyway four days later in a new cabinet reshuffle]. Police searched Mikasa Foods on Sept. 24. Last week the agriculture ministry disclosed a list of 390 companies and facilities which had bought tainted rice from Mikasa.

Among them, Asahi Breweries, Japan’s biggest brewer, has recalled 650,000 bottles of shochu, or distilled spirits, at a cost of 1.5 billion yen. “The safety of the products is proved by our rigorous testing, but we seriously take to heart that ingredients that should not have been used were used,” says Masao Fujimori, a spokesman for Asahi. Except for the brewer, most of the companies that bought the rice are small and midsize and suffered severe blows. On Sept. 19 the president of Nakagawa, a company in Nara Prefecture that bought bad rice from Mikasa and sold it as edible grain, committed suicide.

Wake-Up Call for Food Safety The government is taking further action to reassure the public that Japan’s food supply is safe. It canceled tender of a 55,000-ton shipment of foreign wheat and the planned purchase of 25,000 tons of foreign rice. And the agriculture ministry said it would stop selling rice for industrial use and incinerate existing imports. It also said it would require rice traders to ship back any rice rejected for food use at Japanese ports. That’s angering traders. “It is totally against global business customs,” says Nobuyuki Chino, the president of Unipack Grain, which deals in crops globally.

One of the repercussions of this scandal could be a growing aversion by Japanese to foreign food products. “I think the tendency for consumers to stay away from imported agricultural products will be intensified,” says Oizumi of Miyagi University.

However, consumers also tend to be realistic. Tokyo housewife Takada points out it is simply impossible to meet demand for low-price natto, or fermented soybeans, with domestic produce. Her local food co-op found Chinese soybean farmers who could meet Japanese safety requirements. But co-op customers were not impressed and have complained about using Chinese produce. “They want to have natto with 100% domestic produce at the same low price. Of course, it is just not feasible,” says Takada.

Professor Oizumi says the series of food scares is good news for the future of Japan’s food safety. “More people have become interested, and more care about food safety,” he says. “This is a good step forward to establish a proper system to secure food safety. It is as if we were walking in the dark with a tiny torch, but now, because of people’s rising vigilance, some street lamps are on.”




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