The U.S. rice industry is following international trade rules, but its competitors are not, and U.S. rice farmers are paying the price.
The U.S. International Trade Commission completed a study Thursday (May 14) that indicates foreign governments often engage in unfair trade practices that distort rice prices and make it more difficult for U.S. shippers to compete in world markets.
“The global rice market is characterized by significant government intervention in both imports and exports,” the ITC report said. “This has affected trade and price trends in the world rice market more than it has for most other agricultural products.”
U.S. long grain rice prices have dropped nearly $2 per bushel in recent months due to increased world rice supplies and subsidized exports by competing countries, according to U.S. farmer-owned rice cooperatives and the USDA’s World Agricultural Outlook Board Supply and Demand Estimates.
The report “Rice: Global competitiveness of the U.S. industry,” stems from a Section 332 investigation requested by members of Congress. It examined the rice industry in the U.S. and in major producing and exporting countries, including China, India, Thailand, Vietnam, Uruguay and Brazil and found the world rice market is a confusing and often unfair place.
The study looked at the impact on the U.S. rice industry of exports from competitor countries to the U.S. and traditional U.S. markets like Mexico, Haiti, and West Africa, and found that although the U.S. rice is high quality and enjoys favorable tariff treatment from markets such as Mexico and Central America, competition is on the rise.
“Consumption support has the largest effect on the global rice market,” the report said. “Had such support not been in place in 2013, global paddy production and rice consumption would have been 6.1 million metric tons lower. Another factor shaping rice production in non-U.S. countries is government support for inputs such as seed, fertilizer, and fuel.”
"The study provides detailed evidence that the U.S. rice industry is playing by the rules, but is at a decided disadvantage from some of our trading partners who do not," said Betsy Ward, president and CEO of USA Rice. "The report points out that support for U.S. farmers continues to decline, while in places like China, Thailand, and India, those supports are going in the opposite direction."
The yearlong study is the result of collaboration between USA Rice and Congressman Charles Boustany, R-La., a member of the House Ways and Means Committee and the committee’s Chairman, Congressman Dave Camp, R-Mich.
“We appreciate the leadership of Chairman Camp and Congressman Boustany on bringing these important issues to light on behalf of America’s rice farmers,” said Dow Brantley, an Arkansas rice farmer and chairman of the USA Rice Federation who participated in the ITC study. “We've said all along that we can compete globally and are willing to compete, but if the system is rigged against us, it makes it quite difficult.”
The U.S. rice industry will use the study to advocate for change in foreign government policies that negatively impact the industry's competitiveness, said Ward.
To read the ITC report, visit http://www.usitc.gov/publications/332/pub4530.pdf