FOCUS : Rice an Emotional Agriculture Issue in Japan and U.S.

Reports are growing in Tokyo that Japan--after five years of U.S. pressure--is poised to open its rice market. The Yomiuri newspaper reported last week that Japanese Prime Minister Toshiki Kaifu and the ruling Liberal Democratic Party have decided to offer up to 5% of the $23.5-billion Japanese rice market to imports.

Kaifu reportedly agreed with the United States and others that the current Uruguay Round of multilateral trade talks could not succeed without a concession on rice by Japan. An announcement may come late this month, when the leading industrialized countries meet in London.

To Americans, Japan’s rice import ban has become a symbol of its closed markets. To Japanese rice farmers, the ban protects the nation’s food “self-sufficiency” and insulates them from world rice prices that are seven to 10 times lower. To California farmers, the political hoopla may be much ado about nothing.

Why? Staff writer Teresa Watanabe interviewed three rice experts to find out.

Teruka Ishikura, managing director, Central Union of Agricultural Cooperatives (Zenchu):

We are totally opposed to the liberalization of the market. The feeling of the Japanese nation is that more than 60% have some concern about food in the future.

A change in the international situation, such as the Gulf War, could easily change the environment, so more and more people have a stronger and stronger feeling about the need to secure our food. For the purpose of a stable supply of food, whatever can be produced domestically should be produced domestically.

Japan is already the most liberal country in the world in terms of agricultural imports. Only 49% of the overall Japanese food supply is produced at home. This is the lowest level of any developed country.

For the U.S., rice is a minor product. But for Japan, it’s a big item. We don’t know why we, the largest buyer of U.S. agricultural products, should be retaliated against.

David Graves, president, U.S. Rice Millers Assn.:

Japan’s rice ban is illegal under the rules of GATT (General Agreement on Tariffs and Trade). GATT is an international organization of about 102 countries that have banded together to develop rules governing trade. Japan voluntarily sought membership. But they want to sell the world all the computers they can and buy no rice. Japanese companies can sell their products here, so our farmers need to be able to sell their products there. We need fairness.

We need the market. We consistently, over the last eight to 10 years, have been forced out of markets. South Korea was our largest market, but the government enforced a ban and locked us out in order to develop their own industry.

We have a long list of former largest markets, and we lost them all to government actions: Cuba, Iran, Nigeria, Iraq. When you lose those kinds of markets, you start looking around the world and saying, “What other markets can we have access to?”

We agree that every nation has the right to be able to secure food for its people. But the best guarantee of that is to ensure a free and open trading system.

This is not a losing economic proposition for Japan. Consumers will benefit. Their industry will become more efficient.

Jack Kenward, spokesman, Rice Growers Assn. of California:

Although California has very good-quality rice, it’s simply not likely that any significant exporting activity is going to take place.

You need to start with the understanding that Japan has a surplus at least as large as the entire production in California last year. California produced 1.25 million metric tons of rice. Japan produced 10 million, and the surplus is 1.5 million to 2 million metric tons. So you begin to get a sense of the proportion here.

And producers of rice in California, constrained by the lack of water, believe production will be roughly half of normal this year. So they may not even be able to supply the market.

On top of that, if Japan liberalizes its rice trading regime, other providers will immediately emerge, particularly Australia and Thailand. So even if Japan liberalizes, there’s still the issue of how do you sell it, how do you market it, and will the return be attractive if Australia, Thailand and the U.S. are all hitting the market at the same time?

If you take the entire trading relationship between the U.S. and Japan and contrast it to the potential of rice sales to Japan from California, we come to the conclusion that there is a lot of fuss that is far out of proportion to the economic impact.