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Study confirms vulnerability of California export markets to genetically modified rice - Rice producers call for a moratorium in California

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Colusa, California
February 20, 2007

Source: Rice Producers of California

A newly released study* finds that California’s rice industry faces the loss of export markets worth over $200 million dollars in the event that genetically modified (GM) rice is produced commercially.

The report makes the following conclusion: “It would appear that the rice trade in Japan, Korea, Taiwan and to a lesser extent Turkey has little interest in importing GM rice at this time…Due to the risks involved, we recommend that the U.S. industry not seek commercialization of GM rice in the near term [next 3 to 5 years].”

The study commissioned by the Rice Producers of California (RPC) was conducted by the international affairs and market research firm Bryant Christie Inc. and has been formally endorsed by the US Rice Producers Association (USRPA). Bryant Christie evaluated the potential for market acceptance of GM rice in Japan, Korea, Taiwan and Turkey. These markets, which account for approximately 40% of California’s annual rice crop, have a value of over $200 million dollars.

The report also states that even if GM rice were cheaper, and even if the rice industry conducted an extensive educational campaign, “there should be a full understanding that the pursuit of [GM Rice] commercialization could jeopardize existing U.S. rice exports to Japan.” It goes on to state “Considering that Japan accounts for roughly half of all California rice export sales, or the equivalent of between 20% and 25% of California’s annual rice production, loss of the Japanese market could significantly impact the California rice industry.”

The report comes on the heels of the August 2006 disclosure that Bayer CropScience’s experimental Liberty Link GM rice had contaminated the Southern U.S. long grain rice supply. The incident led to plummeting rice prices (an estimated $150 million within a matter of days), the closure of several European and Asian markets, and costly testing and cleanup attempts.

According to Dwight Roberts, USRPA President and CEO, “California has an opportunity to be proactive and adopt strong measures to protect itself from the market disruptions and rejection experienced in the South. This incident is your wake-up call.”

RPC is calling for a moratorium on all open-air GM rice production, laws giving farmers compensation if they suffer economic damages due to GM contamination, and extensive seed testing to assure GM-free seed supplies. “The potential long-term benefits of GM rice have yet to be proven to California growers, and the risks to our markets are simply too great,” stated Chris Capaul, a California rice farmer from Sutter County.

MARKET ACCEPTANCE OF U.S. HERBICIDE-TOLERANT RICE IN JAPAN, KOREA, TAIWAN, AND TURKEY
Prepared by Bryant Christie Inc. for the Rice Producers of California
February 1, 2007

EXECUTIVE SUMMARY

The Rice Producers of California (RPC) retained Bryant Christie Inc. (BCI) to evaluate the potential for market
acceptance of the genetically modified (GM) rice in Japan, Korea, Taiwan, and Turkey. These markets account for about 40% of California’s annual rice crop and are therefore economically important to the California industry. Findings in this study come from desk research and interviews with the rice trade in each country. This report summarizes these findings.

Japan’s rice import policies and its government’s reaction to recent reports of certain GM rice in U.S. supplies, coupled with cultural sensitivities to rice, as well as low acceptance of GM foods by the Japanese public and the Japanese rice trade, reduce the likelihood of the market accepting U.S. GM rice. In fact, strong evidence demonstrates that without consumer education and changes in government policies, efforts to commercialize GM rice in the U.S. could result in the loss of the Japanese market to U.S. rice. Considering that Japan accounts for roughly half of all California rice export sales, or the equivalent of between 20% and 25% of California’s annual rice production, loss of the Japanese market could significantly impact the California rice industry.

Korea is also economically important to the California rice industry as approximately 86% of Korea’s rice imports from the U.S. is produced in California. As in Japan, rice is a politically sensitive topic in Korea. Although market access for U.S. rice under Korea’s minimum market access (MMA) agreement is improving and GM soybeans and corn are currently imported for feed and processing, the majority of Korean rice trade members interviewed for this report opposed the purchase of GM rice. This sentiment is also shared by Korean consumers, though some evidence indicates that consumer education campaigns may be capable of changing this opinion in the future.

Unlike Japan and to a lesser extent Korea, Taiwan offers more commercial opportunities for U.S. rice imports. This is particularly the case for California rice which accounts for nearly all U.S. rice exports to Taiwan. However, like Japan and Korea, challenges for GM food products are present in Taiwan. While Taiwan imports GM soybeans for human use and animal feed, the Taiwanese rice trade members interviewed for this report were reluctant to accept imports of GM rice. Taiwanese consumers are generally less aware of GM foods than their Japanese and Korean counterparts and it is possible that their perception of GM foods could improve through consumer education efforts.

Turkey’s restrictive import policies and ambiguous regulatory framework for GM foods create significant market access barriers for GM rice in the near-term. Further, while the results of the in-country surveys conducted for this report indicated that it may be possible to locate a Turkish buyer for GM rice, the results also indicate that consumers might reject GM rice given the information to which they are currently exposed. However, even with these obstacles, Turkey shows the most promise for U.S. GM rice relative to the three other markets covered in this report.

In conclusion, it would appear that the rice trade in Japan, Korea, Taiwan, and to a lesser extent Turkey has little interest in importing GM rice at this time, even in situations involving cost advantages and full regulatory approval of GM rice. Due to the risks involved, this report recommends that the U.S. industry not seek commercialization of GM rice in the near term and any longer term effort be accompanied by targeted and extensive education/communications campaigns in each market. Even then, there should be a full understanding that the pursuit of such commercialization could jeopardize existing U.S. rice exports to Japan.

Full report: http://calriceproducers.org/RPC_GM_Rice_Report_2.pdf

Rice Producers of California, founded in 1997, represents and advocates for the interests of California rice producers, and promotes the economic viability of rice farming in California. RPC is the only organization that speaks solely for the interests of California’s rice producers.

 

 

 

 

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