Rice Farming

 - USA Rice Federation Update -

U.S. rice now awaits
Chinese response

By Jim Guinn
Vice President
International Promotion
USA Rice Federation

Patience has been called a virtue, but it is also known as a key to business dealings with the People’s Republic of China, and rice is no exception. In fact, deals in China are rarely brokered in a day, or even a year for that matter. Nearly a decade ago, USA Rice Federation-supported research demonstrated the possibility of a small market in China for U.S. rice. According to more recent research, again sponsored by USA Rice, that may be even more the case than a decade ago. It has been widely reported that as Chinese citizens become more affluent, they purchase higher quality food products, including imported rice.

That said, many people don’t realize that it is illegal for the United States to export rice to China without first establishing a phytosanitary agreement with the Chinese government. USA Rice has been working with the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) since 2006 to establish such an agreement. By the way, phytosanitary refers to activities “designed to prevent the introduction and/or spread of quarantine pests or to ensure their official control,” according to the United Nations Food and Agricultural Organization.

Bill Framer, USA Rice director of Canada and Asia Programs, and I discussed the rice trade with U.S. Minister Counselor William Westman in Beijing in September. We also met with other agricultural trade offices. The U.S. rice industry and APHIS officials have completed their round of work in mid-February and will now wait for a thorough review by Chinese officials.

APHIS officials had by August 2007 determined what was needed to establish an agreement and had begun to gather the information required by the Chinese Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), the Chinese equivalent of APHIS. That same month, USA Rice began providing APHIS with information that would be required by the Chinese to determine whether U.S. rice meets the phytosanitary requirements for entry into China.

U.S. industry and government officials had initially believed an agreement could be accomplished by consultation with Chinese officials and the provision of some general assurances from the United States on the quality of milled rice. However, a law passed in China in December 2007 established new, more stringent requirements for the entry of “new” products into China, necessitating that a pest risk assessment (PRA) be conducted.

Pest risk assessment completed
After further consultation with AQSIQ, APHIS was granted permission to conduct the PRA on behalf of AQSIQ and provide the outcome of the assessment to Chinese officials. The PRA was completed and submitted to the Chinese with a Feb. 18, 2009, letter from APHIS. The risk of introducing any pest or weed seed into China is extremely low, says the letter from Craig T. Fedchock, assistant deputy administrator in the APHIS office of Phytosanitary Issues Management, Plant Protection Quarantine.

Because the risk is so low, Chinese milled rice enjoys unrestricted access to the U.S. market without the need for a PRA, and the United States seeks the same treatment for U.S. milled rice, says the letter addressed to Dr. Lin Wei, deputy director general, of the AQSIQ Food Safety Bureau.

  Because the milling process in-volves cleaning steps that are effective in removing soil and other contaminants, and because dehulling and the abrasive bran removal are part of the process, production pests are eliminated, the letter says, leaving rice that cannot be used as seed.

Other challenges
The high-quality imported rice available in China is most often purchased by Hong Kong businessmen who have so far exhibited a clear preference for Thai jasmine rice. They have influenced their countrymen on the mainland aided by the fact that Thai jasmine rice had been imported into China even before it was accepted as a member of the World Trade Organization (WTO). Other than Japan, there is no other credible source for highest quality medium and short grain to serve the large number of expatriate Korean and Japanese businessmen who prefer Japonica rice (Japan has shipped small quantities of rice to China). USA Rice believes there is a small niche market for the highest quality Indica and Japonica rice in China. And if that sounds less than encouraging, keep in mind that a small niche in a country that produces and consumes one-third of the world’s rice could result in a considerable amount of trade.

We will wait now to hear from the Chinese. By the time an agreement is in place, U.S. rice varieties will be poised to enter a new market. Patience is part of the business.

For more about USA rice programs, visit www.usarice.com.