U.S. Rice Industry Says Trump Administration’s Trade War Mitigation Program Misses the Mark

Red & white bullseye with arrows outside the target
Off target
Jul 26, 2018
WASHINGTON, DC – While some in agriculture are praising the Trump Administration for its attempt to mitigate damage done as a result of the Administration’s trade wars, the U.S. rice industry sees the short-term approach as inadequate and is more interested in long-term structural changes that would put U.S. rice on a level playing field globally.

“Rice receives marginal benefit from these proposed programs that are actually only addressing symptoms of our trade woes, not the causes,” said Dow Brantley, an Arkansas rice farmer and member of USDA’s Agricultural Trade Policy Advisory Committee.  “The United States exports about 50 percent of our rice crop each year and we are already trying to compete in a global market with well-documented illegal trade barriers.  Countries adding tariffs on top is almost too much to bear.”

“Rice was completely left off the list of eligible commodities for the Market Facilitation Program despite being specifically targeted for retaliation by China, the EU, and Turkey,” said Betsy Ward, President & CEO of USA Rice.  “Meanwhile major trading partners, like Mexico, are diversifying their supply base in anticipation of further trade disruptions, and we are seeing countries exceeding their WTO commitments dump rice in our domestic market.  We are looking at losses in the hundreds of millions of dollars.”

Ward said that although some agricultural commodities, like soybeans, have been hit harder than rice by the latest trade disputes, any disruption to markets has a large ripple effect on the export-dependent rice industry and her organization continues to push for long-term solutions.

“We would obviously rather sell our products on the open market than invoke a government program, but the fact is, the market isn’t open, and this trade war is magnifying that,” said Michael Rue, a California rice producer and chairman of the USA Rice Asia Trade Policy Committee.  “There are concrete steps the Administration can take right now to level the playing field that do not have an impact on taxpayers.”

USA Rice is urging the Administration to implement more permanent solutions that adequately address the rice industry’s losses, including action in the World Trade Organization (WTO) and import tariffs on WTO cheaters like Brazil, China, India, Thailand, and Viet Nam; raising the proposed duty on rice imports from China to 25 percent to match China’s recent hike in duties on U.S. rice; ramping up inspections on all imported rice to ensure compliance with U.S. food safety regulations; establishing normal trade relations with Cuba; including rice in negotiations with the EU on a new trade regime; increasing rice industry funding for market promotion overseas; and increasing rice purchases for nutrition programs and food aid.

“A good step the Administration could take is to end, once and for all, the debate over cash or food in food aid programs,” said Bobby Hanks, a Louisiana rice miller and chairman of USA Rice Food Aid Subcommittee.  “These programs should be about U.S.-grown food, not taxpayer cash to pay for foreign commodities, especially when it goes to purchase illegally subsidized rice from our competitors.”

USA Rice Chairman Brian King also pointed to a swift resolution to NAFTA renegotiations as essential.

“There is no trade agreement more beneficial to U.S. rice producers than NAFTA,” said King who also chairs the USA Rice Western Hemisphere Promotion Subcommittee.  “Continued uncertainty about its future is a substantial threat to our industry.  Mexico is our number one market and Canada is our number four market because of NAFTA, not in spite of it.”

“Rice already competes in an unfair global market, and now we and the rest of agriculture are paying for the benefits the steel and aluminum industries are enjoying as a result of President Trump’s tariffs and ensuing retaliations,” Ward said.  “USDA’s planned aid is important and should include rice, but it is no substitute for healthy markets and stable trade relationships which is what we all want in the end.”