U.S. Rejects Call to Probe Japan’s Rice Import Ban : Yeutter Says Move Won’t Affect Close Senate Races in California, Louisiana

The Reagan Administration on Thursday dismissed a complaint by domestic rice growers seeking action to open Japanese markets to California rice.

The issue has generated a major controversy in Japan, where rice farmers are a powerful political force and where rice imports are all but banned. Disappointed American growers said the Administration’s action could result in a heated political dispute here as well.

“This government doesn’t have the political will or commitment to challenge Japan’s protectionist policy,” said J. Stephen Gabbert, executive vice president of the Rice Millers Assn., which includes growers and shippers.

California Rep. Vic Fazio (D-Sacramento), whose rice-growing constituents have the most to gain by liberalized Japanese trade, said he will push for legislation imposing tough import restrictions on Japanese goods.

Sees No Issue

“I intend to do everything in my power to ensure that appropriate retaliatory measures are taken,” he said, predicting that Congress will consider far-reaching trade bills early next year.

The American growers’ request for an investigation under U.S. trade laws of Japan’s closed market was formally rejected Thursday by Special Trade Representative Clayton K. Yeutter. His decision will not become an issue in close U.S. Senate races in California and Louisiana, Yeutter told a news conference here, because voters are “more sophisticated and intelligent than that.”

Yeutter promised that Japan’s virtual ban on rice imports will be discussed when the world’s trading nations begin negotiations next year for a new round of worldwide commerce agreements. The United States expects Japan to reduce some of its subsidies to the rice industry. If Japan has not responded to U.S. concerns by mid-1987, Yeutter said, “we will promptly re-examine the issue.”

‘Immense Sensitivity’ of Issue

However, he hastened to offer reassurances of a conciliatory U.S. approach, saying that the Reagan Administration recognizes the “immense sensitivity” of the issue. “Japan need not fear for its food security, for all nations are entitled to secure the survival of their people,” Yeutter said.

But, he acknowledged, Japan’s subsidy policy gives protection to local rice producers “far in excess of legitimate security needs.”

Japanese government subsidies to farmers keep the price of rice in Japan 10 times higher than world market levels, according to U.S. industry estimates. Most Japanese rice is grown on small farms, whose productivity and efficiency lag far behind the output of American farms, the U.S. industry says.

A fully open Japanese market would buy $1.6 billion worth of rice from California, the only state producing the shorter-grain rice consumed in Japan, Gabbert claimed. (Yeutter called that estimate “a dramatic exaggeration.”)

About 92% of California’s rice production is in short- and medium-grain varieties this year, in contrast to the long-grain rice that is a specialty of the Southern rice-belt states. About two-thirds of the total U.S. crop is marketed in 80 to 100 countries, Gabbert said.

“I am sympathetic to the concerns of the Rice Millers Assn. and convinced of the legitimacy of many of their grievances,” Yeutter said, but the issue will be “on the negotiating table” as part of the general international trade discussion to be held under the auspices of the Geneva-based General Agreement on Tariffs and Trade.

“That’s probably a statesman-like approach,” commented Ralph Newman, president of Farmers’ Rice Cooperative in West Sacramento, “but we’re not talking about statesmanship. We’re talking about fair trade--today.”

Michael L. Cook, president of the state’s other major cooperative, the Rice Growers Assn. of California, called the decision “expected.” Yeutter’s intent to put the matter before the 92 members of GATT next year, he added, constitutes “reasonable progress.”

Japan and other nations involved in the forthcoming trade talks have promised to negotiate removal of barriers to agricultural trade, such as rice subsidies, he said. In the past, however, Japan has said it does not consider the rice issue negotiable.