Open Market Policy Could Ease Social Ills, He Says : Chief of U.S. Rice Growers Scores Japan

Japan’s refusal to import U.S. rice is the work of an “evil empire” of cooperatives manipulating its agricultural scene, the head of the U.S. Rice Millers’ Assn. said Thursday.

“(It) is a fantastic example of economic distortion and it basically stinks,” said Stephen Gabbert, president of the group of rice producers.

He said Japan could start to ease much of what he sees as its social problems by liberalizing its strictly controlled rice market.

In October, U.S. Trade Representative Clayton K. Yeutter rejected a complaint calling for sanctions under the new U.S. trade law that provides for penalties against nations with unfair trade practices.

Raps Cooperatives

However, Yeutter did say the complaint could be resubmitted if Japan failed to take steps to open its rice market during international trade negotiations set to begin in Montreal on Dec. 5.

Gabbert reserved his sharpest attack for the network of agricultural cooperatives that are powerful political lobbyists with huge economic resources.

Japan’s rice policy, Gabbert said, “is tied to a cooperative framework which I would characterize as basically an evil empire.”

The cooperative movement is supposed to help Japanese farmers and consumers, but “it exploits farmers and gouges consumers,” he claimed.

He said the cooperatives had mounted an expensive lobbying effort in the United States against U.S. rice exports, resulting in what he saw as some “jaw-droppers” in American news reports and editorials saying Washington should not press Japan to open its sacrosanct rice market.

After laborious negotiations earlier this year, Japan agreed to accept more U.S. beef and oranges, but firmly rejected calls to open its rice market.

Rice is Japan’s staple food and the government policy is to keep self-sufficiency in rice, though it requires massive subsidies to farmers and retail prices more than triple those in the United States.

Gabbert contrasted the rice dispute with Japan’s penetration of the auto market in the United States.

“I smile to myself, thinking that Detroit should have been this clever to proclaim the same thing when Japanese auto makers started coming in and more than 900,000 workers lost their jobs and had to readjust and restructure,” Gabbert said.

“We didn’t hear anybody raising hell about that or claiming a sacrosanct cultural decision of the automobiles and American life,” he said. “And basically that indicates that we shouldn’t have any sacred or cultural cows in traditional relationships. These kinds of sensitivities should not be reasons for avoiding confronting trade issues.”

Rice in Japan costs $3.85 for 2.2 pounds, compared to $1 in the United States.

Japan’s 122 million people consume about 10.3 million tons of rice a year. The government subsidy last year, including some payments to keep paddy fields idle, was $3.6 billion.

Gabbert proposed a gradual opening of 2.5% a year of Japan’s rice market over a four-year period. Ten percent of Japan’s rice market would be as much as American growers could produce, he said.

Many Benefits Seen

Gabbert said he was aiming for $300-million worth of the Japanese rice market. He said American farmers can deliver milled rice at $400 a ton versus $2,500 a ton in Japan.

If Japan liberalizes its market, he predicted that Japanese farmers would become more efficient, that land and housing prices would go down because some paddy land would be freed for housing, and that Japanese consumers could spend less on agricultural products and more on manufactured imports, thus further helping the country reduce its huge trade surplus.

Gabbert noted that President-elect George Bush is a strong supporter of the move to force Japan to open its rice market.

The Rice Growers Assn., representing farmers in California, Arkansas, Texas, Louisiana, Mississippi, Missouri and Florida, has requested that Japan gradually liberalize imports to 10% worldwide in four years.