WRITTEN QUESTION E-2726/97 by Johanna Maij-Weggen (PPE) to the Commission (1 September 1997)

Subject: Market in (Indica and Japonica) rice

Does the Commission have available any recent statistics concerning Community production, consumption and sale of Japonica and Indica rice? Can it give a summary of the situation on the Japonica and Indica rice market in respect of the past two years and this year (1995-1996-1997)?

Can the Commission give a breakdown of total Community production of and shortfalls in Indica rice and compare those figures with imports from overseas countries and territories, the ACP States and third countries in respect of the past two years and this year (1995-1996-1997)?

How does the Commission explain the fact that, despite the shortfall of Indica rice in the Community, such rice is being offered for intervention? How does the Commission justify the preference for Indica rice from the OCTs although their price is higher than that for rice produced in the Community?

Can the Commission indicate how the OCTs could distort the market for Japonica rice when they export no Japonica rice but exclusively Indica rice to the Union? What does the Commission think is at the root of the crisis on the market for Japonica rice?

Can the Commission explain why it approaches the entire rice market as if it were a uniform market when different types of rice (including Japonica and Indica rice) are involved which are not interchangeable? Can it say why it lumps all types of rice together in its approach and treats them as one type, thereby causing the impression that the OCTs are at the root of the crisis on the European rice market although the OCTs export only Indica rice, of which there is a shortfall in the Community?

What concessions involving rice has the Commission granted over the past three years to third countries (not OCTs or ACP States), and why has no distinction been made between Japonica and Indica rice, given the surpluses on the Japonica rice market in the Union? Does the Commission intend to grant further concessions to third countries? Why, and on what terms?

Answer given by Mr Fischler on behalf of the Commission (27 October 1997)

The Community produces a surplus of japonica rice. Between 1988 and 1996 the average self-sufficiency rate was almost 120%. Self-supply capacity for indica rice increased from 46% in 1995/96 to 63% in 1996/97 following the end of the drought in Spain and Portugal.

This increase coincided with a sharp rise in imports of indica rice originating in the overseas countries and territories (OCT), from just under 200 000 tonnes of milled rice equivalent in 1995 to more than 270 000 tonnes in 1996, accounting for 41% of total indica rice imports into the Community. The United States is the second-largest exporter of indica to the Community but accounts for the much lower volume of 27% of total imports. Its rice does not enjoy the preferential terms granted to the OCT. Imports of rice originating in the African, Caribbean and Pacific countries have been marginal (13 000 tonnes of milled rice equivalent in 1995 and 4 500 tonnes in 1996).

The combination of a normal indica rice crop in 1996/97 and an import volume in excess of the supply shortfall resulted in intervention purchasing of indica. Preferential terms for indica rice imports from the OCT (unlimited quantity at nil duty) were granted in 1991.

In addition to the problem of indica rice, imports from the OCT have indirectly created problems for Community japonica rice since certain indica growers have switched to japonica, which is in surplus and is subject to export restrictions under the General Agreement on Tariffs and Trade (GATT). This has contributed to the lowering of japonica prices and hence to sales of japonica to intervention resulting in higher costs to the Community.

The biggest concession made in the last three years has been opening by the Council of certain tariff quotas for rice and broken rice after negotiations held under GATT Article XXIV.6 following the accession of Austria, Finland and Sweden.