At the request of the Obama Administration and Congress, the U.S. International Trade Commission (“ITC”) recently published a fact-finding report entitled “Rice: Global Competitiveness of the U.S. Industry" (click here for full report). The report examines the heavy government intervention in rice trade, including export and import restrictions that seek to keep prices affordable and encourage domestic production to promote national self-sufficiency. The ITC found that as a result of such policies, total global rice exports account for less than 10 percent of global production, a figure that is significantly less than for other grains and oilseeds, despite the fact that rice serves as a staple in the diet of more people than any other food.
The U.S. rice industry exports about half of its annual production, taking advantage of its reputation as an efficient and reliable supplier of high-quality rice. The ITC found that, although U.S. rice producers face little direct competition in the domestic market, they have recently lost market share in key export markets. Specifically, the ITC found that the U.S. industry has lost market share to low-priced Asian suppliers of long-grain rice (e.g., Vietnam) and high-quality South American suppliers (e.g., Brazil and Uruguay). The losses of U.S. market share have been particularly significant in several traditional key U.S. export markets, including Mexico, Central American, the European Union, Haiti, and Ghana.
At the same time, government support for the U.S. rice industry has significantly decreased since 2000, and is expected to decrease further going forward. According to the ITC, annual U.S. spending on rice programs averaged $377 million from 2007 to 2013, but is projected to decline to $244 million from 2014 to 2018.
The ITC report, which features quantitative analyses of policy and production changes that affect the global rice industry, conveys the ITC’s objective findings and independent analyses; the ITC does not make any policy or other recommendations. The ITC’s findings, however, make clear that the U.S. rice industry faces—and will continue to face—much stiffer competition in key export markets.