USA RICE FEDERATION VICE-CHAIRMAN RUE EATS RICE DURING A PROMOTION IN TOKYO
Issei Kato  /  REUTERS
USA Rice Federation Vice-Chairman Michael Rue eats cooked rice Thursday during a Tokyo promotion for rice produced in the United States. The federation hopes to get 120 shops in Japan to sell U.S. rice by the end of this year.
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updated 3/7/2004 6:43:48 PM ET 2004-03-07T23:43:48

American rice growers are launching a new push to woo Japanese diners, despite the uphill battle they face in a country that takes its main staple very, very seriously.

U.S. rice growers last week visited Japan _ the world's second largest rice market _ to expand a fledging network of local retail stores that market American rice. Although Japan lifted a ban on rice imports in 1995, the Americans said Thursday that Japan's complex import system for rice still prevents them from shipping a consistent supply at stable prices.

"I don't think that we are suggesting the system is rigged," Michael Rue, vice chairman of the USA Rice Federation, told reporters in Tokyo. "The structure of the system makes it difficult to have a continuing business and have yearlong marketing plans."

Officials from the USA Rice Federation, which groups rice farmers and millers, said imported rice sits in Japanese government warehouses, failing to find its way to the market.

Rice is a sensitive issue in Japan, where the government has long sought to protect the country's farmers. Tokyo levies a 490 percent tariff on rice imports, and has opposed tariff-lowering proposals in ongoing global trade negotiations on agricultural products.

Under World Trade Organization requirements, Japan imports at least 770,000 tons of rice a year. But nearly 90 percent of that is processed into rice crackers, soup paste and sauce.

American growers also face picky consumers here, who believe foreign rice is dry, tasteless and drenched in chemicals.

In addition to the fickle market, U.S. rice prices have shot up this year under the Japanese import system that sets the prices, making American rice competitive against medium-grade Japanese rice but more expensive than lower-grade Japanese rice and Chinese imports.

Price pressures
Last year, American rice sold for about 1,700 yen ($15) for an 11-pound bag. This year, the same bag sells for about 2,300 yen ($21). Despite the price hike, U.S. rice is still 20 percent cheaper than medium-grade Japanese rice and half that of top-grade Japanese rice.

But Toshichika Tamura, who owns a shop that's part of the U.S. rice network, said he was disappointed by the steeper price for U.S. rice this year, when a poor harvest has pushed up Japanese rice prices.

"I thought it was a big chance for California rice, and I wanted to be able to sell the bags at under 2,000 yen ($18)," Tamura said.

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Tokyo denies import rice prices surged in relation to Japanese rice prices, saying they are determined by the global market and other factors.

Still, American rice farmers are undeterred.

To court Japan's market, American rice farmers have been growing strains of Japanese premium-brand rice, working with Japanese rice experts and millers to improve quality and getting the word out that U.S. rice isn't soaked with chemicals.

Last year, the USA Rice Federation signed an agreement with 44 Japanese rice shops, mostly in the areas around Tokyo and Kyoto, to market American rice.

This year, the group plans to expand the network to 120 shops, including southwestern Fukuoka and northern Hokkaido, to sell 500 tons of rice, up from 100 tons last year.

Half of the rice produced in the United States is for export, and America exports more than 300,000 tons of rice to Japan a year.

But the federation still has to convince consumers like Fumio Takahashi, who spurns American rice.

"American rice is no good," Takahashi said after purchasing a bag of Japanese rice at a Tokyo store. "The water is different."

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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