1. Recent Market Developments and Short-Term Outlook Follow-up to the Guidelines for National and International Action on Rice 2001-2003 Joint Meeting of the 30th Session of the IGG on Grains and the 41st Session of the IGG on Rice Rome 10-11 February 2004 CCP: GR-RI 04/CRS.4

2. Recent Market Developments and Short-Term Outlook 1 What are the Guidelines? … a voluntary code of action to: Achieve a balance between production consumption and trade in rice Prevent distortions and restrictions on world markets Foster the development of the rice sector in developing countries through multilateral cooperation

3. Recent Market Developments and Short-Term Outlook 2 Review of Rice policies 2001-2003 IGG Documents CCP: GR-RI 04/3-Supp.1: Legal text of the Guidelines and Statistical annexes CCP: GR-RI 04/3: Synopsis of major policy developments and recommendations for special consideration by the IGG Food Policy Review - 2002

4. Recent Market Developments and Short-Term Outlook 3 Context to policies Launching of a new Round of MTN International rice prices still low

5. Recent Market Developments and Short-Term Outlook 4 Rice Production Policies General production policies – by region Market stabilization measures and producer price support

6. Recent Market Developments and Short-Term Outlook 5 General Production Policies In Asia Self-sufficiency objectives Yield enhancement through hybrid seeds and biotechnology Diversification out of marginal lands Move from quantity to quality objectives

7. Recent Market Developments and Short-Term Outlook 6 General Production Policies In Africa Promotion of in-valley, low land production Diffusion of Nerica varieties and of short-cycle varieties Rehabilitation of irrigation schemes and transfer of their management to farmers

8. Recent Market Developments and Short-Term Outlook 7 General Production Policies In Latin America and the Caribbean Policies based on consultations with the private sector Limited interference from governments Yield enhancement through research in new rainfed and irrigated varieties Solving land tenure problems

9. Recent Market Developments and Short-Term Outlook 8 General Production Policies In the Chinese Prov. of Taiwan, Japan, the Rep. of Korea and Malaysia Restructuring and consolidation of farms to improve competitiveness Cuts to production, principally through land diversion programmes

10. Recent Market Developments and Short-Term Outlook 9 General Production Policies In the European Union New policy regime as of 2004/05 50% cut in Intervention prices 75 000 tonnes ceiling on intervention Much higher “decoupled” payments per hectare 8% reduction in rice base areas

11. Recent Market Developments and Short-Term Outlook 10 General Production Policies In the United States The 2002 Farm Act reintroduces target prices for the calculation of counter-cyclical payments Direct payments down but loan benefits up.

12. Recent Market Developments and Short-Term Outlook 11 Market stabilization Support prices…. Widely used in Asia, but very little in LAC or Africa In general stable, but some were raised Price support remains very high in a number of countries

13. Recent Market Developments and Short-Term Outlook 12 Market stabilization Large government procurement purchases especially in India and Thailand

14. Recent Market Developments and Short-Term Outlook 13 Market stabilization Large releases from stocks in China

15. Recent Market Developments and Short-Term Outlook 14 Alternatives Instruments for Market / Prices Stabilization Market insurance Futures (India, Thailand) Contract between producers and millers/traders (Vietnam, Russian Fed.) Crop absorption schemes (Colombia, Ecuador, Peru, etc.)

16. Recent Market Developments and Short-Term Outlook 15 Consumption and Marketing Policies Retail price controls diminished Subsidized rice sales better targeted to the needy Programmes to raise consumption (Japan, the Rep. of Korea, EU) Liberalization of domestic marketing (India, Myanmar, China)

17. Recent Market Developments and Short-Term Outlook 16 Rice Trade Policies Major developments New WTO members (China, Chinese Prov. of Taiwan, Cambodia, Nepal) important for rice Reforms of State trading enterprises

18. Recent Market Developments and Short-Term Outlook 17 Export Measures Council for Rice Trade Cooperation Governments active in finding new markets Tightening of export quality standards and minimum export prices Relaxation of export restrictions Growing use of subsidies by some developing countries

19. Recent Market Developments and Short-Term Outlook 18 Subsidies boost exports by India

20. Recent Market Developments and Short-Term Outlook 19 Import measures New WTO members opened tariff quota Relaxation of import monopolies Ample use of tariff and non-tariff barriers Recourse to safeguards, anti-dumping clauses and to phytosanitary measures Tighter controls to halt smuggling

21. Recent Market Developments and Short-Term Outlook 20 Food aid shipments

22. Recent Market Developments and Short-Term Outlook 21 Rice Reserves Large stock draw-downs, especially in India and China, to reduce the burden on public finances China largely internalized the adjustments by reducing production India transmitted the burden of its adjustment on world markets, by subsidizing exports

23. Recent Market Developments and Short-Term Outlook 22 Issues for special consideration by the Group Areas of progress – para 47 Areas of concern – para 48 Secretariat recommendations – para 49 …should governments be urged to raise production?

24. Recent Market Developments and Short-Term Outlook THANK YOU Concepción Calpe Basic Foodstuffs Service Commodities and Trade Division Economic and Social Department FAO (Room D-823) Viale delle Terme di Caracalla - 00100 Rome, Italy Tel. 39-06570554136 - Fax 39-0657054495 E-mail: Concepcion.Calpe@fao.org