1. A Composite Index of Market Access for the Export of Rice from the U.S Eric Wailes, University of Arkansas

2. Overview  Study approach  US rice sector structure  Price Ladder  Prices  Costs  Subsidies/Taxes  Assessment of CIMA

3. Study approach  US export a wide variety of rice types to 160 countries  Composite Index of Market Access (CIMA)  Used similar methods as Uruguay and Thailand case studies  Period of study: 2006, 2007 and 2008

4. Data sources  Trade data  USDA FAS GATS online (10 digit HS schedule)  UN COMTRADE  Price data  USDA  Cost data  Industry sources and cost models  Subsidies and tax data  WTO, USDA

5. Data on the U.S. Rice Sector Item m. cwt.2005/062006/072007/082008/09 Beginning Stocks 37.74339.329.4 Production222.8194.6198.4203.7 Imports17.120.623.919.2 Total Supply277.7258.2261.6252.4 Domestic Use 119.9128.1127.4128.4 Exports114.890.8104.793.6 Total Use234.7218.8232.2222 Ending Stocks 43.039.329.430.4 Exports/Prod uction 51.546.752.845.9

6. Major US rice import markets

8. US rice exports by type

10. US rice industry product flow

11. US rice product process flow

12. Market structure of US Rice  ~ 10,000 farms  ~2,000 on-farm drying/storage facilities  ~ 300 commercial elevators (attached/unattached to mills)  ~ 40 rice mills (cooperatives are dominant in Arkansas and California)  Major export ports: New Orleans, San Francisco, Houston

13. Price Ladder 1. Prices received by farmers 2. Elevator/mill paddy price 3. Processed price at mill 4. Port price (FOB) 5. Destination price (CIF) 6. Final price at importer

14. Prices received by farmers Source: USDA, ERS, Rice Outlook, 2008

15. Prices at elevator/mills Source: Industry sources  Rough rice price  Equals Farm price  Plus:  Transport cost farm to elevator/mill $9.92/mt  Drying/storage costs $ 29.39 / mt  Assume average storage 6 months  Inspection/grading costs $ 1.76 / mt

16. Prices at elevator/mills Source: Industry sources and cost models  Processed price  Rough rice price at mill  Converted to milled equivalent  Brown rice (conversion factor 0.8)  Milled rice (converstion factor 0.55 (long), and 0.6 (medium))  Plus:  Milling costs:  Brown $45.45/mt;  White $54.54/mt

17. Prices at ports (FOB) Source: Industry sources and cost models  Elevator rough rice price or mill processed price Plus:  Transport cost to port from elevator or mill  Inspection and certification fees  Inspection fees $3.31/mt  GM certification $10/mt

18. Prices at importer (CIF) Source: Industry sources and cost models  Export price (FOB)  Plus:  Ocean freight rates and insurance  Mexico: $30/mt  EU: $87/mt  Turkey: $95/mt  Japan: $86/mt

19. Prices at importer (with taxes/subsidies) Source: WTO, USDA, EU Commission  Import price (CIF)  Plus:  Duties and taxes  Mexico: $0/mt  EU: 65 euro/mt plus 4% VAT  Turkey: 34% ad valorem/mt  Japan: Markup 292 Yen/kg for MA and 341 Yen/kg for over MA

20. Calculation of CIMA Source: WTO, USDA, EU Commission  Barriers to Market Access (BMA) equals  Import duties + Excise taxes + health/safety standard costs  Barrier to market access percentage (BMAP) equals  BMA/Import price (CIF) * 100  CIMA = 1 – BMAP

25. Comments/questions about CIMA  Are all forms of protection quantifiable?  Licensing, TRQs, etc.  Why aggregate?  Value as a benchmark?  Value in negotiations?  Value in dispute resolution?

26. Data issues for CIMA  More difficult for more differentiated products  Easier for countries with strong information/data systems about production, processing and marketing costs  To extent that data relies on private sector, it invites strategic behavior in terms of access to and quality of information provided.