Italy Steps Up Fight Against Cambodian Rice

Rice farmers in Italy plan to block four major grain exchanges in the country this week over what they say is the European Union’s failure to keep Italian rice competitive against that of cheaper Asian rivals including Cambodia, which is given duty-free access to European markets.

Starting today and lasting all week, rice farmers and members of various agriculture unions will use banners and tractors to disrupt the exchanges in Milan, Novara, Vercelli and Pavia, calling for the E.U. to revoke the preferential trade agreement Cambodia benefits from.

Under the Everything But Arms (EBA) scheme, which gives preferential market access to least developed countries, Cambodia has seen rice exports increase year on year, driven largely by European buyers.

During the first half of this year, Cambodia exported 177,928 tons of milled rice, up 1 percent from last year. Eight of the top 10 importers of Cambodian rice are European countries, accounting for 67 percent of exports so far this year.

But as Cambodia’s rice industry has blossomed, Italian farmers say their industry is suffering.

“The duty-free importation of ‘indica’ milled rice is causing great prejudice to the marketing of the E.U. production of that rice. This will limit the possibility for our farmers to remain competitive,” the Italian delegation said in a paper given to the E.U.’s Agriculture and Fisheries Council in December.

“Moreover the same survival of the whole E.U. rice milling undertakings is at risk,” the paper continued.

Roberto Carriere, director of the Italian Rice Millers Association, said the long tradition of rice farming in the north of the country could soon vanish if the situation continues.

“Italy is worried about Cambodian rice and…the U.K. is also upset,” Mr. Carriere said.

“The problem doesn’t concern the volume of rice grown but the problem is the price levels,” he said. “Cambodian rice is very competitive in price and Italian growers have higher costs of production and they do not have arable crop and the weather is not as convenient.”

Last October, Italian rice was being sold at $353 per ton, which has now fallen to $300 per ton, Mr. Carriere added.

This is not the first time Cambodian rice has come under fire from the E.U.

In December, E.U. Trade Commissioner Karel De Gucht alleged that some of the rice coming from Cambodia into Europe was illicitly mixed with Vietnamese rice. He warned that the violation could see the crop’s removal from the EBA agreement.

Van Vichet, deputy secretary of the Alliance of Rice Producers and Exporters of Cambodia, denied at the time that any such contamination of exports existed.

Despite the pressure from Italy’s farmers, Roger Waite, spokesperson for agriculture and rural development at the European Commission, said the E.U. scrapping Cambodia’s preferential trade agreement “is simply not on the agenda.”

“The E.U. is well aware of its international commitments,” he said.

“As the [E.U. Agriculture] Commissioner [Dacian Ciolos] said in March, the E.U. is not self-sufficient in rice. 40 percent of E.U. consumption is covered by imports, in particular indica rice and broken rice which is precisely what the EBA countries have to offer,” he said in an email.

Hean Vanhan, deputy director-general of the Ministry of Agriculture’s general directorate of agriculture, said any trade disruption to the country’s most treasured commodity would be dire.

“I don’t know yet about this issue,” he said of the Italian farmers’ protest. “But if there is a change to the EBA scheme, we will have a problem with our rice exports to the E.U.”

(Additional reporting by Hul Reaksmey)

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