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Cablegate: Demarche Request - Release of Japanese Rice Stocks

VZCZCXYZ0015
OO RUEHWEB

DE RUEHC #0792 1342029
ZNR UUUUU ZZH
O 132021Z MAY 08
FM SECSTATE WASHDC
TO RUEHKO/AMEMBASSY TOKYO IMMEDIATE 4145
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC IMMEDIATE

UNCLAS STATE 050792

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: AID EAGR ECON ETRD JA
SUBJECT: DEMARCHE REQUEST - RELEASE OF JAPANESE RICE STOCKS


1. (SBU) This is an action request. Please see para 4.

2. (SBU) Japan currently holds stocks of approximately 2.4
million metric tons (MT) of rice, of which 1.5 million MT was
imported to fulfill its Uruguay Round Minimum Market Access
requirements (MMA). Under its MMA obligations, Japan is
obligated to purchase 682,000 MT of imported rice annually.
About half of the MMA rice purchased by Japan is of U.S.
origin. This rice is stored in near-optimal conditions, but
some may be damaged due to long-term storage.

3. (SBU) In light of the food crisis, some countries and
organizations have called upon Japan to release its rice
stocks onto the international market. It is unclear whether
Indonesia and the Philippines have already approached Japan
directly to sell or donate its stocks into the market to
alleviate the current pricing problem. However, the Japanese
press reported on May 11, 2008, that according to the
Philippines National Food Authority, "Japan has offered to
ship 60,000 MT of rice to the Philippines to help the
world,s biggest importer of the grain boost its stockpiles."
In the past, Japan has exported some foreign rice as food
aid to North Korea and after the Tsunami, but U.S. rice
producers feel strongly that this issue must be discussed in
the right context with Japan so that exports are not seen by
Japan as an unlimited venue to dispose of MMA rice.

4. (SBU) ACTION REQUESTED: In light of the global food price
crisis, Embassy is requested to deliver a demarche
emphasizing the following objectives to the Ministry of
Agriculture, Forestry and Fisheries (MAFF) at the most senior
level possible:

-- Emphasize that the current conditions in the global rice
markets are very unusual. Even though aggregate supply,
demand, and stocks are not significantly changed over recent
years, we have seen unprecedented sudden price increases.
These market conditions have created increased risk of hunger
and civil unrest in certain countries, while these high
prices have significantly impacted the budgets of the World
Food Program and other food aid donors.

-- Communicate the importance that the USG places on efforts
to address the current food crisis. President Bush recently
announced approximately $200 million in emergency food aid
and has also asked Congress to provide an additional $770
million to support food aid and development programs.
Together, this amounts to nearly $1 billion in new funds to
bolster global food security.

-- Thank Japan for the significant steps it is also taking to
increase its contributions to food aid programs in response
to rising food prices. Japan recently announced USD 100
million in emergency aid to help poor countries cope with
rising food costs. Suggest that the USG is interested in
exploring ways in which our two countries can alleviate
hunger and help calm global rice markets.

-- Remind your interlocutor that the USG has traditionally
opposed the re-export of the rice which Japan imported under
its WTO Minimum Market Access Obligations. The USG
understands that Japan may have been approached about using
its rice stocks for food aid as well. Japan is obligated to
make this rice available to Japanese consumers.

-- Communicate that the unique conditions in the rice market
this year, coupled with the growing humanitarian and
political dimensions of recent food price increases in
developing countries, may warrant consideration of taking
additional measures with respect to the release of Japan's
rice stocks on this occasion. Suggest that our experts get
together soon to discuss this idea. Point out that this will
also provide an opportunity to discuss our traditional
concerns that might arise. Offer to facilitate such a meeting
with Embassy staff.

-- Resist offering additional details regarding what
additional measures the GOJ can take to address the sudden
price increases in rice. Defer any request for detailed
discussions to future discussions by experts.

5. (SBU) Embassy is requested to report back the results of
this engagement by COB Thursday, May 15 (local Washington, DC
time).
RICE

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