www.checkbiotech.org ; www.raupp.info ; www.czu.cz

The Rice Producers of California (RPC) retained Bryant Christie Inc. (BCI)
to evaluate the potential for market acceptance of the genetically modified
(GM) rice in Japan, Korea, Taiwan, and Turkey. These markets account for
about 40% of California?s annual rice crop and are therefore economically
important to the California industry. Findings in this study come from desk
research and interviews with the rice trade in each country. This report
summarizes these findings, February 2007.

Japan?s rice import policies and its government?s reaction to recent
reports of certain GM rice in U.S. supplies, coupled with cultural
sensitivities to rice, as well as low acceptance of GM foods by the Japanese
public and the Japanese rice trade, reduce the likelihood of the market
accepting U.S. GM rice. In fact, strong evidence demonstrates that without
consumer education and changes in government policies, efforts to
commercialize GM rice in the U.S. could result in the loss of the Japanese
market to U.S. rice. Considering that Japan accounts for roughly half of all
California rice export sales, or the equivalent of between 20% and 25% of
California?s annual rice production, loss of the Japanese market could
significantly impact the California rice industry.

Korea is also economically important to the California rice industry as
approximately 86% of Korea?s rice imports from the U.S. is produced
inCalifornia. As in Japan, rice is a politically sensitive topic in Korea.
Although market access for U.S. rice under Korea?s minimum market access
(MMA) agreement is improving and GM soybeans and corn are currently imported
for feed and processing, the majority of Korean rice trade members
interviewed for this report opposed the purchase of GM rice. This sentiment
is also shared by Korean consumers, though some evidence indicates that
consumer education campaigns may be capable of changing this opinion in the
future.

Unlike Japan and to a lesser extent Korea, Taiwan offers more commercial
opportunities for U.S. rice imports. This is particularly the case
forCalifornia rice which accounts for nearly all U.S. rice exports to
Taiwan. However, like Japan and Korea, challenges for GM food products are
present in Taiwan. While Taiwan imports GM soybeans for human use and animal
feed, the Taiwanese rice trade members interviewed for this report were
reluctant to accept imports of GM rice. Taiwanese consumers are generally
less aware of GM foods than their Japanese and Korean counterparts and it is
possible that their perception of GM foods could improve through consumer
education efforts.

Turkey?s restrictive import policies and ambiguous regulatory framework for
GM foods create significant market access barriers for GM rice in the
near-term. Further, while the results of the in-country surveys conducted
for this report indicated that it may be possible to locate a Turkish buyer
for GM rice, the results also indicate that consumers might reject GM rice
given the information to which they are currently exposed. However, even
with these obstacles, Turkey shows the most promise for U.S. GM rice
relative to the three other markets covered in this report.

In conclusion, it would appear that the rice trade in Japan, Korea, Taiwan,
and to a lesser extent Turkey has little interest in importing GM rice at
this time, even in situations involving cost advantages and full regulatory
approval of GM rice. Due to the risks involved, this report recommends that
the U.S. industry not seek commercialization of GM rice in the near term and
any longer term effort be accompanied by targeted and extensive
education/communications campaigns in each market. Even then, there should
be a full understanding that the pursuit of such commercialization could
jeopardize existing U.S. rice exports to Japan.

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