VZCZCXYZ0015
OO RUEHWEB

DE RUEHC #1535 1352352
ZNR UUUUU ZZH
O 142344Z MAY 08
FM SECSTATE WASHDC
TO RUEHKO/AMEMBASSY TOKYO IMMEDIATE 0000
INFO RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC IMMEDIATE
RHEHNSC/NSC WASHINGTON DC IMMEDIATE 0000

UNCLAS STATE 051535 
 
SENSITIVE 
SIPDIS 
DEPT PASS USTR FOR ASTEPHENS 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR EAID JA
SUBJECT: MEETING ON JAPAN'S RICE STOCKS 
 
REF: STATE 50792 
 
¶1. (SBU) This is an action request.  Please see para 4.  This 
cable supersedes guidance provided in reftel. 
 
¶2. (SBU) U.S. Department of Agriculture (USDA) Foreign 
Agricultural Service (FAS) Administrator Yost met with 
Embassy of Japan Economic Minister and Acting DCM Yokoi on 
May 14, 2008 to discuss the global food crisis and steps that 
Japan could take to address it.  Yost noted that the position 
of the U.S. Government (USG) has traditionally been that the 
rice which Japan imports under its Uruguay Round Minimum 
Market Access (MMA) obligations is intended for domestic 
consumption in Japan and should not be stored in warehouses 
or given away as food aid.  However, due to the unprecedented 
increases in rice prices around the world, Yost said that the 
USG was prepared to discuss options that could include a 
release of Japan's rice stocks as an extraordinary measure in 
the current fiscal year.  He said that these discussions 
should take place in the context of technical discussions 
between USG and GOJ experts.  Yokoi agreed that the first of 
these discussions could take place on May 23 when GOJ rice 
stock expert Sato visits Washington. 
 
¶3. (SBU) USDA and USTR have fielded a significant number of 
press inquiries regarding the position of the USG with 
respect to the release of Japan's rice stocks as food aid. 
In the meeting, Yost shared the following formulation of USG 
press points with Yokoi (this press release has been used 
with Japanese media in Washington): 
 
BEGIN PRESS POINTS: 
 
The United States places a great deal of importance on 
responding to the current food price crisis. President Bush 
recently announced approximately USD 200 million in emergency 
food aid and has also asked Congress to provide an additional 
USD 770 million to support food aid and development programs. 
 Together, this amounts to nearly USD 1 billion in funding to 
bolster global food security. 
 
The current conditions in the global rice market are very 
unusual.  Even though aggregate supply, demand, and stocks 
have not significantly changed over recent years, we've seen 
unprecedented sudden price increases.  Export controls, 
hoarding, and panic buying have all contributed greatly to 
market conditions. 
 
These market conditions have created increased risk of 
hunger, while these high prices have significantly impacted 
the budgets of the World Food Program and other food aid 
donors. 
 
In light of the food price crisis, some have called upon 
Japan to release its rice stocks onto the international 
market.  A significant portion of Japan's rice stocks is made 
up of foreign rice imported under Japan's World Trade 
Organization (WTO) obligations. 
 
Because the rice is imported under the terms of the WTO 
Uruguay Round Agreement to provide access to Japan's domestic 
market, the view of the United States has been that, rather 
than go into government stocks, this rice should be consumed 
in Japan's domestic market. 
 
However, 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, warrant considering extraordinary measures on this 
occasion to calm the international rice market. 
 
U.S. officials will be conveying these views to the 
Government of Japan, and we hope to coordinate our food aid 
donor efforts in the coming weeks to address the urgent needs 
around the world. 
 
END PRESS POINTS. 
 
¶4. (SBU) ACTION REQUESTED:  Embassy is no longer requested to 
seek meetings with GOJ officials to discuss the disposition 
of Japan's rice stocks.  In communications with the 
Government of Japan, Embassy should flag this press release 
to the attention of officials at the Ministries of Foreign 
Affairs and Agriculture and request that they provide a 
response to the message delivered in the Yost-Yokoi meeting. 
Embassy may draw from the language provided in this cable. 
If asked, Embassy may also draw from the following Qs and As: 
 
Question:  Would Japan be breaking its WTO obligations if it 
exported its rice stocks? 
 
Answer:  This is a complicated question because Japan does 
have international commitments.  But, again, the conditions 
of the current rice market are unique and warrant food aid 
donors talking with each other. 
 
Question:  How much rice does Japan hold in its stocks? 
 
Answer:  Japan currently has stocks of 2.4 million MT of 
rice, of which 1.5 million MT was imported to fulfill their 
WTO obligations.  Under its WTO obligations, Japan is 
obligated to purchase imported rice annually.  About half of 
the imported rice stocks are from the United States, with the 
remainder primarily from Thailand and Vietnam. 
 
Question:  Japan fell 65,000 MT short of fulfilling its MMA 
commitments in FY 2007/08, citing high prices and the global 
supply situation. What is the position of the U.S. Government 
with respect to Japan,s outstanding MMA commitments? 
 
Answer:  We are committed to working closely with the 
Government of Japan to identify a way for Japan to fulfill 
its international obligations without negatively impacting 
world markets. 
RICE