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Logo of Phnom Penh Post newspaper Phnom Penh Post - Italy demands ‘fairer’ rice deal

An employee works at a rice shop in Phnom Penh
An employee works at a rice shop in Phnom Penh Italy is arguing that its locally grown rice is unable to compete against tax-free imports from Cambodia. Eli Meixler

Italy demands ‘fairer’ rice deal

Italy has demanded that the European Union restrict Cambodia’s duty-free import status, as concerns over the survival of that country’s rice sector appear to be reaching a fever pitch.

According to rice industry website Oryza, the Italian government has officially submitted a request to the EU calling for a new safeguard clause which, if approved, could end EU nations’ zero-tariff treatment of rice imports from Cambodia.

“Abnormal increase of import is reducing quotations of European rice, bringing it under production costs level; this is strongly damaging our farmers and millers,” Italy’s vice minister for economic development was quoted as saying in Oryza’s report, posted late last week.

Under the Everything But Arms (EBA) agreement, which is granted only to developing countries, Cambodia pays zero tax on all non-weapon exports to EU member states, including rice.

The official complaint came a month after rice industry website risoitaliano.eu leaked excerpts from a dossier prepared by the Italian government. The document claims that the special treatment given to Cambodia by the EU triggered a 22 per cent decline in annual rice plantings in Italy.

The dossier adds that, with Italian rice prices at about $870 per tonne and Cambodian prices at $590 per tonne, Italian producers are unable to compete. The dossier requests that the EU impose a tariff of $230 per tonne on Cambodian rice imports to level the playing field.

Earlier this month, an Italian agriculture collective of farmers, including representatives from the Italian Association of Rice Industries, protested in some of Italy’s largest rice-growing regions.

EU Ambassador to Cambodia Jean-Francois Cautain yesterday said he was awaiting information from EU headquarters in Brussels and was unable to comment on Italy’s complaint.

Cambodian Rice Federation (CRF) president Sok Puthyvuth said there were mixed feelings in the Cambodian rice industry over the seriousness of Italy’s claims and that the EU had repeatedly assured the rice body of the future of Cambodia’s EBA status.

“We feel we still have the support from the EU. Some say we need to start bilateral talks with Italy; some say not to worry,” Puthyvuth said, adding that he hoped to commence communications with the Italian government as early as this week.

“We want to solve this problem but there needs to be better communication and there needs to be some compromise,” he said.

Ken Ratha, spokesman for the Ministry of Commerce, said the government was waiting for the CRF to clarify Italy’s complaint before issuing an official response.

Cambodian rice exports to the EU reached 380,000 tonnes at the end of 2013, up from 200,000 tonnes at the end of 2012.

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