Italy wants the European Union to scrap Cambodia’s tax exemption for rice imports, according to leaked excerpts of a dossier prepared by that country’s Ministry of Economic Development.

The Italian government’s submission states that the EU’s duty-free treatment of Cambodian rice has reduced Italy’s raw rice market price, has caused a 22 per cent decline in annual rice plantings and discourages farmers from continuing to grow the crop.

“This will cause an irreversible deterioration of the economic and financial performance of the sector to which it will be impossible to remedy, resulting in jobs crisis and serious risk of failure,” reads one the excerpts, which were leaked by Italian rice industry website risoitaliano.eu.

It adds that with Italian rice prices at about $870 per tonne and Cambodian prices at $590 per tonne, Italian producers are unable to compete. Italy is asking the EU to impose a Cambodian rice import tariff of $230 per tonne to essentially level the playing field.

Sok Puthyvuth, president of Cambodia Rice Federation, said yesterday that more than 80 per cent of Cambodia’s rice exports are shipped to the EU.

“The EU is a big market for Cambodia, and we cannot lose our tax exempt status. We will discuss with the members for a solution. Our goal is to expand the market, so we will not stand still,” he said.

In the first five months of this year, Cambodia exported 115,720 tonnes of rice to European countries. More than 3800 tonnes were exported to Italy.