Learn, Elmer W. :

Californiaâ??s rice crop : market challenges , resource constraints Elmer W . Learn Californiaâ??srice industry faces nu - wetlands , and competingwith urban and required to effect any meaningful substitu - other agriculturalusers for water . Thus , Japanand Koreaâ??s trade poli - tion . ) merous challengesas it strives to Furthermore , during the next 20 years , cies are of specialimport to Californiaâ??s meet competitivepressures in the will see potential Californiaâ??s rice industry rice industry . coming decade . In addition to tradi - changesin domesticfarm programsand Althoughrice has never attained the s - tional demand consideration related trade regulations . status of a staplein Americandiets , per - population and income growth , and capita consumptionhas increased ap - Demand proximately 100 % since 1970to a level of - com - changingconsumer tastes Most rice grown in the world today be - 21 pounds per year ( comparedwith petitiveness will be affectedby fu - longs to one of two classes : indica and ja - Japanâ??s 150pounds or Indonesiaâ??s 320 ) . ture trade regulations and price ponica.Indica is the most common , a fam - This upward trend in US . consumption , supportpolicies . On the supply grown primarily ily of long - grain varieties attributableto nutritionalconsiderations , in tropical and subtropicalregions.Indica side , adjustments to current and recent immigrationpatterns , and a desire varieties predominatein Arkansas , Texas for more variety in the diet , may continue potential environmentalregula - and other southernrice - producingstates . - but probably not at the same rate . Many tions affectingthe use of land and Californiamostly growsjaponica , a tem - other foods have nutritionalbenefits simi - be of greatest im - waterare likely to perate - zone family of mainly medium and lar to those recentlyidentifiedwith rice portance to Californiaproducers . short - grainvarieties usually grown in Ja - ( forexample , its abilityto reduce choles - pan , Korea , northern China , Taiwan and , terol ) and the influence of immigration Europe . on a smaller scale , in Australia and Californiaâ??s rice industryneeds to main - may slackenas recent amvals adopt US . tain and expandboth its domesticand for - Rice consumersin the U.S . and else - eatinghabits . Nevertheless , even a modest where show only limitedpreferencefor eign markets . The substantialincreasesin per - capita increase , combinedwith a pro - in na - one class of rice over the other . But , per - capita consumption of rice within the jected 10 % increasein population , could United Statesduring the tions where rice is a staple , the 1980scontinue two classes substantiallyincreasetotal domesticde - can be seen as almost distinctly separate upward , but possibly at a slowerrate , and mand for rice . this expand - Californiacan expect to share commodities . ( Consumersare loyal to one Because domesticconsumers exhibit class and very large price differencesare ing domesticmarket with SouthernU.S . only limited preferencebetween japonica rice - producingstates.Internationaltrade typicallyaccountsfor only 3 to 4 % of the worldâ??s total rice production as almost all rice is consumed within the countrywhere it is grown.In the US . , however , about half of the rice productionis exported.The . Carry - in 20 % of total world U.S . accountsfor about Processed milled Seeds trade in rice , ranking onlybehind Thai - stocks land which has about 40 % of the total . 1.4 Less than one - third of Californiaâ??s rice productionis sold abroad , but its future , abroadholds promisebecause Californiaâ??s L Rough rice is the type ( japonica ) demanded by Milled rice Total milled Rough rice production â?? rice supply nations such asJapanand Korea . How - rice supply . mill supply 34.1 30.8 ever , that promiseis conditionedby the Exports degreeto whichJapanand Korea can be Milled encouraged to reduce the extremequanti - r I - 1 . imp1orts tativerestrictionscurrentlyimposed on importedrice . Carry - in Carry - out commercial In additionto seekingmarkets , Califor - milled stocks stocks By - product stocks to air nia rice growersface issues related q - 7 1.2 and water quality , sharingmultiple - use I = for year beginning August 1,1988 . Figures 1 . . 4 Residual At left Harvesters reap Sutter County rice . Source : Economic Research Service , USDA . Californiaâ??s industry faces a growing mar - ket here and abroad : American per - capita rice consumption has increased approxi - mately 100 % since 1970 . In addition , Cali - Fig . 1 . Market channels for California rice with estimated flows for 1988 - 1989 , a normal forniaâ??s japonica rice is the type demanded year that reflects operation of federal price support programs . Units are million - cwt . , by nations such as Japan and Korea . rough basis , except where indicated as milled basis . CALIFORNIA AGRICULTURE , MAYJUNE 1993 5 8,000 1 Rlceyield trend in California , and indicavarieties , costsrelated to trans - sists of lower - valuedbroken grainsrather portation and processing take on added than whole - grain ( " head ) rice ( fig . 1 ) . importancefor Californiaproducerswho Demand for rice internationallyis lim - must competewith counterpartsin the Ar - ited because most major rice - consuming kansas / Texas region for the domestic nations are self sufficient.Unlesstheir do - market . These costslargely limit the com - mesticagriculturaland trade policies petitivenessof Californiarice for table use change , there is littlepotentialfor in - to areaswest of the Rocky mountains.This of rice , especiallyfor creased U.S . exports is offset , partly , by the disproportionately japonicavarieties.In the largestpotential 5,500 w large use of Californiarice in , breakfastce - rice importmarket , Japan , growershave 5,000 I 70 72 74 76 78 80 82 04 86 88 90 reals and other processed foods , and in the so far successfullyfended off effortsto re - Year brewingindustry.California's share of rice lax prohibitiveimport restrictions . Source : CaliforniaField Crop Statlstlcs , varlousyears . sold in the United Statesfor processed Supply considerations foodsand brewingis almost 40 % , about Fig . 2 . Yields of semi - dwarf japonica rice doublethe state's share of production . Rice acreagein Californiahas fluctu - varieties grown in California have in - However , thismarket is lessdesirablebe - ated from 600,000 acresin the early 1980s 6,000 pounds per creased from less than cause the amountused forbrewing varies - an unusual circumstanceresultingfrom 8,000 pounds in acre In 1970 to more than greatlyfromyear to year and much of the purchasesby SouthKorea - to less than 1991 . rice forbothbrewing and processing con - 320,000 acresin 1991 , a droughtyear . Since 1985 , acreagehas been determinedlargely by acreagerestrictionsimposedunder fed - eralpricesupport programs . Rice yields , on the other hand , have in - creased sharplysince 1980due , largely , to introduction of semi - dwarf varieties.d Yieldsin California , which average 80 cwt / acre in 1991 , havebeen a primary source of California's competitive strength.California's high yieldsresult froma combination of favorableclimate , tailored varieties and intensivefarming . Whetherthisadvantageis maintained will depend on how well farmersadapt to limitationson water suppliesand increas - ing regulationsrelated to airand water pollution , fish and wildlife , and other environmental concerns ( table1and fig - 2 ) . ure Today , California's costs for milling , storingand transportationare somewhat higherthan in the rest of the United States . Much of the differencerelates to post - harvest storingand processingdue , partly , to lower yields of wholegrain ( " head " ) milled rice fromunprocessed ( paddy ) rice . These costs are compoundedby higher transportation costs incurredby California producers , compared with those from Ar - kansas or Texas , in shippingto eastern population centers.California's location on the Pacific Rim , however , givesit a dis - tinctadvantagein East Asia's largepoten - tial markets ( table2 ) . Rice and natural resources Because of itsuniqueneed for soil with high water - holdingcapacity , rice provides economic value to acreage with littleother agriculturaluse . Furthermore , rice fields contributeto the environmentalvalue of large open spacesand provide feedingar - eas for enormousnumbers of waterfowl . On the other hand , rice cultivationprac - tices can degradeairand water quality , and rice irrigationcompetesfor a scarce water supply.Attemptsto achievecom - promisesolutionsto these complex re - CALIFORNIA AGRICULTURE , VOLUME47 , NUMBER 3 6 source issues willstronglyinfluencethe tail in the AIC publication , is that rice future of California's rice industry . grower managementhas reduced pesti - Air quality . The burning of approxi - cide dischargessomuch that all currentes , mately3 tons of rice strawfor everyacre water quality objectives - for herbicid of rice harvested contributesto atmo - at least - eventuallywill be met . But this sphericpollution , an issuethat has created will not end water qualityproblems . Fu - increasingpublic concernsincethe 1950s . ture program dealingwith release of nu - Recent legislation ( AB1378,1991 ) trientsand other constituentsof rice field launched a " phase down " program ; burn - drainageinto surroundingrivers and ing will be reduced by 10 % annuallyuntil streamsmay be required . New types of ir - 1998 . After that , a maximum of 25 % of the rigationsystems , referred to above , that reduce or eliminatedrainage by recycling planted acreage ( or 125,000acres , which - ever is less ) could be burned - but only rice - irrigationwater on the farmmay help under specialpermits . solvemany of theseproblems . A centralquestionfor the industry , Government's role therefore , is : What are the alternativesto burning , and how will they affect the com - Marketsfor rice areuniversallyinflu - petitivenessof Californiarice ? An eco - encedby governmentpolicies on com - nomicallyviable alternativefor disposing modity price and incomesupports , con - of all or most rice strawin Californiais sumer subsidies , and trade subsidiesand badly needed . Alternatives - none fullyen - restrictions.It is virtuallyimpossibleto satisfactoryand all probablymore exp predict what will occur if widespread calls sivethanburning - include : ( 1 ) rotating . for reducing governmentalinfluenceare crops , which reducesthe likelihood of heeded . As suggestedearlier , of greatest crop damageand incomelossdue to dis - po - importanceto Californiarice growersis ease carried in the rice stubble , ( 2 ) incor the possiblemajor modification of U.S . rating the residue into the soil , and ( 3 ) policiesand an accompanyingrelaxation haulingit out of the field . ( Somehave sug - of Japaneseand other nations ' import re - al gested rice strawbe put to nonagricultural strictionsresultingfromthe multi - later use , for exampleas biomass fuel ; however , trade negotiationsnow being conducted hauling expensemakes the latter prohibi - under the GeneralAgreementon Tariffs tive . ) Analyses of the benefitsand costsas - and Trade . sociatedwith each alternativeare pre - Because Japan's consumptionis so sentedin the AgriculturalIssuesCenter large ( morethan 7 times that of the U.S . on publication . a per - capitabasis ) , even a modestrelax - Water quantity and quality . Histori - ation of import restrictionsthere could sig - cally , virtuallyall rice was irrigated with nificantlyincreaseCalifornia's exports.For surfacewater fromthe SacramentoRiver example , California's recent yearly pro - and was oftenreused severaltimes.Dur - duction of rice would satisfyonlyabout ing the current drought - and perhaps in - 10 % of Japan's annualconsumption.This creasinglyin the future - pumped would be reasonablycertain in the short groundwater , althoughmuch more costly , runbecause of California's capacityto pro - has been used to supplementsurfacesup - duce the type of rice theJapaneseprefer . It plies . The minimum amount of water re - is possible , however , that the attractionof quired to grow a crop of rice - that usedn - a hugeJapanesemarket and favorable by the cropthrough evapotranspiratio prices ( favorableat least for japonica com - is about 42 inches , which is not much pared with indicavarieties ) could increase greater than that required for other long - efforts of other nations to developa ja - growing season field crops , such as alfalfa . ponica varietysuited to their growingcon - Water depth in a young rice field is con - However , unavoidablelossesdue to per - ditions.Or , it may be that , given freeac - trolled by rice boxes ( weirs ) with the goal of colationand tailwateroutflowsadd to this cess to world marketsand a substantial establishing a vigorous , weed - free crop amount so that the amount of water di - pricedifferentialbetween indica and ja - stand . 50 to asmuch as 100 verted variesfrom ponica varieties , Japaneseconsumersre inchesper acre ( 4.2and 8.4 acre - feet ) . pAsen - might become less averseto the mo ing and marketingexpensesmust con - water becomes scarceand / or more ex plentifulindica rice . Furthermore , as in - tinue to receivehigh prioritywithin the ein - sive , soilswith high percolationrates may comes rise , it seemscertain that some of dustry and in the research activities of th well be shifted to other crops.In addition , the world's most important rice consum - University of Californiaand other agen - adoption of new irrigationsystemswill re - ers cies.Accomplishingthistask may followtheJapanesetrend of re - will be sdiffi - o duce water lossesat the lower end of the ducingper - capita consumptionof rice to cult under any circumstance , but doing field.These systemshave importantimpli - while addressingenvironmentalconcerns achievegreatervarietyin their diets . cationsfor the quality of both water and In any event , it seemscertain that , even will test the ingenuity of the best of soil . California's rice producers and their asso - if freertradebecomes a reality , competi - For the past 10years , California'srice ciatesin tion within domesticand international the rice industry . industryhas been the focus of an intensive willbe an ongoingissuefor markets regulatoryand educationalprogram to re - E . W . Learn is Professor Emeritus , Depart - California'srice industry.Maintaining duce water pollutioncaused by pesticides . ment of Agricultural Economics , and Execu - California'sreputationfor high quality The principalconclusion , described in de - tive Vice ChancellorEmeritus , UC Davis . rice while reducingproduction , process - CALIFORNIA AGRICULTURE , MAY - JUNE 1993 7