NOTE: Rabobank is a Dutch bank rooted in agriculture and with offices worldwide.

EXTRACTS: According to the [Rabobank] report, rice acreage in the US in 2007-08 is likely to decline even further due to concerns over the effects of GM contamination, high prices for alternative crops and the banning of a number of GM contaminated rice.

Until the discovery of the GM variety LL 601, the EU had purchased about 250,000 tonnes (milled-equivalent basis) of rice annually from the US. While sales of milled rice to other markets may increase, these sales will not cover the gap left by the loss of a major share of the EU market, the report said.

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Genetically modified rice sales facing resistance
Dilip Kumar Jha / Mumbai Business Standard, May 11 2007 http://www.business-standard.com/smartinvestor/storypage.php?leftnm=lmnu6&subLeft=11&autono=284091&tab=r

Continued resistance over sales of genetically modified (GM) rice in the US and its non-acceptance in the European Union (EU) have threatened the success of the transgenic hybrid seeds in the agriculture sector, according to a Rabobank report published on Thursday.

India, the world's second largest rice producer after China with a capacity of 91 million tonnes (MT) is also facing resistance over the use of GM seeds. The US rice sector has a 12 per cent share in international trade, with about 1.5 per cent of share in world production. The US sector is threatened by many challenges such as high fuel and fertiliser costs, limited increases in farm prices and intensifying international competition, particularly from low-cost Asian exporters.

This has also impacted the overall rice acreage in 2006-07 as it fell 16 per cent to 2.8 million acres, the lowest level since 1996-97.

In 2006-07 marketing year (MY), US rice production is estimated to fall by 13 per cent to 194 million hundredweight (cwt, 1 ton = 20 cwt) , with long-grain production down about 18 per cent to 146 million cwt, and medium- and short-grain production up by 4 per cent to 48 million cwt. These levels are similar to 2003-04 levels, when a smaller crop lifted prices, subsequently pushing production to record levels. According to the report, rice acreage in the US in 2007-08 is likely to decline even further due to concerns over the effects of GM contamination, high prices for alternative crops and the banning of a number of GM contaminated rice.

This may tempt farmers to grow alternative crops wherever possible. Burdened with strict regulations, the EU has banned imports of US rice. Until the discovery of the GM variety LL 601, the EU had purchased about 250,000 tonnes (milled-equivalent basis) of rice annually from the US. While sales of milled rice to other markets may increase, these sales will not cover the gap left by the loss of a major share of the EU market, the report said. The Supreme Court of India recently passed an order allowing the Centre to conduct trial runs of genetically modified seeds with certain restrictions.

According to an expert, about 50 per cent of children below five years of age and their mothers are malnourished in India. So the promotion of GM seeds would fit the bill in India, he said.