MR. BOHANON: I understand that we're pretty short on time and so I will make this fairly short. I am pleased to be hear today to give you insights on the rice industry views regarding trade and trade policy that is critical to our industry's success. I represent Riceland Foods, Incorporated, headquartered in Stuttgart, Arkansas. Riceland is a farmer owned cooperative serving rice farmers in Arkansas, Mississippi, Missouri, Louisiana and Texas. Riceland markets approximately 25 percent of the national rice crop and about 30 percent of that grown in the South.

Improving trade and trade policy are of utmost importance to the U.S. rice industry to insure that we remain viable. The volume of exports usually is the dominating factor in determining the prices our growers receive for their rice. Although domestic U.S. rice consumption has increased dramatically during the past 15 years, exports continue to be extremely important to our industry. About 40 percent of our national production is exported. Last year the industry exported rice to more than 100 countries. We at Riceland exported rice to more than 50 countries. The rice industry has had success from recent international trade negotiations.

The North American Free Trade Agreement has given our industry access to a market that previously was restricted through state trading. NAFTA has transformed Mexico from state trading of rice to an open market restricted only by moderate tariffs. As a result, Mexico has become the leading export market for U.S. rice during the past three years.

In the Uruguay Round of trade negotiations, Japan agreed to import a share of its domestic consumption from the outside world. This concession has been of substantial benefit to the U.S. rice industry.

We at Riceland support complete removal of agricultural trade sanctions. Probably no U.S. commodity or product has suffered more from U.S. trade sanctions than has rice. Three times we have lost leading exports to markets as a result of the U.S. government imposing sanctions on exports to specific countries, Cuba in 1963, Iraq in 1990 and Iran in 1995. As you are aware, the administration recently eased restrictions on trade to certain countries. The most recent being Iran, Sudan, Libya on April 28. It is interesting when on this announcement we at Riceland received a message from a former customer in Iran asking for price quotes for U.S. rice for export to Iran. Undoubtedly memories of the taste of high quality of U.S. rice still linger in Iran.

Unfortunately, the policy initiated by the Administration on April 28 is not the one we originally anticipated. It appears as if the Administration is intending to put in place a system of export licensing for trade with these three countries.

Riceland sees the Administration's proposal for case-by-case licensing restrictive. Cuba is the other market that the Administration recently eased restrictions on exports of food and medicine. However, we can only export rice to Cuba if we can find a commercial buyer there. Unfortunately, there is no commercial market in Cuba, only state trading which leads me to another objective, the World Trade Organization negotiators, elimination of state trading enterprises.

State trading enterprises maintain controls on rice imports and constricts the private trade from participating in rice importation. This prevents U.S. exporters from having direct access to viable markets. This distorts trade and puts U.S. rice exporters at a serious disadvantage in several key markets.

The elimination of preferential tariffs is also important to the U.S. rice industry. Most notably, Uruguay and Argentina's duty-free access to Brazil's rice market while U.S. exports are subject to applied tariffs. Uruguayan suppliers also enjoy duty-free access to the Mexican rice market. Due to a preferential bilateral agreement negotiated between Uruguay and Mexico, the NAFTA partners which Uruguay is not a part of, are still at a is advantage in the Mexican rice market. Similar unfair trading practices are prevalent throughout the Central and South American rice markets.

Another important issue that we see in the future is biotechnology as it pertains to rice. Riceland supports biotechnology but realizes work needs to be done for GMO products to gain market acceptance.

Riceland sees WTO negotiations with the European Union as critical to prevent genetically modified rice from being restricted from this market as other GMO crops have been.

Finally, I would like to mention that Riceland supports agriculture being included in comprehensive WTO negotiations. Under no circumstances do we see benefits from agriculture being separated out during negotiations. Thank you.