Arkansas Rice Growers, Congressional Officials Question Iraqi Contract

The country of Iraq recently bought more expensive rice from Brazil and Uruguay despite efforts from U.S. growers. Now, Arkansas farmers and lawmakers are voicing their dissatisfaction.

In a letter dated November 18, 2014 to Secretary of State John Kerry, U.S. Senator John Boozman, R-Arkansas, and Congressman Rick Crawford, R-Jonesboro, expressed their concerns that American rice producers were being left out and that a level playing field may not exist for Iraqi rice tenders.

“We write in reference to a recent decision by the Iraqi Grain Board (IGB) to decline a competitive bid from U.S. rice for an Iraqi rice tender,” the Congressional letter states. “Results reported from the rice tender indicate that several winning bids were awarded to other countries with considerably higher price points than the U.S., most notably Brazil and Uruguay. Not only is this latest outcome inexplicable, it raises serious questions about the legitimacy an integrity of the Iraqi rice tender bidding process.”

In early November, the Iraqi Grain Board (IGB) paid a reported $1.4 million more to buy 170,000 tons of rice from Brazil and Uruguay and declined to accept a bid of a lower amount from U.S. rice farmers.

“Given the considerable investment of resources by the American taxpayer in Iraq, it is critical that the United States be on ‘equal footing’ with its foreign competitors when it comes to the ability to win bids issued by the IGB,” Boozman’s and Crawford’s letter said. “Simply deciding to pick winners and losers in bids for Iraqi rice tenders based on arbitrary reasons is not only unfair, it deprives rice farmers in Arkansas – a leader in rice production – and across America of a vital trading partnership with Iraq.”

Arkansas stands to benefit considerably from these types of international bid contracts. Within the last decade, Iraq was the No. 2 export destination for Arkansas rice.

The Natural State ranks first among the six major rice-producing states and accounts for approximately 48% of U.S. rice production. Annually, Arkansas grows rice on approximately 1.3 million acres. It is the state’s top agricultural export and accounts for nearly 25,000 jobs in Arkansas, according to the Arkansas Rice Federation.

“Arkansas rice farmers are concerned that they’ve been shut out of Iraq rice tenders despite competitive U.S. bids,” said Ben Noble, executive director for the Arkansas Rice Federation.

He notes that Iraqi trade officials are very familiar with Arkansas rice and the region’s production capabilities. This summer, the USA Rice Federation, in an effort to improve access to the Iraq market, hosted three high-ranking representatives from the IGB, a division of the Ministry of Trade.

The group toured Delta rice farm, mill and port locations in an effort to work through issues such as packaging of bulk rice, quality control and definitions of kernel length.

“Iraq has traditionally been a good market for U.S. rice, but it was disrupted during the wars, and then started to come back slowly in 2005,” said Jim Guinn, vice president of international promotion for USA Rice earlier this year. “In 2006, Iraq was our number two export market at more than 380,000 MT, but then we dropped to zero in 2012 because of a variety of technical issues.”

A rice industry newsletter from the summer highlighted positive comments from the Iraqi officials who toured Arkansas.

“We saw very good technical production facilities, a very clean bulk loading facility, and a mill laboratory with very good procedures,” said Hasan Ibrahim, the Director General of the Grain Board of Iraq and head of the delegation. “I think this visit is very important for the Grain Board of Iraq to open the market widely to American rice.”

“Rice is a principle food for the Iraqi people and they always ask for American origin,” said Import Manager Nuha Al-Musawi, who also traveled with the group. “We hope we can resolve the technical issues and import American rice at the levels we had in the past.”

Noble said he feels the technical concerns have been addressed and that a political solution – with the Congressional letter being a good start – is the next step in the process.

“We successfully worked through technical issues, and are now working on the political problem,” he said. “We’ve worked with allies in Congress to put pressure on both the Obama Administration and the Iraq Ministry of Trade to make certain U.S. rice farmers are fairly considered.”