Kenya to Export Rice to Japan in 2011

By Mwarang'ethe

It is year 2011. Kenya has had a bumper rice harvest due to the generous assistance of our dear friends from Japan, the land of the rising sun (remember rice comments in the article “Industrializing a Nation is an art of War”). Since our friends are believers in the free trade, we will encourage our rice farmers to export our surplus rice to Japan since they had a bad harvest last year. After all, don’t they freely export Toyota Land Cruisers cars for our police? With that in mind, let us examine the facts and see how they would treat our rice.

In 1993 - 94, the Japanese government had a problem in its hands. In the summer of 1993, because of poor weather, Japan experienced poor rice harvests. So, in 1994, it had to import rice. However, they also knew that, from 1994 onwards, good harvests will resume. So, the challenge was how to ensure continued iron grip control of its rice market in the future when good harvests resumed. They wanted to ensure that, the imports will not undermine domestic price regulation, and that Japanese consumers will keep buying subsidized, expensive Japanese rice rather than the equally tasty and cheaper (as free trade teaches us) Californian variety once good harvests were back.

Things were a bit complicated because the new rice accord under the General Agreement of Tariffs and Trade (GATT) ruled out reestablishing imports quotas or other barriers. So the ingenious Ministry of Agriculture had to design a more subtle means of maintaining control of the market in the face of a completely confused situation. There are many different kinds of rice, some of which work nicely for steamed rice (such as the short-grained Californian variety) and some of which don't (such as the long-grained Thai rice). For sushi, you need Japanese or Californian rice, while for other dishes, such as Chinese food, Thai or Chinese rice is much better.

This is how they solved this dilemma. Hiding behind a superficial argument of "national equality," the government announced that all Japanese citizens had to bear the same burden of eating foreign rice.

On March 7, 1994, the Ministry issued a directive that no rice could be sold separately, but all rice--domestic-- and imported--had to be mixed, so that the resulting rice does not have a "nationality." The directive prescribed a mix formula of 30% Japanese, 50% Californian, Chinese, and Australian combined, and 20% Thai rice.

Mixing rice has two effects. First, the mixed result is appalling: You simply cannot steam a California/Thai mix, and neither can you prepare it otherwise. Second, based on a rumour campaign it was alleged there were dead rodents and the like in the Thai imports, so, the Japanese clearly dislike the Thai rice. Thus, by combining it with the other imports, the Ministry severely diminished the value of the mixed result.

What may have been the idea behind the "mix directive"? Given the intolerable result, every Japanese in his/her right mind decided to buy the HOME-GROWN, non-mixed produce as soon as it hit the market again. There was no need for import quotas or other non- tariff activities. Japanese consumers happily reverted to buying Japanese rice and pay up to ten times more for it, as long it was available.

And indeed, the first reaction to this policy was a national panic that led to large-scale hoarding of DOMESTIC (unmixed) rice, as well as to a sharp increase in national concern over self-sufficiency, and a pronounced aversion to imported rice. By the end of April, 1994, the mass media had further elevated the national concern. At the same time, there was also a growing public outrage over the Ministry's restricting policies, and the Hata government needed some positive
publicity.

To stay abreast of the development and in control of the situation, the Ministry of Agriculture did not intervene when rice retailers, who are regulated and licensed under the Rice Control Law (which has its roots in the 1930s), set out to reinterpret the "mix directive." While still literally mixed and sold in one bag, rice also began to be sold in "sets" of four smaller packages with rice from different countries, bundled together according to the same formula. To give the consumer a "choice," the old blend as well as a completely "foreign" blend of U.S. (40%), Chinese (40%), and Thai (20%) rice was also offered.

Retailers, knowing the Ministry was under pressure, then moved on to ignore the mix directive altogether. But make no mistake; the Ministry was still in control of the market. Because it had become clear that the citizens sufficiently disliked Thai rice and had not developed a craze for Chinese rice either, foreign rice can now be sold just by itself-- with one exception. The most popular of all imported produce, the sticky California rice, still did not sell in its pure form. It was mixed with rice from other states (which remains unlabeled, but was most likely long-grained) and sold under the name "American." The official reason for this mixing was that there was not enough Californian rice for everyone. Some retailers openly admitted that the rice was mixed in order to lower its quality, so that they could also sell the less popular Chinese and Thai grains.

In addition to this deliberate policy of reducing quality, the "American" mix was subjected to a 580% tariff, which made it exactly as expensive as medium-quality Japanese rice ($7 per kilo), thereby removing all the price advantage. The Japanese government was expected to make a profit of $2.7 billion out of its rice imports. This revenue was to be used to subsidize Japanese rice farmers and improve their irrigation systems (the more water, the less the influence of weather on the harvest). The idea was that as the new GATT "minimum access rule" kicked in 1995, the Japanese farmers would have become price competitive.

In the meantime, Californian rice farmers were bending over backwards to ship highest- quality rice to Japan in the hope of gaining market share. The California short grain is by all measures comparable in quality with Japanese rice; and it is better than all other rice imports to Japan. Unfortunately, Japanese consumers were unable to buy pure Californian rice and appreciate its quality. There is probably no better example of Japanese managed trade (free trade to the foolish). Not surprisingly, the minister under whose auspices the mix plan was designed and implemented was the head of the Ministry of International Trade and Industry in Prime Minister Tsutomu Hata's cabinet).

Look at this genius:

(a) The quality of the foreign product is disguised by a mix directive.

(b) Second, as the panic reaches its peak, the mix directive is "diluted" to avoid domestic and foreign criticism, but prohibitive tariffs ensure that high-quality foreign products don't have a price advantage.

(c) Subsidies help Japanese farmers increase their output.

(d) All of this rests on a strategy of misinformation to the Japanese consumer. Although the Japanese papers cover the story, the rest of the world doesn't hear about it.

So, that’s how your good friends would treat your rice should you think that, you can export your rice to them.

Stuff to ponder about

(a) How do we treat our imported stuff?

(b) Do you see any free trade which we have embraced so much?

(c) If they treat Americans this way, what about Kenyans?

As we noted, industrialising a nation is an art of war, and those who think/believe that, it is just a matter of been “development conscious,” “fighting” corruption and AIDS etc, we say, woe unto you.

More Stuff to ponder about

(a) Bob Marley sung that, “these are the words of my master, no weak heart shall prosper.” Are we weak or strong hearted people?

(b) Dr. Carter G. Woodson, the author of The Mis-Education of the Negro, in 1933, made some great observations:

(i) The Negro of his time was being culturally indoctrinated, rather than being taught, in the American schools. This conditioning, he claimed, caused the African-Americans to become dependent and to seek out inferior places in the greater society of which they were a part.
He challenged his readers to become autodidacts and to "do for themselves", regardless of what they were taught.

(ii) History shows that it does not matter who is in power... those who have not learned to do for themselves and have to depend solely on others never obtain any more rights or privileges in the end than they did in the beginning.

(iii) When you control a man's thinking you do not have to worry about his actions. You do not have to tell him not to stand here or go yonder. He will find his 'proper place' and will stay in it. You do not need to send him to the back door. He will go without being told. In fact, if there is no back door, he will cut one for his special benefit. His education makes it necessary.

Could he have been describing Kenyans/Africans in 2010?