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44 CHAPTER 3


subjected to government support in both developed and developing coun- tries. Among developing-country exporters, Thailand has a loan program that provided a 10 percent support price in 2002. India, the second-largest producer and consumer of rice in the world, has a large government procure- ment and distribution system, as well as price supports and export subsidies. Vietnam has a largely market-driven rice sector, although state enterprises play an important role in processing and exporting rice. China has a govern- ment procurement system that strongly supported the price of rice in the 1990s. After accumulating large stocks in the late 1990s, China has reduced the level of its support and disposed of its stocks. The SCT for rice in OECD countries has come down only marginally, from 80 percent in 1986–88 to 70 percent in 2004–06 (OECD 2007).


Rice is one of the most protected agricultural commodities at the border, with average global AVE and MFN rates of 53 and 76 percent, respectively. Most of the major rice importers use various measures to limit rice imports. Indo- nesia, the largest rice importer, uses a state trading enterprise, Badan Urusan Logistik, to support the domestic price, assisted by import tariffs of around 17 percent. To comply with the URAA, Japan and the Republic of Korea no longer ban the importation of rice, but they maintain with Taiwan AVEs of 450, 436, and 391 percent, respectively. The E.U. recently switched from a variable levy to an import tariff, resulting in an AVE of 90 percent on average.


Sugar


The market for sugar is also one of the most distorted in the world. The aver- age level of protection for sugar is over 50 percent, the second-highest level after rice.


Brazil is by far the largest sugar exporter, supplying 20 percent of world exports. Russia and the United States are the main importers. The EU25 con- tributes 27 percent of world export but is a net importer. Among the MENA countries, Algeria, Egypt, and Morocco are the largest importers, and the region as a whole accounts for 10 percent of world imports. The OECD countries provide transfers to sugar farmers amounting to 45 percent of the commodity gross farm receipts in 2004–06, only 5 percent less than in 1986–88 (OECD 2007). Much of this support was provided by the E.U., Japan, and the United States.


The annual support for sugar producers (largely sugar beet growers) in the E.U. was estimated at US$2.4 billion in 2002. The E.U. also subsidized sugar exports, and the AVE tariff averaged 92 percent in 2004 (see Table 2.8). In 2006 the E.U. reformed its sugar policy, reducing the difference between the in-quota tariffs and the out-of-quota tariffs, a policy that is expected to reduce the preferences of preferential exporters (the African, Caribbean, and


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