Brazil Wants Higher Tariff to Bar Foreign Rice from Mercosur

Brazilian rice Rice planters from the Mercosur will be meeting to decide a Brazilian proposal to increase the common external tariff thus preventing the introduction of rice from third countries, precisely this year when Brazil’s crop is expected to be below average.

Rice planters from Argentina, Brazil, Paraguay and Uruguay have agreed to meet in a Uruguayan-Brazilian border town to discuss the proposal. According to Hernán Zorrilla deputy head of the Uruguayan Association of Rice Planters, ACA, Uruguay will be taking a larger proposal than the mere increase of the common external tariff.

The Brazilian proposal was presented by the Rio Grande do Sul Rice Planters, Fedearroz, following contacts with their counterparts in Argentina and Uruguay. The purpose is to protect the Brazilian market, but which should also benefit the rest of Mercosur members that usually sell their surplus production to Brazil. Rio Grande do Sul is Brazil’s main rice production state.

“Raising tariffs for rice from third countries had been, years ago, an objective of ACA, but at the time when Uruguay made the proposal Brazil would stop our trucks at border checkpoints while they imported (cheaper) rice from the United States and other countries through the port of Santos,” said Zorrilla. Uruguayan producers believe not much can be achieved by increasing Mercosur common external tariff, and are proposing a package of measures and “these are the ones we are precisely considering before the meeting”.

But implementing the Brazilian proposal not only involves the wishes of rice farmers but the good will of the four governments. Zorrilla recalled that not so long ago when Uruguay proposed the same measure “it was the Brazilian government that killed the idea”.

This is an electoral year in Brazil (next October the successor of President Lula da Silva will be elected) and Rio Grande do Sul is a crucial state. According to Porto Alegre’s press, Fedearroz rice farmers are taking advantage of this “political vulnerability” to press for a long awaited and lobbied goal.

Fedearroz and Rio Grande do Sul officials have in the past been successful in detaining (alleging “customs or sanitary” reasons) Uruguayan and Argentine trucks loaded with rice for São Paulo and northern states’ markets. Brazil’s rice farm yields and costs are lower and higher than their counterparts from Uruguay and Argentina. Uruguay has a long established production of high quality rice which competes with some of the world’s top brands.

Mercopress

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