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CALIFORNIA SOFT SELLS ITS RICE IN JAPAN GROUP GOES AGAINST GRAIN TO AVOID CONTROVERSY

By Published on .

TOKYO-The state of California believes it is doing a good job of promoting its rice in Japan even though consumers aren't allowed to eat imported rice in its pure form and government controls cancel out the American price advantage.

Jonathan Kaji, director of the California Office of Trade & Investment here admits he's taking a "low-key approach" to marketing California rice in Japan, by necessity staying away from paid advertising. Instead, the group has chosen to rely on news stories about California rice and answer telephone queries from consumers as its major means of introducing California rice to the country.

"We know [rice] is a sensitive issue in the agricultural community and among right-wing elements in Japanese society. So, we're not here to throw gasoline on the fire and to be provocative," said Mr. Kaji.

In the past, angry farmers held demonstrations against U.S. rice that they believed threatened their livelihood and many Japanese even now view foreign rice as an assault on their culture.

Faced with a rice crop failure at home, Japan agreed to open its rice market for the first time last December under the guidance of Prime Minister Morihiro Hosokawa. In a deal reached at the Uruguay Round of the General Agreement on Tariffs & Trade, imports amounting to 4% of the country's consumption of an estimated 6.63 million tons this year were permitted-leaving California rice to compete with Thailand, Australia and Taiwan for a share of the pie. Starting in 1995, the amount of allotted imports will increase, gradually reaching 8% by the year 2000 when rice imports will be renegotiated.

Japan's poor harvest last summer forced the government to order 1.7 million tons of foreign rice this year, setting the sale price at the level of domestic rice-five to eight times higher than American rice depending on the grade. This was a big break for California since of the 400,000 tons, or $100 million, allotted for U.S. imports almost all of it is coming from that state.

Mr. Kaji said California has no need to advertise its rice here, because of the larger than expected order and the publicity from the Japanese media over rice quotas. When California rice went on sale last February at the same price as local rice, for example, the entire year's allotment sold out within one hour, Mr. Kaji said.

"We're not hyping California rice but the media is doing a good job for us."

Instead, California's promotional campaign is aimed at six years from now when the market opens wider, Mr. Kaji said, and later when the market opens fully. While an agency search hasn't been set, he promises California will be ready when the time comes.

Mr. Kaji said he believes consumers who are growing price-conscious after the bubble economy collapsed will press for imports and the bureaucracy will gradually give in.

For now, however, The Food Agency, the government agency that sets rice quotas, decided all imported rice must be blended with domestic and other foreign brands, not sold separately.

Mr. Kaji said the California group will also begin rice tastings in May among officials of Japanese food companies. The Japanese government itself has held rice tastings including one sponsored by prominent Japanese newspaper Nihon Keizai Shimbun. But Mr. Kaji said California plans blind taste tests while those conducted by the Japanese government label the rice according to origin.

He also answers nervous queries from Japanese consumers asking about pesticides, required in higher amounts when exporting to eliminate the shipments of unwelcome pests. Consumers recognize the group's name from newspaper articles.

California rice's low-key strat- egy is in keeping with other rice competitors, particularly Australia and Taiwan. Thai rice, considered too long in grain and bad-smelling by Japanese standards, is more active on the promotion front, sponsoring tastings but also recipes and cooking classes aimed at convincing the Japanese to make Thai dishes with the rice. But unfazed by the difficulties, Mr. Kaji said California rice is now accepted by the Japanese.

If California rice, Japonica, matches Japan's taste closely, it's because the seeds were carried to California some 80 to 100 years ago by Japanese immigrants.

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