ITALIAN POSITION ON ARTICLE 28

UNCLAS ROME 001885 SIPDIS USEU BRUSSELS FOR AGRICULTURE USDA FOR FAS/IT/EAMED AND FAS/CMP/GFD STATE PASS USTR FOR BERNSTEIN AND PORTER NOT FOR INTERNET DISTRIBUTION E.O. 12958: N/A TAGS: EAGR IT AU FAO SUBJECT: ITALIAN POSITION ON ARTICLE 28 NEGOTIATIONS TO MODIFY RICE IMPORT REGIME REF A: ROME O0839 REF B: STATE LO8223 ¶1. CONSISTENT WITH OUR INITIAL REPORTING IN REFTEL A, THE GOI HAS NOT CHANGED ITS POSITION REGARDING ARTICLE XXVIII NEGOTIATIONS. THEY WOULD LIKE TO OPEN THE NEGOTIATIONS TO TAKE A NEW LOOK AT RICE IMPORTS. ¶2. ACCORDING TO OUR CONTACT IN THE MINISTRY OF AGRICULTURE, THE BLOCKING MINORITY HAS NOT, TO HIS KNOWLEDGE, CHANGED ITS POSITION AND THUS THE OPENING OF ARTICLE XXVIII IS NOT LIKELY. UNCLASSIFIED UNCLASSIFIED SIPDIS ¶3. THE COMMISSION PROPOSAL TO REVISE CAP SUPPORT FOR THE RICE SECTOR IS LOWER THAN THE CURRENT LEVEL OF SUPPORT TO PRODUCERS, AND HENCE, NOT DESIRED BY ITALIAN AGRICULTURAL INTERESTS. THE REDUCED INTERVENTION PRICE, IN GOI TERMS, IS NOT ACCEPTABLE. WHILE THE GOI AGREES, IN PRINCIPLE, TO REDUCE THE INTERVENTION PRICE FOR RICE, THEY BELIEVE THAT THE LEVEL SHOULD GO TO EUROS 150 PER TON FOR PADDY RICE. ¶4. ITALY, THE LARGEST RICE PRODUCER IN THE EU, HAS SLIGHTLY SHIFTED RICE PRODUCTION BY ABOUT 5 PERCENT FROM INDICA VARIETIES TO MORE TRADITIONAL JAPONICA VARIETIES DUE TO IMPORT PRESSURE. FOR 2003 OVERALL RICE PRODUCTION AREA IS UNCHANGED. ANNUAL AGGREGATE PRODUCTION, MILLED BASIS, IN THE PAST THREE YEARS HAS AVERAGED 850,000 TONS. SEMBLER NNNN 2003ROME01885 - Classification: UNCLASSIFIED