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Rice Sector Crying Out

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PHNOM PENH: March 10, 2014 (Khmer Times) – How does a country in which 9.34 million tons of rice paddy is harvested producing a surplus of 3.5 million tons need to import 40% of the rice to meet the Cambodian peoples’ needs—about 200,000 tons. 
“No one in Cambodia really knows why the price of their rice has risen 50 per cent in six months, and tripled over the last two years … Farmers sell their rice straight from their paddy fields to middlemen who then sell to Thailand and Vietnam. 
There’s value-added there for almost none of the nine million Cambodians engaged in rice production. “The storage of it, the milling and polishing, the adding of value, all happens abroad. The drainage of potential money from Cambodia is huge – because the finished rice is then imported back again, at three, four times the price.” 
Poor roads and railways and the lack of warehouses, handling equipment and, of course, milling capacity all narrow farmers’ choices to market. The price to transport one ton of rice on 100 km of road is $15 in Cambodia while it’s $4 in Thailand and $7.50 in Vietnam. 
Cambodia Centre for Study and Development in Agriculture President Yang Saing Koma remarks that, “despite all the investment put into the country by the World Bank and other international institutions, no one thought to build up the rice-processing industry or even increase storage capacity.
As the prices soar and tumble on the commodities markets in Chicago and London, someone’s getting rich out of Cambodian rice, but it’s not Cambodia.”.
The paddy rice yield is lower here than in neighboring countries at 2.6 tons per hectare. Thailand is 2.8, Laos is 3.5 and Vietnam produces 4.9 tons per hectare. 
Cambodia usually plants only one wet season crop while Vietnam has 3.5 on average annual harvests (in the Mekong Delta). High energy prices and poor transportation infrastructure put Cambodia at a disadvantage. 
No proper handling equipment at the Sihanoukville Port also constrains the export of milled rice in volume. Mekong plain farmers must buy expensive gas to pump water into irrigation canals. 
Residents in the countryside actually pay a higher electricity rate, 30-90 cents per kilowatt hour (kWh), than those living in town, who pay 20 cents. Farmers in Vietnam pay about 10 cents per kWh. 
Finally, credit for buying and processing paddy has been relatively measly and expensive. Paltry investment in domestic value-added facilities hinders milled rice export and doesn’t provide opportunities to stockpile paddy rice (un-milled, ‘rough rice’). 
All these factors taken together increase farmer’s costs and narrow his market choices and into the waiting arms of middlemen close to home seeking higher returns in neighboring countries. Growers are cut off from any value-added.  
So many rice growers here must cultivate their crops using the old ways, using what they have, sometimes, only a water buffalo to plow. 
More mechanization is becoming evident now, and contractors with tractors, threshers or combines are springing up to help. Also, the price of chemical fertilizer (mostly made from petroleum) has recently more than doubled. 
Cedac and Oxfam are working on exploiting the fact that, while Cambodia’s rice farming has been ‘primitive’, it is also largely organic and chemical free, a great opportunity for Cambodian agriculture to market organic produce at a premium domestically, regionally and farther abroad.
Help is on the Way
At last there’s hope for change. The prime minister himself is putting his weight behind expanded investment in the rice sector. “Practically, the agricultural sector is not only to ensure food security, but also to contribute to the socio-economic development of the nation,” he said.
“Moreover, we have also to pay attention to the building of supporting infrastructure, including irrigation networks and rural infrastructure, land ownership allocation, increased access to new technology and agriculture intensification services and market information. 
He continued that Cambodia will put more effort into developing physical infrastructure and continue to restore the support foundation to expand agriculture potential and that the growth in the agricultural sector is not only improving our economy but also transforming the red dry land to become a green area in all seasons.”
The country must produce more than 10 to 11 million tons of paddy to export 3 to 4 million tons of milled rice each year, states the Rice Policy. In 2012, there was a more than a 4.7 million surplus of paddy. 
Official Ministry of Commerce figures showed exports of 200,000 tons of milled rice, 10% percent of full capacity. US$350 million in investment is needed in the next four years to each the government’s goal of exporting one million tons a year by 2015.
“This is a problem,” he said. “We need a lot of money.” Said Yang Saing Koma. With its 3.5 million ton paddy surplus, Cambodia could soon be one of the top five milled rice exporters in the world, said Mr. Yang Saing Koma – President of the Cambodian Center for Study and Development in Agriculture.

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