A new set of warehouse and silo funded through a government-led loan scheme was inaugurated Friday in Kampong Speu province.
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Khmer Food Group has built a warehouse with a maximum capacity of 50,000 tonnes, as well as a silo that can process up to 1,500 tonnes of rice per day, according to a representative of the Rural Development Bank, the institution in charge of disbursing the loans that have financed the storage facilities.
Together, the warehouse and silo have cost $5 million. They are part of a government lending scheme that makes low-interest loans, known as ‘emergency loans’, available to agricultural firms that want to build rice storage facilities. The initiative aims to boost their storage capacity during harvest season as well as bolster paddy prices for farmers.
Kao Thach, director-general of RDB, said during the launch of the new rice storage facilities that they will play a vital role in supporting the price of rice and helping farmers find buyers for their products.
He said since the government introduced the lending mechanism, the price of rice has risen considerably, and now stands at 1,150-1,200 riel per kilogram. He added that now the government is also considering subsidising production costs for farmers.
“The government will bear approximately a third of the cost of seeds. This means if seeds cost 3,000 riel per kilogram, the government will shoulder 1,000 riel, and farmers will only have to pay 2,000 riel,” he added.
Similar rice storage facilities were recently launched in Battambang and Kampong Thom provinces.
In 2016, the government launched its first one-year emergency loan offer through the RDB to help the rice sector. The emergency fund for the year 2016-2017 consisted of $27 million, but for the period 2017-2018, it was increased to $50 million.
The government later announced that an extra $30 million in loans will be made available for building silos and warehouses.