The Cambodia Rice Federation (CRF) has requested the state-run Rural Development Bank of Cambodia (RDB), reserve an additional $30 million to purchase paddy from the Kingdom’s rice farmers during the upcoming harvest seasons.
The CRF and RDB determined during a meeting that another $30 million, on top of the already $50 million reserved for the 2020-2021 harvest season would be required, bringing the total assistance package to $80 million.
Launched in 2016, the government-led fund aims to help rice millers purchase paddy rice from farmers that have been affected from the drop in loan approvals from commercial banks, which coincided with the European Union’s imposition of tariffs on rice exports.
Lun Yeng, secretary-general of CRF said, “Only a small amount of the $50 million in funds allocated last year have been used because it was disbursed at the end of the harvest season. We believe there will be additional loans required this year and this is why the federation has requested the additional $30 million.”
He explained that the already reserved $50 million will be used in the first round of harvest season and the $30 million requested will be used in the second round.
“With this extra amount we will be able to buy around 200,000 tonnes of rice and will help rice millers and agricultural community members of the CRF to purchase paddy from farmers,” he told Khmer Times.
He noted that the first round of harvesting will begin in July, particularly the Sen Kor Ob fragrant rice variety, while the second round of harvesting will start between November and December for the premium fragrant rice varieties such as Phka Rumdoul, Romdeng, Romeat and Somaly.
Kao Tach, director of the RBD, could not be reached for comment yesterday, but has been quoted as saying that he will “take all proposals for consideration and asks the government for a principal approval.”
Cambodia exports approximately 600,000 tonnes of jasmine and fragrant rice aevery year and is the nation’s most important crop, according to the CRF. Grade A fragrant rice fetches $900 to $950 per tonne, with estimates that around three million Cambodians rely on the grain for their livelihood.
Despite the devastating global economic effects of the COVID-19 outbreak, Cambodian milled rice to the European Union saw a 126 percent increase in the first two months of this year, compared to the same period in 2019. With the Chinese market increasing 33 percent over the same period, according to data from the CRF.
Lun said the rise of rice exports to the European Union is due to the reduction of tariffs which have been dropped from $175 to $150 per tonne of rice exported this year, while at the same time Chinese demand has also been rising significantly.
“Although the Novel Coronavirus is hurting China’s economy badly, exports to there are going
well. What we were concerned about was ship availability, but now we have confirmed they are in place to carry our rice to China,” Lun added.