The government has injected another $23 million through the Rural Development Bank (RDB) to provide loans to rice mills and exporters who lack working capital to buy rice from farmers in the up-coming harvest season and stabilise the rice price.
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RDB’s CEO Kao Thach said yesterday that mills and exporters who meet the criteria may apply for the loans without discrimination.
“We hope that the total of $50 million of government emergency loans would stabilise the rice price during the harvest season because most rice mills and rice exporters still have working capital to purchase rice from farmers in this new harvest season,” Mr Thach said.
He said that the rice harvest season starts in September, so the new loan would help to stabilise prices.
The government has also approved another $15 million to RDB to work with private partners to build silos and warehouses in Kampong Thom, Prey Veng and Takeo provinces, Mr Thach said.
“Besides the western provinces such Battambang, Banteay Meanchey, Pailin and Pursat, the government found that Kampong Thom, Prey Veng and Takeo provinces also have the potential to produce rice, so we have to build warehouses and silos in that area,” Mr Thach said.
“As planned, we want the capacity of the warehouses to store from 50,000 tonnes to 100,000 tonnes and silos to dry from 1,500 tonnes, but sizes would be changed according to the price and infrastructure of the silo and warehouse.”
He added that the government had approved $30 million to build warehouses and silos for the rice sector.
In April, the government conducted a $15 million bidding contract to build a 3,000-tonne silo facility and 200,000-tonne rice warehouse. Cambodia Rice Bank won the contract for the facilities in Battambang.
The silo is expected to be finished by the end of the year and the warehouse will be fully operational for the 2018 harvest season.
Phou Puy, CEO of the Cambodia Rice Bank, said that once the facility is ready, it will help stabilise prices during the harvest season and will benefit farmers in Battambang, Banteay Meanchey, Pursat and Siem Reap provinces.
“We spent about $5 million on machines and other facilities for silos and all of these facilities will be installed in July,” Mr Puy said.
He said the Cambodia Rice Bank also signed two other agreements with Taiwan’s Agrosun Co. and Thailand’s International Rice Engineering Co. to supply machinery for the silos.
Mr Puy said farmers would no longer have concerns about rice production and price fluctuations after harvests. The rice, he said, could be stored when prices were low and released to be sold when prices recovered.
Mr Thach said that silos and warehouses in Kampong Thom, Prey Veng and Takeo would be smaller than in Battambang, but investment would be expanded in future in these strategic rice-growing areas.
Nguon Sokha, secretary of state at the Finance Ministry, said the government through the ministry had decided to inject more capital to the RDB to provide loans to all key players in the agricultural production chain – from farming communities, processing factories to exporters and microfinance institutions.