The government yesterday signed two memorandums of understanding (MoUs) with Chinese companies to bolster local rice production, build up storage infrastructure and increase exports.
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An MoU on upgrading rice production was signed with the Export-Import Bank of China, which is also known as Exim Bank of China.
A second agreement – focusing on the technical aspects of increasing rice production, such as the development, maintenance and operation of sector-related infrastructure, was signed with CITIC Group Cooperation.
The agreements aim to solve structural challenges that limit the potential of the Cambodian rice sector, with an emphasis on sustainability, according to a statement released by the government.
The new partnership will result in the development of 15 warehouse and silos across 11 provinces. The envisioned warehouse and silo network will have the potential to process up to 19,500 tonnes of rice per day and store nearly one million tonnes.
The MoUs also specify the size of loans that will be taken to finance the project.
According to the official statement, farmers can use their own rice output as collateral to take out a loan.
As per the MoUs, the Chinese companies will provide technical assistance and guidance to help the kingdom boost its rice exports to the Chinese market.
Kao Thach, the CEO of Rural Development Bank, told Khmer Times the new agreements are part of a $300 million loan programme from China.
“It is a big project that the government has considered for a long time.
“The loans will help stabilise the price of the commodity across the country and reduce rice surpluses,” Mr Thach said.
Song Saran, Amru Rice’s CEO, told Khmer Times yesterday that the private sector was satisfied with the new agreements, adding that they will help reach the goal of exporting one million tonnes of rice.
“We support the use of government warehouses and silos to store and process rice for export. We will work with the Ministry of Economy and Finance to implement the project,” he said.
“We will still invest in our own warehouses and silos to help farmers that do not have access to rice milling facilities in their area.”