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Logo of Phnom Penh Post newspaper Phnom Penh Post - Few benefits for Cambodia from Thai rice policy

Few benefits for Cambodia from Thai rice policy

130204 08
A farmer checks on her rice crop before the harvest in a paddy field in Nong Phak Nak, Suphan Buri, Thailand. Bloomberg

Against the backdrop of the ongoing Thai government’s rice-pledging policy, Thai rice exports are expected to further decline this year.

While it may provide opportunities for Cambodia, the country has not yet benefitted much from the policy, industry experts said.

Under the Thai policy, the government buys paddy from the local farmers for a price higher than the market price.

“I think the Thai rice scheme may provide [the] opportunity for Cambodia to compete with Thai rice, as Thai rice will be more expensive,” said Yang Saing Koma, president of the Cambodian Center for Study and Development in Agriculture.

“However, we also face our own problems, such as lack of sufficient capital to procure paddy rice during harvest time, higher producer prices [due to low productivity], higher cost of export, and limited experiences in exporting business.”

According to the Thai Rice Exporters Association, Thailand exported 6.9 million tonnes of milled rice in 2012, an almost 35 per cent decrease compared with 2011.  

In 2013, Thai exports are expected to fall to 6.5 million tonnes, compared with the Com­merce Ministry’s projections of 8.5 million tonnes, the Bangkok Post reported last week.

According to Kim Savuth, president of the Federation of Cambodian Rice Exporters, Thai milled rice exports declined for two reasons. He said other countries such as India and Pakistan, which mostly stock for domestic food security, had now started to export. The other reason was Thailand’s pledging policy that made the exporting price less competitive.

Chhim Phallyboth, program co-ordinator at the Cambodian Organic Agriculture Association, said the slow growth of Cambodia’s rice exports showed Cambodian farmers and millers have not yet benefited from Thailand’s scheme.

Data from the Ministry of Commerce show that Cambodia exported 187,119 tonnes of milled rice in 2012, compared with 170,772 tonnes in 2011. The country aims to export one million tonnes of milled rice by 2015.

According to Sok Sarang, program officer at the Cambodian Institute for Research and Rural Development, the rice-pledging policy and decline in exports may help with reaching the export target if Cambodia succeeds in equipping itself with enough big and modern rice mills with the capacity to satisfy export demands. “Cambodia may benefit from the Thai government rice scheme policy if Cambodia improves its rice standard for export,” he said.

An impact that Cambodia is already seeing is the recent trend of Thai rice exporters entering Cambodia to escape  the high costs caused by the rice-pledging policy.

According to Renne Outh, owner of Mega Green Imex Cambodia, Thai rice exporters have already been entering Cambodia to export rice from here.

Last month, Reuters reported that Thailand’s third-largest rice exporter is shifting some of its business to Cambodia, following its second-largest rice exporter, Asia Golden Rice Co Ltd.

Capital Rice Deputy Managing Director Wanlop Pichpongsa was quoted as saying, “We can’t deny that the intervention scheme has forced us to move to Cambodia as rice there is much cheaper than at home.”

Sarang said, “Thai investors made... infrastructure [such as] big modern rice mills inside Cambodia to buy Cambodian rice for import into Thailand and for export.”

To contact the reporters on this story: Anne Renzenbrink at anne.renzenbrink@phnompenhpost.com
Rann Reuy at reuy.rann@phnompenhpost.com

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