Prime Minister Hun Sen urged provincial governors yesterday to stop government officials from colluding with traders to fix agricultural commodity prices, giving farmers no choice but to sell their products at below-market rates.
The PM’s call comes a day after the Ministry of Agriculture, Forestry and Fisheries released an announcement stating that an investigation would be launched into the possible scheme.
“Please look into the issue. Do not only wait for the Ministry of Commerce or the Agriculture Ministry [to take action],” he said speaking at the groundbreaking ceremony of National Road 55 in Pursat province.
“This is a serious case. If found to be the case, officials who are found plotting with traders will be punished,” he added.
The premier went on to say that prices for agricultural products should be determined by “free market mechanisms”.
“Those who offer the highest price will get the products. Let the price be set by the free market,” he said.
Chan Sophal, the governor of Battambang province, said there were no such cases of official involvement in price rigging schemes in his province.
He said, however, that he would encourage rice millers to trade directly with farmers instead of having to go through traders.
“Now I have talked to rice millers to be more open to buying paddy from farmers and giving them a good price instead of buying from traders.”
Big traders often block smaller brokers from competing with them, said Kan Vesna, a rice farmers’ representative in Battambang province, leaving fewer options to farmers who are often under pressure to sell because of outstanding loans.
“It is good that the government is now trying to strengthen the local authorities’ capacity to tackle this issue, but we still need to wait and see how effective the implementation will be,” he said.
“So far, there is not much action. It would be more effective if there was a hotline so farmers could report any irregularities to officials.”
Middlemen dealing Cambodian agricultural commodities are mainly traders from neighbouring countries who round up goods from farmers to sell to buyers across the border, said David Van, senior adviser to the Cambodia Rice Federation.
“In this instance the middlemen are rich and even lend money to farmers to buy seeds and fertilisers to use, and in return buy back the crops from farmers at harvest time,” he said in an email yesterday.
“The government has not been able to provide any assistance to alleviate the burden of access to loans or working capital for millers/exporters despite repeated pleas over the last few years.”
Van added that provincial departments of ministries like the Ministry of Commerce should provide weekly updates on global market prices to farmers and traders so they do not fall prey to