A farmer reaps her rice crop with a sickle, watched by her child. In 2007 Cambodia expects to have a rice surplus for export greater than the one million tons in 2005 and 2006.

T hanks to increased irrigation and technical advice given to farmers on fertilizers and seed strains, the government expects 2.2 million hectares of paddy to be harvested this year, an increase over last year, says Chan Tong Yves, Secretary of State of the Ministry of Agriculture, Forestry and Fisheries.

But Federation of Cambodian Rice Millers' Associations President Phou Puy told the Post on November 27 that farmers are bypassing them and selling direct to businessmen from Vietnam and Thailand, because local rice millers lack the capacity to cope with bumper rice crops, and can't match their foreign competitors' prices.

Puy said there are 300 mills across Cambodia that were small and medium enterprises whose owners are members of the FCRMA. They were unable to get the financing to build their capacity and match the prices offered by millers over the borders.

He said the Ministry of Economy and Finance had lent $4 million to the FCRMA to help it restrain the leakage of the rice crop over the borders between 2006 and 2007. But he said that was not enough to compete with the Thais and Vietnamese, so the rice continued to flow over the borders.

Puy said the price of rice now is between $100 and $200 per ton. Cambodia produced about one million tons surplus to its needs in both 2005 and 2006 and expected a bigger surplus in 2007.

"In general we expect to have a good harvest and good market to export to many countries," Puy said. "We are waiting to see the price now."

MAFF's Yves told the Post on November 22 that although some areas faced drought in November and December it was not expected to affect rice production and the surplus for export was expected to be greater than in 2005.

He said with increased irrigation and technical advice on rice seeds and fertilizers the government expected a harvest of 2.2 million hectares of rice paddy.

"We don't have any problems so far, and the situation of the harvest is good because we have been building the irrigation network, and giving farmers modern technical advice on planting short-period seeds, and the rains have been good," Yves said.

Nhim Vanda, first deputy president of the National Committee for Disaster Management (NCDM) estimated that Cambodian farmers are expected to export 800,000 tons of rice to Vietnam and Thailand.

Vanda said he had visited several areas, including Kampong Speu, Prey Veng and Kampong Chhnang provinces, where water shortages had been reported before the harvest, but he had found that it was not serious.

He said that the Ministry of Agriculture, Forestry and Fisheries and the Ministry of Water have charged officials with improving the water supply.

Vanda said the government had allocated more funds for building an irrigation network and for extending agriculture by taking control of the distribution network for fertilizers and pesticides.

"I am not an economic expert to predict an economic impact, but our farmers have been working hard, and even those who sell their grain will not suffer from food shortage," Vanda said.

He said the price of rice rose when neighboring Thailand banned export of its own rice in response to floods this year.

The Economic Institute of Cambodia (EIC) published a report in October that an effective irrigation system and natural resource management remain measures urgently needed for growth in sustainable agricultural to achieve poverty reduction. The EIC said agricultural is the main source of income for the country's poorer inhabitants.

Agriculture was a crucial sector of the economy, accounting for 71 percent of employment, 31 percent of gross domestic product (GDP), but only 3 percent of exports.

The EIC said the agriculture sector is expected to score a meager growth of 4 percent in 2006; in 2005 it grew a record 16 percent due to the combination of favorable weather and irrigation renovations.

The World Bank's East Asia Pacific Regional Update, released in November, said poverty reduction and economic growth have accelerated in Cambodia in recent years, although the poverty level still remains high, with more than 50 percent of the population living on less than $2 a day.

The update said that in neighboring Vietnam poverty reduction had been occurring at exceptionally rapid rates in Vietnam. Vietnam's 2004 Household Survey suggests that a sharp acceleration in poverty reduction in 2002-2004, almost all of it in rural areas, resulted from rapid productivity gains in agriculture.