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Ministry, Green Trade establish rice price floor

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Agriculture minister Dith Tina inspected rice mills in Battambang province last month. PHOTO SUPPLIED

Ministry, Green Trade establish rice price floor

The agriculture ministry, in collaboration with rice mills, have introduced a standard for ensuring the stability of rice commodity prices to deal with a drop in the price of paddy rice in Battambang and Banteay Meanchey provinces.

This was announced in a press release issued by the Ministry of Agriculture, Forestry and Fisheries on November 16.

Following a drop in the price of Phka Rumduol paddy in the two provinces, it said Green Trade Company – a state-owned enterprise under the Ministry of Commerce – has joined hands to introduce a standard minimum price to ensure the stability of prices in the wholesale rice market.

According to the press release, top-grade Phka Rumduol paddy is now priced at a minimum of 1,040 riel (around $0.25) per kg when purchased by Green Trade. This effectively gives every farmer an alternative buyer if they are offered anything less than that amount.

Phka Rumduol is a type of long-grain jasmine rice that has emerged as a top choice of international buyers, and is one of the varieties exported under the “Malys Angkor” certification mark. The Cambodian Agricultural Research and Development Institute (CARDI) said it had not released the variety for farmer use until 1999, after 10 years of development and testing.

Hun Lak, chairman of the board of the Cambodia Rice Federation (CRF), said the fall in the price of paddy occurs every year because the market buying list was yet to come and this year clients from China and the European community who contracted to buy Phka Rumduol are late, thereby leading to a drop in prices.

In addition, now that people have harvested Phka Rumduol for this season, they need to sell it in order to earn the money needed to pay back loans used to buy farming and agricultural tools, machinery and supplies.

“The price of paddy this year is cheap when compared to that of last year. But if we look at processing, the current milled rice is also cheap, both in our country and abroad. Market order contracts also have yet to arrive,” he said.

He added that the introduction of the standard pricing to the CRF in Battambang province is to prevent the paddy price from falling even further.

“So, whoever offers to buy paddy at a lower price than this standard, please don't sell it to them. If they instead sell it to [Green Trade], which is working with the agriculture ministry, it will help prevent the price from falling below 1,040 riel," he said.

Lak added that while many farmers were not satisfied with being paid a price of 1,040 riel because they wanted it set at 1,100 riel to cover their loans, they were missing the big picture because this measure sets no maximum price but simply guarantees they will find a buyer at Green Trade if they are offered anything less.

The press release said the ministry is also cooperating with commune administrations to communicate the minimum price as well as sending agricultural officials in each province to monitor the implementation, and that any farmers who encounter difficulties should contact their provincial agriculture department directly for advice or information.

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