State-owned Rural Development Bank (RDB) plans to request another $50 million from the government for the rice industry, as it has already lent $49 million to the sector, says RDB CEO Kao Thach.
He said while rice facilities are being put in place, demands for loans will continue to grow and that RDB only has $1 million remaining to offer as loans, despite it being the beginning of the harvesting.
“We are [receiving] more loan applications, and as rice facilities are already in operation, demands for loans will increase,” he said.
The government’s decision to disburse loans directly through RDB sidestepped the Cambodian Rice Federation – the industry body that has lobbied the government since March 2016 to provide emergency funds to its members.
In September 2016, the government transferred its share of a $27 million package to RDB so the bank could disburse loans to millers, allowing them to purchase paddy from farmers.
Another $23 million was injected by the government in August last year, bringing the total to $50 million aimed at propping up the struggling industry.
Since loan demand is higher, RDB, Thach said, will request other $50 million from the Ministry of Economy and Finance to meet the industry’s demand.
“We need to request the [ministry] to inject another $50 million for next season, as our budget this season could not meet the needs of the rice industry,” he said.
Lay Chhun Hour, the owner of Battambang province’s Lay Se Rice Mill, who has used RDB loans for two years, said the government’s budget for the rice industry is key to collecting paddy and maintaining the market and price for farmers.
“Since the government provides loans through RDB, it will not only help rice millers but farmers by maintaining the paddy price and preventing it from unofficially flowing excessively to neighbouring [countries],” he said.
Chhun Hour asked the government to increase its loans for the rice industry.
“If the government increases its loans three-fold, all the paddy can be collected to meet production targets for exports,” he said.