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Rice industry growth hampered by disunity

Sacks of rice await sale at Phnom Penh's Orussey Market in 2014.
Sacks of rice await sale at Phnom Penh's Orussey Market in 2014. Eli Meixler

Rice industry growth hampered by disunity

The Cambodia Rice Federation (CRF), the apex body of the nation’s rice industry, is looking to bring all relevant stakeholders under one unifying vision for the sector, citing the lack of cooperation among its members as a key reason for missing last year’s 1 million-tonne milled rice export target.

“There is a lack of cooperation and confidence, with some members not following the CRF’s policy, which remains a challenge to reach our export target,” CRF vice president Hun Lak told reporters yesterday.

He said a common approach would help build confidence among farmers, maintain quality standards and improve the branding of Cambodian rice.

“If we can fix these obstacles we will reach this target in the next five years,” he said.

One of the biggest challenges faced by the federation, according to Lak, was managing the country’s supply and demand of rice paddy. He cited instances where millers could not purchase paddy given that the farmers desperate for cash had already sold it to millers in neighbouring countries.

To remedy this scenario and achieve the export target of 1 million tonnes of milled rice per year, Lak said the federation’s members would need about $550 million for paddy procurement.

He said the capital would be used to purchase 2.5 million tonnes of paddy, assuming that it costs 1,250 riel and 800 riel per kilo of fragrant and white rice, respectively.

CRF president Sok Puthyvuth said the capital requirement was just a ballpark figure based on a preliminary assessment of the sector’s requirements.

“We are still studying this, but once we agree on a specific number the government will play an important role to facilitate it,” he said.

Taing Chhung Ngy, director of market promotion at rice exporter LBN Angkar (Kampuchea), said unity was essential to the federation’s effectiveness.

He said that while some exporters would agree to a common policy, such as unified rice prices, during meetings their actions did not match their commitments.

“We cannot walk on the same path unless we understand each other’s problems well,” he added.

The Cambodia Rice Federation was established in May, 2014, and currently comprises 230 members.

The federation has an operating budget of $700,000 for two years ending May, 2016, which is covered by a one-time Ministry of Economy and Finance allocation, membership fees and from contributions by its 17 board members.

Additionally, the federation collects $1 per tonne of fragrant rice exported and $0.50 per tonne on white rice from its members.

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