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Some millers are exploiting desperate farmers: Sokhon

Agriculture Minister Veng Sokhon has accused private sector rice millers of exploiting desperate farmers. Photo supplied
Agriculture Minister Veng Sokhon has accused private sector rice millers of exploiting desperate farmers. Photo supplied

Some millers are exploiting desperate farmers: Sokhon

Agriculture Minister Veng Sokhon accused private sector rice millers of exploiting desperate farmers, arguing that if they really lacked capital to purchase rice paddy as they claimed, they would have been quick to snap up the government’s $27 million emergency loan package.

Speaking yesterday at a meeting between government and private sector rice industry leaders, he said the loan package offered in September had failed to stop the flood of rice paddy into Vietnam.

“Despite the fluctuations in rice prices, it is not the main issue for why farmers are exporting paddy,” he said. “I suspect that the issue with the rice industry is not external, but rather the genuine unwillingness of millers to help our farmers.”

Sokhon said the $27 million loan package was designed to give local millers sufficient operating capital to purchase local rice paddy, and to beef up their storage capacity. However, only $1.5 million of the package has been disbursed to just a handful of applicants.

“What is the main issue weighing down the rice sector? Is it really a shortage of capital?” the minister said incredulously.

Sokhon announced that Prime Minister Hun Sen has approved an additional $15 million loan package solely for developing rice storage and warehousing capacity. But he cast doubt on the willingness of rice millers to respond.

‘We really need the loans’
Kao Thach, CEO of the state-owned Rural Development Bank (RDB), the institution in charge of disbursing the emergency loans, said it was incomprehensible to him why millers were reluctant to apply.

“We provide a fast and easy loans and it is not complicated,” he said. “I have no idea why we are in this situation if rice millers were really facing a shortage of capital.”

Sok Puthyvuth, president of the Cambodian Rice Federation (CRF), said that the sector needed time to ensure that once millers took the loans they would be used effectively and transparently.

“We are trying to work together in order to use the budget transparently,” he said. He argued, however, that the 7 percent interest rate attached to the loan was too high and should be lowered.

“We really need the loans from the RDB, but the interest rate should be less than what commercial banks offer,” he said.

Sokhon retorted that as an “emergency” loan, there should be no excuses for a delay and that the CRF should sort out its budget transparency issues as soon as possible.

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