Ricenet, the ambitious project launched in June last year to bring together Cambodia's
rice milling sector using information technology and marketing innovations, has become
the subject of a heated spat involving its funders and managers.
The Mekong Project Development Facility (MPDF), the project's funder, said it had
withdrawn from the project after dissatisfaction with its progress.
"[We have] asked auditors KPMG to examine how the funding has been used by Enterprise
Development Cambodia (EDC)," said MPDF program officer Chan Ang. EDC has been
working for the organization of the sector since 1999.
In response, EDC chief Tony Knowles said that MPDF had been unrealistic in expecting
"The MPDF has taken a limited view of the whole issue about the organization
of the private sector and building its capacity to a level where it can improve its
output and increase its negotiating powers to better market products to both domestic
and foreign buyers," he said.
"This is essentially a slow process requiring long-term commitment from all
The EDC programme was designed to prepare the private sector for its gradual integration
into the market economy, he said.
Until recently Cambodia's 350 private millers operated independently, which meant
they did not get the best prices for their rice and had little hope of competing
with their more organized counterparts in Thailand and Vietnam.
To remedy that they formed regional associations under the EDC program. EDC needed
extra funding, which MPDF agreed to provide. Shortly afterwards the two organizations
decided to bring together the regional bodies under the umbrella of a central federation
and initiate their networking.
It was during this last stage - the Ricenet program - that problems arose. MPDF paid
for computers and internet connections linking the Kingdom's eight provincial rice
millers associations with the Phnom Penh based central federation.
It also funded a website and set up a monthly newletter to help millers exchange
news and views. Another body, the Khmer Internet Development Society (KIDS) trained
three rice millers from each association in computer use.
One year later, said Chan Ang, MPDF discovered that the computers were lying unused
in most association offices and the newsletter had not progressed beyond its first
issue. The organization complained that not enough had been achieved.
Knowles said middle-aged traders from the provinces, preoccupied with their own businesses,
were unlikely to become internet savvy overnight.
"They can't be expected to spend their days at the association offices,"
he said, adding that introducing information technology to a sector still getting
to grips with the basics of a market economy was probably premature.
Knowles provided an example illustrating this: Cambodia's rice millers had taken
exception to a report drafted by a multinational company Dryfus, which had been brought
in by MPDF to study the existing capacity of the rice milling sector and to explore
the possibility of developing it further.
After the report concluded that rice millers were not ready for a market economy,
Knowles said, the MPDF decided it was not interested in the market development component
of the EDC program. The rice millers said that they did not need a foreign expert
to tell them what they already knew, and that this was the very reason they wanted
"The fact that the millers have organized themselves into provincial associations
and have formed a central federation to actively exchange information is itself quite
an achievement," he said.
Knowles said EDC did not try to provide solutions to the millers' individual problems.
"Instead, we appoint the local staff, train them into marketing experts and
leave it to them to take care of all their present and future problems," he
In a further twist, Knowles claimed that the rice millers had severed their relationship
with the MPDF due to its unrealistic demands.
However, Phou Phoy, president of the Federation of the Cambodian Rice Millers' Association
(FCRMA), denied that. He said the millers did not want to lose MPDF's support at
"We will approach the MPDF to seek their direct support for our project after
our national congress (set for September 13-14)," he said.
Knowles said MPDF's withdrawal would not affect the program as other organizations
had pledged their continued support.