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withdrawn from the project after dissatisfaction with its progress.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

quick-fix solutions.

"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

parties."

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

help.

"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

said.

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

this stage.

"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.