In an effort to curb the massive sales of unmilled rice to neighboring countries, the Rural Development Bank has launched a loan program for rice millers, officials said.
The Ministry of Finance has authorized the government-run bank to start offering millers in Pursat, Battambang and Banteay Meanchey provinces a total of $1.52 million in loans, said bank director Son Kounthor.
The goal is to help Cambodian rice millers compete with the higher prices that wealthier Thai and Vietnamese buyers offer Cambodian farmers for their paddy.
In Prey Veng province, for example, local millers have not been able to match the price of $100 per ton that Vietnamese traders are paying at the Neak Loeung ferry stop on the Mekong river, Kim Savuth, president of the Rice Millers Association for the province, said Thursday.
Because so much paddy is being sold outside the country and rice millers cannot process enough to meet the country’s needs, Cambodia has had to get food aid for people because many cannot afford the high cost of processed rice imported from Vietnam or Thailand, said Son Kounthor.
This program is an attempt to remedy the situation and have more rice grown and processed in the country in order to keep rice affordable, Son Kounthor said.
The bank will charge an interest rate of 0.5 percent. However, the loans will have to be paid back within six months and some millers are concerned about the short repayment period, Kim Savuth said.
The program was approved late last month following months of discussions between the government and rice millers.
Millers should use the loans to fill their warehouse with paddy to be processed later, said Phou Puy, president of the national Rice Millers Federation.
The bank will eventually make loans totaling about $2 million available to the country’s 258 rice millers, but at first only three provinces will be targeted.
