The Cambodia Rice Federation (CRF) on Thursday met with the Ministry of Commerce to discuss policies for strengthening the country’s ailing rice industry, and unveiled a plan to develop a price-support mechanism to guarantee Cambodia’s rice export price, officials said.
The talks come a week after the CRF announced the formation of a new task force to manage the impact of cheap foreign rice imports and under-funded millers on Cambodia’s rice industry, in response to pressure from its members.
In Thursday’s meeting with Commerce Minister Sun Chanthol and other ministry officials, Sok Puthyvuth, CRF president, said those present had agreed on a policy agenda to be discussed by government officials in the coming weeks.
“An inter-ministerial meeting chaired by Deputy Prime Minister Keat Chhon will consider a $20 million to $30 million ‘special budget,’” he said. “The meeting will help support the industry facing the illegal imports of rice from Vietnam.”
Following the talks, Moul Sarith, CRF secretary-general, said the federation was also developing a long-term strategy to support rice millers and exporters, which included plans to create a consortium of millers and exporters to manage Cambodia’s rice export price.
“The biggest members from the CRF will be chosen to be ‘consortium partners’ to manage and set one export price,” Mr. Sarith said, adding that the initiative should be off the ground this year.
“Currently, our members compete against each other when foreign buyers come to buy our rice, which forces prices to fall,” he said.
The proposed consortium would control the export price of rice by regulating supply, benefiting the country’s entire rice supply chain, Mr. Sarith added.
“If exporters get a good price, rice millers and farmers will benefit too as it will allow them to sell at higher prices.”
But Mao Thora, secretary of state at the Commerce Ministry, said it was too early to discuss the viability of the planned consortium.
“A report of the meeting this morning is being prepared to send to the prime minister,” he said. “First we have to solve the immediate problems including preventing the inflow of rice from Vietnam and credit support to millers.”
Srey Chanthy, an independent economist, was skeptical that the consortium would solve the industry’s problems, adding that price-support could backfire on the entire sector.
“It is just an idea, I do not think this is possible to create,” he said.
“Foreign buyers look to buy good quality rice at a good price in international markets,” he added. “If the price is set high, they could just buy rice from Thailand, Vietnam or Burma instead.”