Under Fire, Rice Federation Vows Action

A week after an alliance of millers and exporters criticized the Cambodia Rice Federation (CRF) for its inaction in the face of the sector’s possible collapse, the federation Wednesday announced the formation of a new task force to manage challenges facing its members.

The CRF, which was established in 2014 to represent Cambodia’s rice farmers, millers and exporters, met in Phnom Penh Wednesday morning to discuss a strategy for tackling looming threats to the industry, including a lack of financial support for local millers amid competition from neighboring countries.

CRF president Sok Puthyvuth said the new task force, comprised of senior federation officials, would more efficiently deal with members’ complaints, propose new funding from the government and communicate with local and foreign donors.

“The task force will study, comprehensively, who is in difficulty and how much money we need,” Mr. Puthyvuth said. “We will prepare a report for the prime minister and propose a special short-term budget [for millers].”

“We will also work with the Rural Development Bank and other partners to help get credit for our members,” he added.

Mr. Puthyvuth said the task force would also consider lobbying for the establishment of a specialized bank for Cambodia’s agriculture sector, a bank that would better support the needs of the rice industry, which is estimated to employ a fifth of the country’s population.

Early last week, a group of millers and exporters submitted a formal complaint to Commerce Minister Sun Chanthol, accusing the CRF of failing to adequately advocate on their behalf.

Phou Puy, a representative of millers in Battambang province who signed the complaint, said a key complaint was the lack of funds immediately available to millers for buying up paddy, noting the CRF’s practice of focusing on long-term funding.

“We don’t want long-term budgets. If we wait for $400 million, the sector will deteriorate,” Mr. Puy said at the CRF meeting. “We urgently need $20 million to buy rice paddy from farmers now.”

“We also need quotas on rice to limit imports into the domestic market,” he said.

Chan Sokheang, CEO of Signature of Asia, a local rice exporter, said it was difficult for family-run millers to compete with low-priced and often illicit imports, particularly from Vietnam.

“There should be a procedure for importing rice so we can compete with them fairly and transparently,” Mr. Sokheang said. Imports, he said, “must be legal, have quality standards and be charged the appropriate tax.”

In January, the Agriculture Ministry’s general directorate of agriculture reported that despite a 39 percent increase in rice exports last year, Cambodia sent just 538,396 tons overseas, well short of the government’s 1-million-ton goal. According to the CRF, researchers estimate that roughly 1 million tons of Vietnamese rice enters Cambodia illegally every year.

The task force will ask for between $20 and $40 million from the government to recover millers’ summer operating costs, CRF vice president Hun Lak said Wednesday, allowing them to purchase paddy for the harvest.

“About 10 millers have suspended their operations due to poor funds and an inability to compete with neighboring countries,” Mr. Lak said. “We need to get funds to our members to help them buy rice and prevent rice paddy from flowing out of the country.”

Hean Vanhan, deputy director-general at the Agriculture Ministry, said he welcomed the CRF’s plans, noting that of 4 million tons of surplus paddy produced annually, much of it flows to Vietnam for production—resulting in no financial benefit to local millers and exporters.

“I think the request for funds is reasonable because millers don’t have enough money to buy rice paddy,” he said. “Otherwise, the rice will flow to neighboring countries because farmers are in a hurry to sell their product.”

“We have to improve inspection and tighten controls [along the border] with armed personnel,” he added.

Mr. Puthyvuth, the CRF president, said he hoped the new task force would alleviate the challenges faced by his members but warned that changes would take time to be implemented.

“Prior to this, the understanding was that the rice federation only talked,” he said. “This move will showcase that we now solve problems, and don’t just show our faces on television.”

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