Agriculture Minister Blames Businesspeople for Rice Crisis

With the government scrambling to protect farmers from rapidly falling rice prices, Agriculture Minister Veng Sakhon on Wednesday poured blame on the private sector for boosting competing countries at the expense of Cambodia by importing products that could be sourced locally.

As rice farmers across the country have seen drastic dips in the value of their paddy—from about $250 per ton in mid-August to $193 last week—the government stepped in with $27 million in grants for rice millers in order to temporarily stabilize the market.

Agriculture Minister Veng Sakhon points to statistics on rice during a news conference in Phnom Penh on Wednesday. (Siv Channa/The Cambodia Daily)
Agriculture Minister Veng Sakhon points to statistics on rice during a news conference in Phnom Penh on Wednesday. (Siv Channa/The Cambodia Daily)

During a news conference at the Agriculture Ministry’s headquarters in Phnom Penh on Wednesday, Mr. Sakhon said Cambodia’s general failure to compete with its neighbors in rice sales was due to a lack of innovation and research by local businesspeople.

“Regarding the private sector, they are careless and not smart about competing in business,” he said. “They are not smart enough to compete regionally.”

Both Vietnam and Thailand have gradually lowered the price of their exported rice since 2012 in order to compete internationally, Mr. Sakhon said.

Cambodian businesspeople “should study the market prices and what our friends around us are doing—what they are able to do and what we are not able to do. Because it is very unfortunate that although we have customers, we make a loss,” he said.

“In Cambodia, there are factories established that produce food for fishes and food for other animals, which require rice grains for production,” he added. But businesses overlook the possibility of using domestic rice—or corn, or bran—to create these foods, and millers do not advertise them properly. 

Businesses in Vietnam, on the other hand, take advantage of local production, eliminating the cost of importing materials and keeping costs competitive on the international market, Mr. Sakhon said.

The agriculture minister said the private sector should also step in to help farmers be more business savvy, boosting everyone’s profits.

Prime Minister Hun Sen, flanked by ministers, bodyguards and government officials, steers a motorized plow in a rice paddy in Kandal province in 2013. (Sok Chamroeun)

“If we keep allowing farmers to select seeds without technical knowledge and then we buy their products, I think our businesses will lose,” he said, adding that better use of fertilizers and pesticides could also propel their yields.

“If we don’t have clear measures like that, we could lose customers,” he said. “The Royal Government needs to sit and think about the loopholes that we can help Cambodia’s private sector resolve.”

Lay Chhun Hour, CEO of City Rice Mill in Battambang province, said basic utility costs were already stretching the private sector, and that the government needed to come up with a plan to support long-term efforts to strengthen the country’s rice sector.

“How can we be smart if the cost of electricity—an important factor of production—is high?” he asked, citing significantly lower costs in neighboring countries.

The government should also provide high-yield paddy seeds, improve irrigation systems across the country to allow for multiple harvests each year and raise taxes on rice imports, Mr. Chhun Hour said.

“All of these measures would help us increase the competitiveness of the Cambodian rice sector.”

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