Beneficiaries of Rice Prices Subject of Debate

With the price of rice stabilizing after months of inflation-induced price increases, government officials say that the nation’s farmers benefited most from the spike in prices earlier this year.

But others say those benefits passed most farmers by, and that those one step up the supply chain—such as traders and millers, who snatched up the bulk of the crop in December, after the rainy season but before the price increase—benefited most.

Yaing Saing Koma, executive director of the Cambodian Center for Study and Development in Agriculture, said inflated prices benefited only a small group of “dry harvest” rice farmers.

About 10 to 15 percent of Cam­bo­d­ia’s estimated 2 million rice farmers harvest their rice during the dry season in March and have therefore been able to sell their crop at the higher prices.

However, for the majority of rice farmers who sold their crops in Dec­ember and January, spiraling prices came too late to be good news.

According to Yaing Saing Koma, those wet season farmers were able to sell their rice at a slightly greater price than last year, but nowhere near the windfall that came later in the year.

Those standing to benefit the most were those who bought the crop before the prices went up and stockpiled it in warehouses waiting to sell, he said.

“Those who purchased the rice after the [2007] harvest and stockpiled it until prices went up in March made money,” Yaing Saing Koma said, adding that if prices remain inflated through the next harvest, wet season farmers would be in a better position to benefit.

Kim Savuth, president of the Cambodian Rice Mill Association in Takeo province, said Wednesday that some rice traders benefited from inflation, but not everyone was in the same boat.

“I, like most rice traders and mill­ers, signed contracts with exporters before the harvest to supply rice at prices between $330 and $390 per ton. Now the rice cost is $500 per ton,” he said, adding that comments about rice millers and traders benefiting were politically motivated.

“The hike in rice prices is an in­ternational event,” he said.

Song Hong, a member of Bat­tam­­bang province’s Rice Mill Asso­cia­tion, said there was no one particular group—farmers, millers or middlemen—that benefited outright.

Agriculture Minister Chan Sarun said Wednesday that it was ordinary farmers who benefited most when the price of rice rose recently to 4,000 riel per kg.

The government’s decision to ban rice exports in a bid to bring prices down was unpopular with farmers, Chan Sarun said.

Rice farmers “are making money that is why they wanted to lift the freeze on rice exports,” he said.

In an effort to mitigate the effect of the export ban on farmers, Prime Minister Hun Sen approved a Min­istry of Commerce request Mon­day that three provinces bordering Vietnam—Prey Veng, Kandal and Takeo—are now allowed to export their crop.

           (Additional reporting by Emily Lodish)

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