Despite a surplus last year, the government will be forced to buy 40,000 tons of rice this year to feed poor Cambodians and ease food shortages stemming from unchecked cross-border trade, government economists and officials said Monday.
The rice is likely to be purchased from Thailand and Vietnam, they said. The imports come after an in-country surplus of 106,000 tons of rice last year.
Agriculture and Commerce officials said Vietnamese traders have been buying rice in large quantities from Cambodian farmers at higher prices than the local markets bring, precipitating a rice shortage in some areas.
“Normally it’s necessary to sell things to the person who gives the highest price,” said Te Duong Tara, an economic adviser to the Council of Ministers. “You go where you can make the most money.”
Agronomists explained that the demand for rice in Southeast Asia has skyrocketed since poor harvests last year from the El Nino weather phenomenon wracked the region.
Vietnamese traders on the border are paying premium prices for rice since Vietnam has maintained a high export quota despite its own production shortfall.
“Because Vietnam needs some rice for their own border regions, the traders have come in here and taken off the small surpluses that are usually around at the district level,” said Ken Noah Davies, acting director for the World Food Program.
The Cambodian government estimates that nearly 1.7 million tons of milled rice are needed to feed its population of approximately 11 million people. In 1995, the country reached a surplus in rice production for the first time in 25 years.
The government has bought less than 5,000 tons of rice each year since Cambodia began producing surplus rice, said Mao Thora, director of foreign trade for Commerce.
Agriculture and Commerce officials were unclear on when Cambodia last bought this much rice. It was also unclear Monday when the rice will be bought or how much it will cost.
The unchecked flow across the border—much of which is believed to be unlicensed—has forced the country to take action, economists and officials said.
To stop farmers and traders from selling rice across the border for better prices, the government should start matching the prices that the traders get on the border, said Chan Tong Yves, undersecretary of state for Agriculture. The government could then resell the rice locally at market prices or below, he said.
While he said the plan is a money-losing prospect, he explained there is no other way to ensure that all parts of Cambodia receive the rice they need. But he said it would be cheaper than what the government must do now: Buy at premium prices, import the rice and distribute it for little or no cost.
The Ministry of Commerce has written to the Council of Ministers asking that it be given the authority to sign off on cross-border trade.