Four of the eight provincial rice-milling associations that comprise the national Cambodia Rice Mill Federation plan to form their own federation, a change prompted by what some members allege are the president’s questionable business practices, association officials said Monday.
“We are not happy with the activity of our current federation president. He has not respected our federation policy. We want to split off,” Prey Veng Rice Milling Association President Kim Vuth said.
He said four member associations are accusing federation President Phou Puy of borrowing money to loan the funds to members at a higher interest rate.
Phou Puy has denied the charge, saying that members misunderstood the credit issue. He said the federation recently received a $500,000 loan from the Rural Development Bank in Battambang to avoid a future rice shortage. The funds would be provided to all 280 federation members to purchase paddy rice throughout the harvest season.
The national federation has been blamed in the past for exporting paddy rice during harvest, leaving Cambodians short when faced with floods or drought.
“If they don’t have money to buy rice to store for the needs of the domestic market, the country will continue to lack the rice needed to eat,” Phou Puy said. The federation plans to borrow $2 million from the Rural Development Bank in 2003, he said.
Associations from Battambang, Siem Reap, Banteay Meanchey and Prey Veng do not trust the plan, Kim Vuth said, and will create an independent association to meet for the first time on Saturday.
Ministry of Commerce Secretary of State Sok Siphana said he supports the split, since competition yields efficiency.
“If one sector is not working, and they feel they can strengthen it by breaking apart, then it’s their choice. I welcome the change,” Sok Siphana said Monday. He said he had not heard of the internal dispute.
Paddy rice reaped by Cambodian farmers is normally sold to Thai or Vietnamese traders who then mill the rice in their respective countries. That milled rice is then sold to other countries, including back to Cambodia.
In 2002, between 300,000 and 500,000 tons of paddy rice were sold to Vietnam and Thailand, Phou Puy said. At least 40 percent of the total rice required to meet Cambodia’s needs—about 200,000 tons—was exported to Cambodia from the two countries.
(Additional reporting by Kate Woodsome)