Rice Body Stirs National Pride and Anti-Competitive Enforcement

In an effort to stir national pride and bolster the faltering rice sector, the Cambodian Rice Federation has created a seal emblazoned with the federation’s logo to identify rice that has been grown and milled in Cambodia.

And if the carrot doesn’t work, they are also prepared to use a stick: more vigorous enforcement of laws that punish those who sell imported rice falsely claiming that it is 100 percent Cambodian grown.

Rice is displayed at a shop near Phnom Penh’s Central Market on Wednesday. (Siv Channa/The Cambodia Daily)
Rice is displayed at a shop near Phnom Penh’s Central Market on Wednesday. (Siv Channa/The Cambodia Daily)

An ad campaign featuring Cambodian rice, celebrity chefs and the new seal is set to be filmed this morning, with the ads scheduled to begin airing on television, radio and social media websites by this weekend, federation adviser Rod Bassett said.

Moul Sarith, secretary-general of the rice federation, said there was a twofold impetus for the creation of the seal and the ad campaign to promote it.

“We’d like to guard our markets—prevent rice sellers from mixing Cambodian rice with rice from neighboring countries, and thereby defrauding people,” he said on Wednesday. “The second is we’d like Cambodian people to take pride in their rice.”

Members of the federation’s board and other volunteers are visiting rice mills across the country to encourage them to use 100 percent Cambodian-grown rice, said Hun Lak, the group’s vice president.

“In order for the move to be effective, we have asked relevant institutions like Camcontrol, the Ministry of Commerce and the Ministry of Agriculture to punish those who trade rice that is not pure Cambodian rice, or to take measures to close their businesses,” Mr. Lak said.

Camcontrol, together with anti-economic crime police and customs officers, acts as the government’s fraud suppression arm. The law protecting Cambodian rice isn’t new, but the enforcement effort has taken on a heightened importance as a result of the challenges facing the industry.

Var Roth San, an adviser to the Commerce Ministry, said that those selling “fraudulent rice” would be jailed for a year and have their business closed. Those who used the federation’s seal fraudulently would be jailed for five years.

The moves come as sluggish global demand for rice has hit markets across Southeast Asia, driving down prices and bringing Cambodian rice into steeper competition with its neighbors. The government has pumped money into the rice sector over the past two weeks to prevent farmers from going bankrupt.

Challenges also come from further afield. Nigeria, once the world’s second-largest importer of rice at 3 million tons per year behind China, which imports 4 million tons annually, started self-sustainability measures last year and for months at a time has completely frozen rice imports. Other West African nations are following suit, Mr. Bassett said.

Thailand, meanwhile, is trying to rid itself of a nearly 10 million ton rice surplus and Vietnam, with its more cost-efficient production, is able to maintain a significantly lower price point for its crops, which frequently cross its porous border with Cambodia.

Rice from Vietnam sold for $25 per 50 kg bag near Phnom Penh’s Central Market  on Wednesday, whereas Cambodian rice sold for between $30 and $50.

The government’s efforts prop up rice prices by encouraging large purchases by businesses and wealthy individuals have helped to sell only a few tons of rice, said Mr. Sarith, who on Wednesday was visiting groups of rice farmers in Battambang. He estimated that 35 to 40 percent of farmers in the area had stock remaining.

Prices being offered by mills affiliated with the rice federation had fallen to about $150 per ton of paddy on Wednesday, despite $27 million in subsidies pushed through by the government and the Rural Development Bank.

Song Saran, CEO of Phnom Penh-based exporter Amru Rice, said that his company had been buying pure Cambodian rice since September 18. Having already purchased 1,000 more tons of paddy than initially planned, he said he doubted the ad campaign would push him to buy more, even though he thinks “it’s a good idea.”

Although the rice federation is putting concerted effort into the seal, it is not likely to have a big impact on the current market conditions, Mr. Bassett admitted.

“The majority of the domestic market is for rice grown in Cambodia,” he said. “The idea is to give the mills confidence. Right now they’re holding off.”

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