Following corn farmers’ protests over low prices last week, the Rural Development Bank has proposed using a government rice subsidy to purchase corn and shore up demand.
In September, the government approved a $27-million grant as rice farmers struggled and grew restless amid plunging paddy prices.
The government-backed Rural Development Bank (RDB), which provided $7 million for the scheme, said later that month that the cash injection had helped to stabilize the market.
Yesterday, Kao Thach, the RDB’s chairman, said the bank’s board had met earlier in the day to discuss the proposal for corn, and it was now sending it to the Finance Ministry for approval. Last week, about 500 farmers in Battambang province’s Kamrieng district blocked a national road to protest low prices, and authorities met with corn traders hoping to negotiate better deals. The traders refused to budge, however, from the originally agreed price of 3.5 baht per kg, or about $0.10.
“We already tried our best to help talk with the buyers,” said Song Sopheak, police chief of neighboring Phnom Prek district, where about 200 farmers gathered at the district office on Saturday to plead their case. Chou Ngeth, senior consultant at Emerging Market Consulting, said the RDB’s proposal could help inflate prices in the short term, but without systemic change the problem would keep recurring.
Many crops in Cambodia are produced for export to only a few markets, mainly Thailand or Vietnam, limiting farmers’ options when buyers’ demand flags, he said.
“They only come to buy from us when they don’t produce enough for their use,” Mr. Ngeth added. The issue was exacerbated by Cambodian farmers overproducing crops that did well the previous year, leading to an oversupply, he said. Un Sreyoun, a 40-year-old corn farmer from Kamrieng district, said she hoped for more local buyers to drive up corn prices.
“If more Cambodian traders came, Thai dealers would not dare to lower the price,” Ms. Sreyoun said.
But Mong Reththy, chairman of agro-industrial conglomerate Mong Reththy Group, said his company had bought 1,000 tons of corn from Battambang almost every day this year for his livestock feed factory, and argued that current prices were fair.
“The price [offered] is already good enough for the farmers. Good deal, indeed,” Mr. Reththy said.
Discouraged by the outcome of the protests, Ms. Sreyoun said she was considering leaving the country to find other work.
“I can’t pay off my debt, so I would like to sell off the land and go earn money in Thailand working as a construction worker,” she said. “Whatever job I can get.”
(Additional reporting by Hang Sokunthea)