Samdech Hun Sen 23 on November 2011 presided over opening of “The 16th Government- Private Sector Forum” to assess the difficulties facing investors in Cambodia and it also “reviewed the implementation progress of the Policy on the Promotion of Paddy Production and Rice Export”. He added: we have determined to use 2015 as a base year in order to promote the paddy production to more than 4 million tons including export of at least 1 million ton of milled rice and make Cambodia’s milled rice internationally recognized.
“The procedures related to exports have been improved and both official and unofficial spending on export has been reduced and gradually eliminated; this has contributed to the enhancement of Cambodia’s competitiveness.”
“We necessarily need to continue evaluating the effectiveness of the implementation of quick-win measures and understand the weaknesses as well as request for more reform measures or additional measures to link short-solution with medium and long term measures in order to ensure the enthusiastic environment in the implementation of measures toward achieving set objective.” Indeed, based on implementation made so far, we are still facing a number of problems that need to be improved and resolved. These tasks include:
1. Seedling: Some farmers still continue using their own seeds, grown themselves, from one season to another and other farmers use importing rice seeds. Although ten types of seed have already been selected, their usage within the country, in particular at major paddy production areas, is limited and other seeds have yet to be considered by farmers. The distribution of recognized seeds is still limited.
2. Plantation Techniques and Yield Collection: In general, the knowledge of farmers is still limited including the preparation of soils, seed selection, plantation, water management and use, the use of fertilizers, pest controls. Also, post-harvest techniques include: cutting, threshing, transporting, drying, and maintaining, of famers remain limited, which are impacting the processing of paddy and quality of rice.
3. Farmers’ Organization Structure: in particular small farmers are fragmented and not formed into a group or cooperative, this factor makes it for farmers in getting techniques, credit, and bargaining power.
4. Paddy Collection and Processing: in general, there are many investments related to paddy processing but the size and the speed do not respond to what the Royal Government wants yet. For example, though the financing for paddy collection has been gradually resolved and improved remarkably, but the shortage of financing remains a major challenge. This issue makes milling machines and rice exporting companies unable to sufficiently in the collection of paddy that farmers produce and paddy is still exported to neighboring countries. Besides, though the Royal Government has launched a number of new mechanisms, they are not enough. Finding solution for this issue is complicated, and it requires relevant institutions to take part in particular the involvement of commercial banks, finding more investment from both domestic and foreign investors and finding new source of finance, which is the concern of the banks.
5. Electricity: the price of electricity remains a major challenge causing high processing and making Cambodia’s rice remains uncompetitive.
6. Paddy Processing Association Network: due to the isolation and independence among milling machine owners, milling machine association has not been well established; and it is the cause for not achieving the economy of scale in the paddy processing. This factor has impacted the capability of rice export of Cambodia; in general, it has limited large purchases of milled rice from Cambodia. Processing capability for exports is still limited though at present investments in major rice milling machines are ongoing that can process of up to more 1 million tons of milled rice, some of these investment projects are yet to be completed while others have insufficient equipments/technology.
7. Paddy/Rice Standard and Sanitary Standard: the establishment of national paddy/rice standard which complies with the market can be used as a yardstick for producers, processing units, exporters and consumers.
8. Market Access: in spite of the effort of concerned ministries/institutions in seeking the market for Cambodian rice, it is still a big challenge that must be immediately addressed, for instance, bilateral trade agreements. In particular, majority of Cambodian rice has been exported to the European Union which is an existing opened market. Overreliance on the EU market is a big risk. Therefore, the good coordination between exporters, rice millers and farmers is the way forward. The establishment of the “Association of Cambodian Rice Exporters”, which has its own and independent management structure, is necessary for addressing some common issues such as lack of trust and leadership, promoting participation in the improvement of policies and timely addressing any problem. Access to market intelligence and international competition situation remain a big challenge as the Paddy/Rice Information Unit has not been established yet.
The Royal Government has also invested USD 101.43 million in 2009 and USD 188.79 million in 2010 in the continued expansion of irrigation. As of June 2011, the Royal Government has made an additional investment of USD 220 million.
At the same time, the Royal Government, through the Ministry of Economy and Finance, is planning to provide financing, in a form of no-interest credits, of about USD 80 million in 3 years (2011-2013) to Electricité du Cambodge for the investment in the establishment of sub-transmission lines in order to increase the scope of energy supply for more people to use and connect with paddy production and milling machines areas.
For the implementation of measures for paddy collection and processing, the Royal Government has doubled the money of Agriculture Support and Development Fund from the initial fund of USD 18 million to USD 36 million.
This fund is managed by the Rural Development Bank, and the Bank has provided credits to 251 Rice Millers Associations in 10 provinces. The Royal Government through the Ministry of Economy and Finance has established Credit Guarantee Scheme with an amount of Riel 105 billion, equivalent to USD 25 million, to encourage commercial banks to provide loans for paddy collection and processing.
Also, the Ministry has also signed agreements on financing cooperation and on risk sharing in agriculture and agro-industry management with the World Bank and International Financial Cooperation (IFC) with an amount of USD 25 million to promote the provision of loans to agriculture projects such as paddy-milled rice.
In fact, in 2010 Cambodia has a total of 2.79 million hectares of paddy plantation, in which 2.77 million hectares have produced 8.25 million tons of paddy yield, an increase of 8.75% compare with 2009. Cambodia is boosting rice exports to one million tons of milled rice by 2015.
Source: The Southeast Asia Weekly, Nov 27-Dec 3, 2011, Vol. 5, Issue 48, Page 7
where is the rice export policy document?
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