What is sure though, that every company-lead intervention focuses on private profits rather than providing a public good. So there's always going to a healthy case against whatever is suggested.
But for the moment let's just see if this will remain and keep attuned to whatever changes lie ahead.
Properly the most important news from the Cambodian rice front was a visit and speech from the Cambodian PM to the Cambodian Rice Forum. From the Cambodia Daily (Jan. 25):
'Speaking to industry bigwigs at the annual Cambodia Rice Forum at the Sokha hotel in Phnom Penh, Mr. Hun Sen [PM] lauded efforts to increase the profile of Cambodian rice abroad, but noted that stiff regional competition had limited the country’s export totals.As always the problems facing exporting of Cambodia rice are limitless.
Eang Heang, owner of the Eang Heang Rice Mill Factory in Battambang City, said his inability to access an affordable supply of electricity was hindering production.
“We don’t have state-supplied electricity,” Mr. Heang said, noting that his milling factory was forced to run on a generator, as Electricite du Cambodge had yet to connect it to the main grid'.
Take for instance the currency of trade. The Khmer Times (Jan. 10):
'As China’s currency, the yuan, falls against the US dollar and other major global currencies, Cambodian rice exporters say they will need to adjust their prices to compete in the market they have targeted for expansion.
Hun Lak, vice president of the Cambodia Rice Federation [CRF], said prices of rice exports to China will need to fall due to yuan’s depreciation, which began at the end of last year. “Thailand and Myanmar lowered their rice prices and if we don’t follow suit we cannot sell our product [in China],” Mr. Lak said.
“Fragrant rice was priced at $740 per ton on average [in China] at the end of 2015, compared to around $800 early in the year and white rice is going for $430 per ton, about $20 to $30 lower,” Mr. Lak said, noting that pricing is in US dollars'.
'The Agriculture Ministry yesterday launched a strategy for the developing the sector, aiming to expand exports of agricultural products to spur economic growth through sustainable farming practices'.
What about the CRF itself? The Phnom Penh Post (PPP) on Jan. 13:'Song Saran, president of Amru Rice Cambodia, said that although it was good to have a strategic plan to develop agriculture in Cambodia, the plan is already out dated because the focus should be on rice production. Rice production and export needs to be addressed urgently, Mr. Saran said.
The government should fast-track railway rehabilitation to reduce transportation costs, lower electricity costs, offer low interest loans to the rice sector, build more storage facilities and invest in ports to ensure that Cambodian rice is competitive in export markets'.
'The Cambodia Rice Federation (CRF), the apex body of the nation’s rice industry, is looking to bring all relevant stakeholders under one unifying vision for the sector, citing the lack of cooperation among its members as a key reason for missing last year’s 1 million-tonne milled rice export target.
One of the biggest challenges faced by the federation, according to Lak [CRF vice president], was managing the country’s supply and demand of rice paddy. He cited instances where millers could not purchase paddy given that the farmers desperate for cash had already sold it to millers in neighbouring countries.
To remedy this scenario and achieve the export target of 1 million tonnes of milled rice per year, Lak said the federation’s members would need about $550 million for paddy procurement'.
A side note on the direct challenges ahead. The PPP (Dec. 25) reports on an issuance from the government warning farmers off a dry season rice crop:
'Farmers and exporters have expressed concerns over an Agriculture Ministry notice issued on Wednesday asking farmers to have only one harvest this upcoming dry season because of water shortages across the country, given that this could affect the paddy output next year'.
'Cambodian rice millers and exporters are increasingly eyeing the export of organic rice to the European Union and the United States, after shipments of this niche product increased this year....Amru Rice, one of the major rice exporters in Cambodia, started exporting organic rice this year and has so far shipped 1,100 tonnes to the EU and US. It sees potential in this new market, according to the firm’s CEO Song Saran'.
'Cambodian agricultural experts are suggesting a national standard for organic products.Finally some investment news. The Khmer Times (Jan. 2):
Cambodian farmers are increasingly growing organic rice and vegetables in some places, but there is no official certification available.
Officials at an annual conference held by the Center for Study and Development in Agriculture, or Cedac, say such a standard would increase the market value of organic products, helping diversify the agricultural market and would also prevent the spread of fake organic products.
Hean Vanhorn, director of the agricultural department at the Ministry of Agriculture, said the ministry is currently focused on a wider program called “good agricultural practice,” to increase yields, rather than organics. The development sector pushes for organics, he said, but they don’t provide as much benefit as GAP, he said.
GAP products aren’t harmful, he said, “so why do we need to resort to organic products that aren’t really scientific and not as accurate as GAP?” GAP ensures that food is safe to eat, he said. “What else should we be looking for?”
'Three of China’s major companies are planning to invest some US$400 million in the construction and operation of a state rice warehouse project in Battambang, Pursat and Kampong Thom provinces'.
'Given that Battambang, and other neighbouring provinces like Pursat and Banteay Meanchey account for a third of the country’s paddy output, the new warehouses were welcomed by Kann Kunthy, CEO of rice miller Brico.
However, Kunthy said it would be more useful if the warehouse were equipped with drying facilities, which would mean that fresh paddy could be dried and stored for a long period of time'.
'Thailand's military government will struggle to offload by a 2017 deadline some 14 million tonnes of rice in state warehouses left over from a policy of the civilian government it ousted, traders and exporters said...."I don't think it's possible, but even if it is, offloading that much rice within a short time will have a negative effect on market prices," said Supachai Vorraapinyaporn, president of Tanasan Rice Group, Thailand's third-biggest rice exporter."It will also encourage bidders to delay bids and wait to purchase rice at even lower prices in the next auctions."
'The Thai government aims to sell over 2 million tonnes of rice this year on a government-to-government (G-to-G) basis. But it admits a renewed attempt to sell rice to Iran may hit a snag because of escalating political conflict in the Middle East'.However there are others which would like to see the stored rice rather sooner than later. The Bangkok Post echoes (Jan. 18) business sentiments asking for the government to speed up exports (from stored rice). There seems no logic behind this call as all it seems is to expand trade at all costs, though more exports will mean lower prices so not necessarily more money ....
Despite previous assertions to the contrary, officials believe that the major rice growing areas will not suffer from drought during the first months of this year (Bangkok Post, Jan. 11):
'But irrigation chief Suthep Noipairote predicted drought would not ravage the Chao Phraya plain as the rice bowl of the country will have enough water until the end of May'.The Nation (Jan. 19) reports on government attempts to suppress production:
'Rice Farmers and traders have supported the government’s plan to reduce rice production to 25 million tonnes of paddy this year in the hope it will lead to the industry’s sustainable development and long-lasting stable prices.Thai Agriculturalists Association president Suthep Kongmark said rice farmers had agreed to cut rice production by about 5 million tonnes this year.The move followed a meeting of the Commerce Ministry's working committee to formulate a national rice strategy.Despite the decision to cut production, rice farmers still expect the government to provide clear-cut measures to support farmers in the cultivation of other economic crops in a bid to reduce the hit from the drought'.
VoA (Jan. 20) reckons that it's not the government that will see Thai farmers through the upcoming crisis, but their own resilience :
'But growers hope to weather the hard times by drawing on years of farming experience and hopes of a revival in rice prices'.However the article has precious little proof that this just might happen ...
Bangkok Post notes that the future may be a little bleaker for exporters (Jan. 28):
'Rice exports are expected to have another difficult year as the world market is likely to be volatile amid foreign exchange and oil price risks, according to exporters'.Then again the Nation (28 Jan.) leads us to believe that less production due to drought will mean higher world prices thus more export:
The Thai Rice Exporters Association (TREA) announced yesterday that Thailand should be able to export between 9.5 million and 10 million tonnes of rice this year, as drought has increased demand in many countries, while Thailand has plenty of rice stocks. TREA president Charoen Laothamatas said Thailand should be able to export at least 9.5 million tonnes of rice worth not less than US$4.77 billion (Bt165 billion). "The drought will encourage higher rice prices in the world market and domestically amid higher demand amid lower production in Thailand and many countries. In Thailand alone, rice output is expected drop by 15-20 per cent or about 2 million to 3 million tonnes from the drought," he said.No word though on what it means for farmers themselves ....
'Phanphet Agriculture Development Farm (PADF) is preparing to sell 10,000 tonnes of rice this year after negotiating exports with international partners'.Meanwhile Radio Free Asia reports (Jan. 24) that the Lao rice production has been a little disappointing.
'Laos’s rice production has fallen short of government targets for the second year running due to natural disasters and a seed shortage, dealing a potential blow to the Southeast Asian nation’s ambition of becoming a rice exporter.Only 10,000? How is that newsworthy?
It produced 2.70 million tons of rice in 2012, 10,000 tons short of the official goal, according to official figures'.
'The agricultural sector plans to slash rice cultivation by 100,000 hectares in 2016 to grow other grains used to feed animals, said Minister of Agriculture and Rural Development Cao Duc Phat.
About 7.6-7.7 million hectares of land will be set aside for rice cultivation with a total yield of 44.5 million tonnes, he stated, highlighting that the sector will enhance quality while reducing costs of rice production by using high-quality varieties with high value and applying comprehensive cultivating methods'.
'Huynh The Nang, chair of the Vietnam Food Association (VFA), said in the Vietnam News Agency that the sale of Thai rice would force the market price down, thus badly affecting Vietnam’s exports'.
'Global demand for natural rubber, used mostly in tyres, is slowing as the economy cools in China, the world's largest buyer of new cars. Supplies are expanding after a decade-long rally in prices to a record in 2011 encouraged top producers like Thailand, Indonesia and Vietnam to plant more trees. Output will exceed use for two more years, with the surplus quadrupling in 2016, according to The Rubber Economist Ltd, a London-based industry researcher....In Thailand, the local price of rubber sheet has plunged to about 37 baht a kilogramme from an average of 56 baht last year and 76 baht in 2013, according to the Rubber Authority of Thailand. The average cost of production is around 65 baht, the farm ministry estimates...."For price recovery, we need to see a significant reduction in supply or a strong growth in demand," said Macquarie's Ms Kovalska. "We're unlikely to see any of that anytime soon."
'Rubber planters have threatened to protest after prices plummeted to the lowest level in 10 years, saying some of them no longer afford to send their children to school. Prime Minister Prayut Chan-o-cha vowed to stand firm against the growers' growing pressure'.
The Nation continues (Jan. 8):
'Rubber farmers in Trang province are threatening to go on a hunger strike if the government continues to ignore their plight'.
The article also notes how the government is mostly ignorant of the situation and seems not to tolerate discussion of their policies.
Bangkok Post (Jan. 9) headlines that the PM will rule out rubber price subsidy. It also notes that
'... demonstrations are illegal'.
However by Jan. 11 (The Nation) orders were made for ministries to buy rubber, a way out of not subsidizing but still an (idle?) hope. Even former parlementarians who are known for the silent approval of the junta were beginning to become restless.
Something similar is reported in the Bangkok Post.
The Bangkok Post reports on how the new assistance measures for rubber growers are not fully welcomed (Jan. 13):
'Gen Prayut [self-appointed junta leader] had pledged to wean rice and rubber farmers off expensive subsidies used by the government it ousted, but -- under pressure to please politically powerful farmers -- it approved more than 36 billion baht in rural subsidies last year'.
'The announcement drew lukewarm responses from some farmers' groups'.The Nation reports likewise.
'The government will tomorrow finalise the buying price of rubber sheets totalling 100,000 tonnes from planters hit hard by the record low price of this commodity after planters demanded a minimum price of Bt60 per kilogram to cover their production cost.
'However, the NFC said the PWO may run into problems because it has no experience in intervening rubber market intervention. In addition to small planters, NFC suggested that the government should also buy from farmers' organisations that currently have a large inventory'.
'This government's reversal of its previous position against populist policies shows a double standard. Those in the former government are being prosecuted for the similar rice scheme while the current government will suffer a loss but remains immune'.
Wrapping up this blog entry with some miscellaneous articles from the region.
'“We really hope to triple the business (in terms of volume and revenue) in the next two years,” Mr. Lim said the sidelines of the listing of its P1 billion short-term commercial paper issue at the Philippine Dealing and Exchange Corp'.After tripling the business the stock market beckons ...
'A helpful clarification to the public debate on the “GMO Bill” was provided in a press conference of the so-called National Confederation for Safe, Secure and Sustainable Agriculture on Friday (BP, Dec 27). The group’s name may raise suspicions, but its statements such as “if the result of growing GM crops in open fields is good and safe, I don’t see any reason why not to give the GM seeds to give the GM seeds to farmers” and “releasing GM seeds onto the market is standard practice for a GM trial once the experiment proves there is no negative impact on the environment” show the confederation’s bias'.
The trials and tribulations of growing agricultural produce. Growing is not the hard part. Getting your money's worth is.
Vientiane Times (Jan. 7) on the growers of cassave who are doing everything correct, but still have little to show for:
'Cassava growers of Sangthong district in Vientiane still haven't been paid by Lao-Indochina Group Public Company for debts dating back to the 2012-2014 period.The Nation (Jan. 13) has an article on a seminar by Local Action Link which took a look at Thai farmer debt. And farmers debt leading to loss of land. Not really new(s) at all.
Information regarding the matter was sent to the government for resolution last year but there has been no answer yet and some local people were wondering if the factory was still operating or not, the district authorities reported.
The company still owed about 13.5 billion kip to local cassava growers who supplied them with the crops, after paying almost 4 billion kip of the total 17.5 billion kip owed, he said last year.
The company wanted to be in a position to pay all the money it owes to farmers in April last year, according to a rep ort provided to the government.
However, cassava farmers in Sangthong district have not received any money yet from the company or an answer from the government'.