Wednesday, March 8, 2017

Emergent


Cambodia's main rice related news concerns the governments' emergency loan, which (it seems) is not so urgently required. Or are we missing something? The Phnom Penh Post (Feb. 17):
'With the Kingdom’s main rice harvesting season wrapping up, just a fraction of a government emergency loan package that aimed at giving millers the liquidity they needed to purchase rice paddy during the harvest cycle has been disbursed, leaving the government and private sector divided on why.
Kao Thach, chief executive of the Rural Development Bank (RDB), the government-owned bank that was entrusted last September with disbursing $27 million in low-interest loans to millers, said only five loans were issued due to a lack of demand. He said that despite rice millers claiming to be suffering financial difficulties, few seemed genuinely interested in obtaining the bank’s low-interest credit lines.
...
Hun Lak, president of the Cambodia Rice Federation (CRF), said the loans given to the millers, though small, were helpful to those who requested them. He added that it will be necessary to have similar packages available every harvesting season if Cambodia is to reach its target of exporting 1 million tonnes of rice annually.
The problem, he declared, was that the loans arrived too late in the season for millers to fully utilise them.
“The emergency loan was not made available at the right time to be best used by the whole rice sector as currently millers face low prices and smaller demand,” Lak said. “If millers cannot find buyers, they will not be able to borrow the money, which requires interest payments.”
More on the same topic. The Phnom Pemh Post (Feb. 13) has an interview with the CEO of Thaneakea Srov (Kampuchea) Plc, Phou Puy. A question on the emergency:
'Why have millers who called for emergency loans not used the funds the government made available through the RDB?
Some millers have already accessed the $27 million in loans to buy paddy from farmers, but a lot have not been able to apply for loans because they have not had the storage facilities to qualify. Because the rice loans are linked to storage collateral, they have been really slow to be used, because everybody has the same constraints'.
Armed
Likewise from the region there's not so much to mention. 
As always Thailand is concerned about their position as top rice exporter. The Bangkok Post (Mar. 3):
'Thailand continued to lag behind India in terms of rice exports in January due to long holidays during the month. Charoen Laothamatas, president of the Thai Rice Exporters Association, said Thai  rice shipments totalled 823,401 tonnes worth 12.3 billion baht (US$346 million) in January, down 19.7% by volume and 20.7% by value year-on-year, he said'.
While in Vietnam the same concerns are heard albeit now it's the position of Vietnam as a rice exporter. The Vietnamnetbridge (Feb. 20): 
'In order to compete with the Thais, Vietnamese exporters have had to lower the selling prices. However, they would incur losses because the domestic price is on the rise.
This means that low prices won’t be the ‘weapon’ for Vietnam to compete with Thailand in the world market, especially in Africa and China, which favor low-cost products. 
Huynh The Nang, chair of the Vietnam Food Association (VFA), commented that Vietnam has to cede its market share to Thailand in some markets which have demand for white rice because it cannot compete with Thailand in prices.
 ...
In the context of slow sales, experts believe that Vietnam would rather gather strength to compete with rivals in the high-end market segment. China, South Korea, Singapore and the EU have high demand for high-end products'.
In Laos there are concerns on the growing of dry season rice. The Vientiane Times (Mar. 8):
'The Ministry of Agriculture and Forestry has set this year's target for dry season rice production lower after the country's rice farmers failed to meet last year's mark. 
...
Large numbers of rice farmers, especially those in the northern parts of the country, have shifted to growing small commercial crops and their export as they can spend less initial investment capital and get higher yields which lead to better profits and requires less water as well.
Rice planting requires higher capital initially and can have large water requirements but also receives lower production on average than most other commercial crops.
However, the ministry can not confirm why rice farmers' output in Laos has tended to trend downwards as the ministry says that it has not yet studied the issue in detail.
Authorities have also deemed rice fields in the northern provinces unsuitable for expansion of irrigation systems as the yield is lower and, therefore, so is the return on investment'.
Former government policies are now deemed bogus. The Bangkok Post (Feb. 21):
'The Legal Execution Department can now seize assets worth 20 billion baht from former commerce minister Boonsong Teriyapirom and five others in the allegedly bogus rice sale scheme during the Yingluck Shinawatra government, says permanent secretary for commerce'.
Wonder what history will accord current juntas' decrees? 

Mystery
We often forget that there are opportunities for alternatives for rice growing, even thogh it remains a staple crop. The Phnom Penh Post (Mar. 2) takes a look at the cassava market situation and highlights how little prospect doesn't seem to deter growing the crop:
'Cambodian farmers continue to expand cassava cultivation despite falling commercial prices for the crop and low international trade volumes, new data from the Ministry of Agriculture show.
The total area of cassava cultivation grew 34 percent last year, with the starchy tuber planted on 771,000 hectares nationwide, compared to 574,000 hectares the year before.
Sok Vanna, deputy director of the department of industrial crops in the Ministry of Agriculture, said it was a bit of a mystery as to why farmers continue to expand cassava cultivation while complaining that it is an unprofitable crop.
...
Farmers have long complained of the crop’s price volatility and a general decline in international market prices. The price of dried cassava has fallen about 50 percent over the last two years to around 400 riel per kilo.
Yang Phirom, a business adviser for Cambodian Centre for Study and Development in Agriculture (CEDAC), said that efforts to shift farmers away from cassava have been hindered by their lack of confidence in viable alternative crops. However, he said farmers could secure better prices for their crops if they received support to help them avoid dealing with middlemen.
“Cassava cultivation has become habitual even if there is not a good market because farmers do not see that they have any other option,” he said'.
Not for everybody, but the Phnom Penh Post (Feb. 10) also looks into growing local oranges; the situation of which is very challenging:
'Orange farmer Say Samoeurth has been battling an invisible foe. He rarely sees his adversary, a tiny insect known as the Asian citrus psyllid, but wherever it goes this winged pest leaves behind a trail of destruction.
Most of the 1,000 orange trees that Samoeurth planted on his 2-hectare farm have been affected, with a bacteria transmitted by the sap-sucking insect stunting their growth and causing their leaves to turn colour and fall off. Some of defoliated trees still bear fruit, but its green, mottled appearance and bitter flavour prevents its sale in the market.
Samoeurth, who has been growing oranges on his land since 1996, said he first learned of the link between the psyllid and “citrus greening disease” from government agriculture officials. But no solutions were offered, and their advice was simply to cut down the orchard and plant something else.
...
Sovanmony [director of Battambang’s provincial agriculture department]said some small farmers had given up on oranges and switched to other fruit cash crops, such as mangoes and longans. But the high profit potential of oranges – with farmers able to rake in over $20,000 from the harvest of one hectare of healthy trees – had tempted many farmers whose fields were ravaged by citrus greening disease to re-plant oranges.
“We know that it is profitable, but it is not a long-term investment and farmers will face high risk as the disease continues to spread,” he said'.
Then there's the prospects for rubber. The Phnom Penh Post (Feb. 25):
'The government is seeking intrepid smallholder farmers to pilot a project that would transform 6,000 hectares of cropland in two provinces into a patchwork of small rubber plantations.
The Ministry of Agriculture is eyeing 5,000 hectares of land in Ratanakkiri and 1,000 hectares in Battambang for the project, and has already secured interest from thousands of smallholder farmers, according to Pol Sopha, general director of the ministry’s rubber development department.
“In the first step, we identified 2,500 farming families in two provinces, Battambang, Ratanakkiri, who were willing to invest in growing rubber and ready to convert their land from crop farms to rubber plantations,” he said yesterday.
The ministry is currently preparing a feasibility study on the substitute crop project.
...
The government’s push for smallholder rubber plantations comes as rubber prices show a bounce after a five-year global supply glut that depressed prices. The price for natural rubber recently topped $2,400 per tonne, making the cash crop profitable once again, according to Sopha [Pol Sopha, general director of the ministry’s rubber development department].
Cambodia currently has more than 430,000 hectares of rubber plantations, the majority of which are large-scale projects on economic land concessions (ELCs). Smallholder farms cultivate rubber on about 150,000 hectares.
Sopha estimates that another 300,000 hectares could be brought under cultivation.
Heng Sreng, director of Cambodian rubber producer Long Sreng International, which has over 5,000 hectares of rubber under cultivation in Kampong Cham province, cast doubt on the wisdom of the project, arguing that rubber was a cash crop better suited for large producers that can leverage economies of scale. He said smallholder farmers would be better off investing in crops such as mango or longan, which offer higher returns.
He said a farmer could earn $10,000 profit per year from a hectare of mangoes, compared to $4,500 per year from rubber and with far less risk.
“Rubber is not a priority for smallholder farmers as its market is volatile and producers remains dependant on other countries because there are no rubber factories here,” he added'.
Control
More agricultural notes from the region, starting off with northern neighbour, Laos. 
The Vientiane Times (Feb. 11) has some trade news which seems to be more an intention: there are no certifications of origin, probably meant to ease Vietnamese investment in agricultural processing in the country or better said making Laos a cheap source of agricultural profit for their eastern neighbor.
'Unprocessed Lao farm products raised and grown by farmers and Vietnamese investors in the 10 Lao provinces that share a border with Vietnam will enjoy tariff and value-added tax exemptions when exported to Vietnam.
The Lao Ministry of Agriculture and Forestry recently issued an announcement detailing the new policy under the Border Trade Agreement, which the Lao and Vietnamese governments have signed in a move to increase the volume of border trade'.
Northwards of the Lao are more neighbors to contend with. The Vientiane Times (Feb. 16) notes how the government is belatedly looking into the banana growing conundrum:
'Five companies with banana plantations in Xayaboury province have been ordered to stop growing the fruit, but can still plant other replacement crops in compliance with regulations.
Four of the companies affected are Chinese backed with banana farms located around the villages of Phonthong, Namtuan, Naluam and Nalae, with one Lao farm located at Vangkham village, all in Phieng and Xayaboury districts, Xayaboury province.
Some companies are now being instructed to remove banana trees from the farms after authorities ordered a suspension of operations after inspections revealed they were not complying with regulations.
Head of Xayaboury Agricultural and Cooperative Promotion Sector, MsSengthongPhengdee told Vientiane Times yesterday local authorities have ordered the five target companies to stop planting banana trees and remove them on more than 600 hectares in Phieng and Xayaboury districts. This follows an executive order from the Prime Minister's Office issued at the end of last year.
...
Bokeo authorities also plan to suspend the operations of 18 companies who have invested in banana plantations. The cultivation of about 6,000 hectares of banana trees by 23 companies in Oudomxay province will also be suspended.
According to investment statistics, Chinese companies have invested in more than 764 projects in Laos at a cost of more than US$7 billion in areas such as mineral products, agriculture, electricity, artefacts, and tourism. Of these projects, 552 were funded by Chinese companies, while Laos and China jointly invested in 212 projects. China is Laos' top source of foreign investment. The total value of imports and exports from Laos to China exceeded US$1.5 billion over the last nine months of 2015-16. Of this figure, the export value totalled US$950 million, while imports were valued at US$570 million'.
In a followup article from the same source (Mar. 7) the Chinese side is reflected:
'Some Chinese investors plan to shutter their banana farms in Laos and relocate to other countries while others plan to replace the yellow herbaceous fruit with other agricultural crops after sustaining losses.
...
Technical adviser to Chinese banana farms in Bokeo province, Mr Ruan Shui Jin spoke to Vientiane Times on the occasion of the China Chamber of Commerce Fujian Branch in Laos meeting in the Golden Triangle Special Economic Zone recently.
Mr Ruan said operators were attracted to Laos because it is proximity to China.
Available land in Laos was suitable in terms of size, quality and value for money.
However, many have not been able to turn a suitable profit due to labour supply and related cost issues. 
...
According to a Bokeo provincial authority report issued recently, Chinese investors have been operating banana farms in the province for more than five years.
In 2015 about 11,000 hectares were under cultivation for bananas. Currently just over 8,000 hectares are under cultivation by 43 companies, mainly in Huayxai and Tonpheung districts.
The area has been reduced because the operations of some banana farms have been suspended with some now growing oranges, pumpkins and mangoes instead.
More than 500 hectares of such land is now using fertiliser made from natural ingredients.
However, Bokeo provincial authorities plan to suspend the operations of 18 companies who have invested in banana plantations after inspections revealed they were not complying with the regulations agreed to. 
...
According to the regulations and policy on banana farming investment in Bokeo province, the crop may not be grown in rice fields or close to schools or communities.
Its cultivation is prohibited in areas that are adjacent to the source of waterways, while the use of chemicals is also limited.
Last year, the Prime Minister's Office ordered farms that were preparing to cultivate banana trees to cease work.
Companies that own thousands of hectares of banana plantations where trees have already been planted will not be allowed to plant any more suckers after harvesting the current crop'.
It seems that if Laos labour is too expensive at a few dollars a day, then labourers elsewhere in Southeast Asia are even being handed a more harsher deal ... Kudos to authorities taking action, even a little late.

More control. According to Bangkok Post (Feb. 17):
'The Department of Agriculture wants to control the use of agricultural chemicals, including those on its watch list, raising hopes of increased food safety.
...
The law also limits imports of harmful chemicals or allows for the import of safer substitutes'.
Oddly though, much of the chemicals banned are not imports ...
The same source (Feb. 27) has a very long expose on the celebration of high tech agriculture as it it seeks to the answer for the upcoming challenges. Little word though on how techno agriculture leads to social loss. On the other hand with little guidance change is inevitable.

Thursday, February 9, 2017

Outdated

Don't know whether or not this update affords a lead, it's very much a mixed bag with unusually long quotes. It's mostly what's not rice, that's interesting.

However let's start by looking within the Khmer kingdom. The Phnom Penh Post (Jan. 6) kicks off with a review of last years rice exporting efforts:
'The growth of rice exports slowed to a crawl last year, according to new data, signalling that government initiatives to increase the competitiveness of Cambodia’s mainstay crop had fallen short and raising concerns about the future of the agricultural sector.
According to data received from the Ministry of Agriculture yesterday, Cambodia’s rice exports totalled 542,144 tonnes last year, a mere 3,700 tonnes, or 0.7 percent, more than the country shipped in 2015. The nominal increase followed a growth spurt in 2015 that saw exports climb by 39 percent that year.
...
Hun Lak, vice president of the Cambodian Rice Federation, said 2016 proved to be an exceptionally challenging year for Cambodia’s rice industry. He explained that local exporters had to compete with rival rice-producing countries that were flooding the market with their product, while local farmers struggled against low paddy prices exacerbated by the sector’s shortage of capital and storage capacity.
...
Song Saran, CEO of Amru Rice, said looking back on 2016 exports, the result was “acceptable,” but not satisfying. He said Cambodia’s supply chain was flawed.
“Our supply chain is not balanced, as if you observe the export trend [during the course of the year] it is uneven,” he said.
“Our supply of rice paddy is limited at the beginning of the year, but we have an oversupply of paddy at the end of the year.”
Saran added that despite the high quantity of rice exported, the commodity’s low price level was causing profits in the industry to decline'.
The competition wades in. The Cambodia Daily (Jan. 9):
'An Agriculture Ministry official said on Sunday that slowing growth in Cambodian milled rice exports—increasing just 0.7 percent last year—was the result of outdated policies and was a concerning trend.
...
Mr. Vanhan [ministry’s director of the general directorate of agriculture] said a new rice export policy was being formulated by the Supreme National Economic Council, and would take into account the ways the last five-year plan had failed.
He said last year’s drought could not be blamed for the slowing exports, noting that the industry had hit its target of producing 4 million tons of surplus rice. By contrast, exports are still barely over half the 2015 target of 1 million tons'.
Rather than policies, it's poor market conditions that are to blame for the sluggish growth. Unfortunately the market will not change much in the year ahead.

The above were direct reports on the government data. They were as follows. AKP (Jan. 12):
'Last year, Cambodia exported 542,144 tons of milled rice to international market, up 3,748 tons or 0.7 percent compared to the amount in 2015, pointed out a report of the Ministry of Agriculture, Forestry, and Fishery to Prime Minister Samdech Techo Hun Sen.
The Cambodian rice was exported to 65 countries, mostly to China (127,460 tons), followed by France (78,329 tons), Poland (64,035 tons), Malaysia (38,877 tons), the Netherlands (28,690 tons), Belgium (22,885 tons), Czech (22,815 tons), Italy (18,619 tons), UK (17,673 tons), Germany (16,616 tons), it added.
If classified by region, EU remains the main buyer of Cambodian rice. Last year, EU bought in total 341,066 tons or 62.9 percent of the Cambodian exported rice, it underlined.
Currently, Cambodia has 85 rice exporting companies, most of them are local rice millers'.
To wrap up this first chapter, a curious posting from the Phnom Penh Post (Jan. 18):
'A Chinese company has unveiled a plan to establish rice production on 4,000 hectares of leased farmland in Takeo province, local media reported yesterday.
The company said it would consider building a large rice mill on the land to process up to 100,000 tonnes of rice a year for export to China. It also unveiled a conceptual plan for a $100-million feed mill'.
Now we all have our doubts whether this will turn to reality, but can someone tell me why there is 4,000 ha farmland waiting for a company to be leased? Surely ensuring locals access to this, would be of a higher priority? Or has the investor been sold short?

Quitters
Cambodia's neighbors are faring none the better on the export market. Vietnamnetbridge (Feb. 3) highlights this by this article:
'Vinh Hoan Seafood Company has decided to quit rice production and export though it spent big money on building a factory and choosing high-quality rice sources for export.
Analysts said that Vinh Hoan made a reasonable decision. Many other rice export companies took a loss in the last year, had to be dissolved or kept operations at a moderate level. Many exporters reported a sharp decrease of 40-45 percent in export volume in 2016 compared with the year before.
...
Seventy-six percent of Vietnam’s rice is exported to Asian markets at low prices, which explains why Vietnam can only obtain modest profits despite high export volume, according to Kien. Meanwhile, more orders have been placed with neighboring countries'.
The news on rice exports from Thailand. The Bangkok Post (Feb. 4): 
'Thai rice exports are expected to drop by 3.8% in volume this year, with export prices likely to stay relatively low because of higher global supply and stiffer competition.
The Thai Rice Exporters Association said shipments should reach 9.5 million tonnes this year, fetching US$4.3 billion or about 150 billion baht.
...
Sales of premium hom mali rice are expected to climb 1.7% this year from 2.36 million tonnes last year. Last year Thailand shipped 9.88 million tonnes of milled rice, up by 0.9% from a year before, valued at $4.4 billion. Thailand trailed only India, which exported 10.43 million tonnes last year, while Vietnam shipped 4.95 million tonnes'.
And the prospects are not much better. The Bangkok Post (Feb. 2):
'Rice shipments from Thailand, the largest supplier after India, are likely to decline about 4% this year amid increased competition from Vietnam and other producers.
...
Competition from Vietnam may cut white rice exports by about 400,000 tonnes to 4.6 million tonnes even as sales of premium jasmine grade rise climb about 9% to 2.5 million tonnes, ...
...
World rice production will increase 1.6% to 480 million tonnes and consumption will rise 1.5% to 477.8 million tonnes, according to the USDA. Output from India, Thailand and Vietnam, the world’s top exporters, will increase this season, data show'.
Though both Thailand and Vietnam seem to be seeing adversity ahead, Lao press sees silver linings in their rice export market albeit solely in that for organic rice. The Vientiane Times (Jan. 16):
'China has approved the purchase of 20,000 tonnes of organic rice a year from Laos, according to Prime Minister Thongloun Sisoulith.
Mr Thongloun said in talks with Khong district authorities in Champassak province last week that Chinese premier Li Keqiang had agreed to the deal.
...
About 4,000 tonnes of sticky rice and nonglutinous rice has already been delivered to China, and this year the shipment was to be 8,000 tonnes'. 
The same source (Jan. 30) has more:
'Savannakhet and Champassak provinces may soon be producing about 40,000 tonnes of so-called 'clean', organic rice for both local markets and export.
Deputy Director of the provincial Agriculture and Forestry Department, MrViengsaySipraphone, told Vientiane Times on Friday that present estimates suggest that about 40,000 tonnes of rice will be harvested in Savannakhet and Champassak, although the figure may differ in practice.
...
An anonymous official in Savannakhet said that about eight countries from the EU as well as China are importing 'clean' rice from the province. Savannakhet is growing clean rice for export to the EU and China, he said'.
Sunrise
In seeking alternatives the Thai junta is hedging it's future on their so-called megafarms. The Bangkok Post (Jan. 16):
'The government is committed to ramping up the rice megafarm scheme this year, for which it provides soft loans, machinery and agricultural equipment to farmers in order to cut production costs and raise productivity. The scheme will cover 1.05 million rai of related farmland. 
...  
The megafarm project implemented last year entails participating farmers pooling their rice farmland together into one large plot, after which modern equipment, including harvesting machinery, is deployed.
Participating farmers can borrow up to 5 million baht at 0.01% interest from the Bank for Agriculture and Agricultural Cooperatives (BAAC), while the Commerce Ministry is responsible for the marketing and sales of the rice and finding buyers.
Acting as a group, participating farmers can negotiate for better access to markets and financial resources such as loans. This grouping and joint management is intended to ensure efficiency in the entire rice business -- from planning to farming and marketing to distribution.
...
Ms Chutima, a former permanent secretary for the Commerce Ministry, said the ministry will also focus this year on more actively promoting food safety and security and good agricultural practices (GAP) in the farm sector.
"One of the ministry's top priorities this year is to promote the proliferation of GAP so that we can declare to the world in the future that Thailand is a supplier of safe agricultural products such as vegetables to the world," said Ms Chutima. "Although chemicals are used while farming, it requires a long-enough period before harvesting and the residue levels must be at a tolerable rate. This, once achieved, will lead Thailand to the next step of development: chemical-free farming and ultimately organic farming."
So if the future lies ahead, why then does the future also seem behind us? I mean 50 odd years ago, everything was organic. Then we nuked this with fertilizers and chemicals, just to learn that this might be just one big mistake.

Anyway, the Bangkok Post (Jan. 19) continues to explain:
'The government aims to cut rice production to 27.2 million tonnes of paddy from an average of 33 million tonnes a year, shrinking the rice plantation area to 60.6 million rai from 68 million as part of its agricultural reform. Tanit Anakewit, deputy permanent secretary to the Agriculture and Cooperatives Ministry, said farming in inappropriate locations produced low-quality rice, mainly during the second crop, and such areas will be encouraged to grow other crops.
...
Mr Tanit said the government's rice megafarm scheme is a move in the right direction as it cuts farmers' production costs. The megafarm project provides soft loans, machinery and agricultural equipment to farmers to cut production costs and raise productivity. It was implemented last year and participating farmers pool their farmland into one large plot, using modern equipment to harvest.
...
Somporn Isvilanonda, a senior academic from the Knowledge Network Institute of Thailand, suggested the government concentrate more on hom mali rice development, noting how Thai premium hom mali rice has been losing its aromatic quality because of improper cultivation processes. The government is also being urged to promote growing coloured rice and organic rice that can fetch higher prices and faces less competition'.
Instead of rice. Bangkok Post (Feb. 1):
'Best known for its historical sites, Sukhothai has introduced a new attraction, a 1,200-rai field of blossoming yellow Indian hemp, grown by farmers to replace second-crop rice. Suchart Rianthong, Sukhothai land development director, said farmers could bury Indian hemp plants to make natural fertiliser for their future rice cultivation. Besides, they could sell hemp seeds at 20 baht per kilogramme to the local land development office and receive a 500-baht subsidy per rai from the government'.
And it also attracts tourists.

Juicy
There's quite a lot of non-rice agricultural news from Cambodia, mostly concerning market niches. 
The Phnom Penh Post reports on mango exports (Jan. 17):
'Sweet and juicy mangoes grown in Cambodia have been finding their way into top Asian markets for years, but until now only through Thai and Vietnamese brokers, and often repackaged or processed into juices and jams to disguise their Khmer origin.
Local producers’ lack of modern processing and packaging equipment meant the only way to access the lucrative Chinese, Japanese and South Korean markets – where the value of Cambodian-grown mangoes can jump by 6,000 percent – was indirectly through middlemen, who raked off most of the profit. But a number of companies are looking to change this supply chain model, and investing accordingly'.
A very interesting read on how an agricultural product in abundance seeks to find markets. 
More abundance, this time from avocado's which have a lot more difficulties in seeking markets, even domestically. The Phnom Penh Post (Jan. 26):
'Avocados have never been a big part of the Khmer diet, making infrequent appearances in dessert dishes or drenched in condensed milk as a smoothie. But a small local market for the green pear-shaped fruit is forming, and experts say it could be a profitable crop for intrepid farmers.
...
Sreng Cheaheng, a Ratanakkiri provincial agriculture official and avocado farmer, said he started farming avocado trees on his land three years ago and now has over 100 trees occupying half a hectare. He said the trees yield about 3 tonnes of fruit a year, which he supplies to the local market for about $2 per kilo.
...
Cheaheng said the market for avocado was growing, and profits were respectable. Dealers who pay his farm-gate price of $2 per kilo can easily sell it in local markets for up to double that price. He said compared to coffee, the other cash crop that grows well in the province’s cool mountain climate, avocados are easier to grow and have higher market demand.
...
Mexican chef Mario Galán, who purchases about 100 kilos of avocado per month for his authentic Mexican restaurant in Phnom Penh, said he experimented with local avocado varieties, but found the quality and taste inferior to Hass avocados imported from Australia and Mexico'.
The same source (Jan. 9) continues with it's ag news, but with a crop that already has a market snuffed out:
Kampot pepper prices are set to remain stable for another year as part of an agreement between local producers that caps prices through the end of 2017, a representative of the pepper association said yesterday.
Ngoun Lay, president of the Kampot Pepper Promotion Association (KPPA), said the price of Kampot pepper, which was awarded the World Trade Organisation’s geographical indication (GI) status in 2010, will not increase during the upcoming season, with harvest set for March.
...
He explained that in 2015 an agreement was signed whereby 18 local pepper producers agreed to maintain prices until the end of 2017 at $15 per kilo for black pepper, $25 per kilo for red pepper and $28 per kilo for white pepper.
“We negotiated the price increases with our buyers in order to achieve a sustainable income for our farmers,” he said. “Right now, we do not plan to increase prices after the agreement, but we will study the market in 2018, at which point, if we do increase prices, it will only be by $1 or 50 cents.”
...
Hong San, director of the Memot pepper and agricultural development cooperative [different province, i.e. not Kampot pepper], said it was difficult to compare the production and prices of the two products, though he noted that pepper produced by his cooperative sells for a much lower $6 to $8 per kilo.
“We cannot compare the price of GI Kampot pepper with our pepper because the quantities harvested are different, though we are satisfied with the current price,” he said.
“If we followed GI production requirements, our farms would not be able to survive because GI requires farming without the chemicals that we use, though our pepper is still of an acceptable standard and is of better quality than in neighbouring countries.”
Quite odd, how it are producers that are setting the prices; what happened to supply and demand? 

Glamour
Whereas the future for rice exports and rice cultivation sees plenty of speed bumps ahead, other major crops seem to be faring better, notably rubber. The
Bangkok Post (Jan. 12):
'Authorities projected a loss of around 10% of rubber output in the 2016-17 crop year after unseasonal flooding affected the country's main growing region, a senior industry official said on Thursday.
...
Thai benchmark USS3 rubber was quoted at 81.05 baht per kilogramme on Thursday, a significant jump from 71.04 baht on Dec 29, before the floods started, according to data kept by Reuters.'.
The rubber news from Cambodia is less positive. The Phnom Pehn Post (Jan. 13):
'Cambodia's beleaguered rubber industry looks set for a turnaround as international rubber prices continue their strong rebound. Local traders and industry officials said yesterday they were optimistic that rubber prices, which doubled during the course of 2016, would continue to rise as the global economy recovers and demand driven heavily by developing economies catches up with supply.
Pol Sopha, general-director of the rubber department at the Ministry of Agriculture, said local rubber producers exported 148,000 tonnes of natural rubber last year, a 13.5 percent increase on 2015’s output.
...
A $50 export tax was charged on rubber when the market price was below $2,000 per tonne. Now exporters must pay $150 per tonne'.
Seems absurd that.

Cassava fares worse. The Phnom Penh Post (Jan. 19):
'With the start of the dry harvest season for cassava kicking off, farmers are calling for the government to support the struggling sector with initiatives to address recurring capital shortages and market volatility.
Sum Heang, head of the Pailin Cassava Association, which represents 52 cassava-growing families in Pailin province, said yesterday the unglamorous root crop has always taken a distant second place to rice on the government’s agenda.
...
Cassava is Cambodia’s largest agricultural export crop by tonnage, and believed to be the second-biggest by value after rice. The cash crop, which has never been a staple of the Cambodian diet, is cultivated on nearly 600,000 hectares, yielding about 13 million tonnes a year for export.
Official export data provided by the Ministry of Agriculture show about 2.3 million tonnes of sliced cassava, 570,000 tonnes of fresh cassava and a small volume of cassava starch, were exported in 2015, mostly to Thailand, Vietnam and China. Most of the remaining 10 million tonnes were believed to have been smuggled across the country’s borders.
...
Mey Kalyan, senior adviser for the Supreme National Economic Council (SNEC), said all of Cambodia’s agricultural sectors were facing issues, and the government had limited resources to address all of them.
This meant the private sector would have to take the lead, starting first off by ending the individualism and haphazard practices that were driving down market prices.
Kalyan suggested that the cassava sector’s stakeholders band together to form an industry body, similar to the Cambodian Rice Federation (CRF).
...
Lor Reaksmey, a spokesman for the Ministry of Agriculture, dismissed the idea of an industry body for cassava producers, claiming it was unnecessary. He said the government recognises the importance of cassava and was seeking new markets for the crop as well as solutions to the issues that farmers face'.
Sugar? Sugar prices are on the rebound, however Thailand's domestic market will have to reform first. The Bangkok Post (Jan. 14) reports on the restructuring:
'Local sugar prices will likely be floated in October, or April next year at the latest, in line with the restructuring plan for the industry. At present, the Cane and Sugar Board under the Industry Ministry sets the ex-factory price of white sugar while the Commerce Ministry sets the retail price, now at 24.50 baht a kilogramme. Thailand has long fixed retail prices above market rates to ensure profits for farmers. The domestic retail price is higher than it should be based on global comparisons, although the gap has narrowed considerably from about five baht per kg two years ago.  
... 
In March, the country slashed its forecast for 2016 sugar exports to 7.1 million tonnes from an earlier estimate of 11 million. Stockpiles in India, the world's third biggest exporter, will fall to 23.3 million tonnes next year, the lowest in over a decade, as consumption outstrips supply, the Indian Sugar Mills Association said in July. Thailand is the world's second-largest sugar exporter by value after Brazil'.
The same source (Jan. 19) continues with an outlook, less rice, more sugar:
'Ethanol shortage concerns in Thailand have subsided on the good sugar yield from the latest sugar cane crop, providing abundant molasses for the ethanol industry, says a senior industrial official. 
...
Supply of the raw materials is expected to rise substantially in the coming years and the government is encouraging farmers to switch from growing rice to sugar cane, which can generate more added value'.
Soiled
Vientiane Times (Jan. 21) describes how authorities are trying to direct banana growing (a popular alternative for upland rice) in a more sustainable direction or else. It seems the else is the only option:
'Bokeo provincial authorities plan to suspend the operations of 18 companies who have invested in banana plantations after inspections revealed they were not complying with the regulations agreed to.
...
Last year, the Prime Minister's Office ordered farms that were preparing to cultivate banana trees to cease work. Companies that own thousands of hectares of banana plantations where trees have already been planted will not be allowed to plant any more suckers after harvesting the crop.
The suspension has been ordered because of the use of hazardous chemicals by Chinese companies, which are harming people's health and the environment.
Chinese-run banana farms are not only found in the north of Laos, there are also hundreds of hectares of bananas in Vientiane province and the capital.
According to a National Assembly report in October last year, some provinces were using too many insecticides, pesticides and chemical fertiliser, but this issue did not feature in reports submitted to the Assembly.
Some people became ill and some had allegedly died after pesticide was sprayed on farms, but the reports did not say where this had occurred.
There are no bananas from Chinese farms for sale in local markets as the farms send all their fruit to China. The bananas are packed in cardboard boxes for immediate shipment to China after they are harvested'.
More on the bananas affair. RFA (Jan. 27):
'Authorities in the northern Lao province of Bokeo suspended the operations of 18 Chinese-backed banana plantations after they discovered widespread violations of the regulations governing the use of agricultural chemicals, government officials told RFA's Lao Service.
...
Instead of growing the native “kuay nam” banana, the Chinese plantations generally produce the world's top banana, the Cavendish.
While the Cavendish is the most popular banana, growing it in the northern provinces requires the use of a cornucopia of pesticides, herbicides, rodenticides, and fertilizers to boost production and ward off the 28 diseases and 19 insects that attack banana plants.
The use of the chemicals has helped the banana plantations thrive, but they have also leached into the ground water, and the thousands of plastic packages that the chemicals were packed in have been strewn across the countryside. In one case, the pollution was blamed for a death'.
Struggle
Finally, the Cambodia Daily (Jan. 12) with some lengthy quotes from an article on how land issues concerned with a proposed sugar plantation are not being dealt with:
'Some 100 farmers who have spent the past 11 days sleeping on land to guard it from bulldozers in Preah Vihear province are exhausted by empty promises from the government to solve their problem.
About 300 km away, in an office on the 15th floor of Phnom Penh Tower, an adviser to Rui Feng, part of a group of linked Chinese firms that plans to turn the area into a sprawling, $360 million sugarcane plantation, said he was feeling much the same way.

“We have struggled with the local people,” Wang Chen said on Wednesday. “The government in Preah Vihear didn’t talk to them. I don’t know why.”
When Rui Feng and its four sister companies were first considering a Cambodia investment 10 years ago, it was an imperfect but plausible scheme, he said.
“If we wanted to build a modern sugar factory—to compete with Thailand, India—we’d need 40,000 to 60,000 hectares. If the productivity of the land is less, then there needs to be more land,” he said.
Cambodia was not the perfect place for the investment. Electricity is expensive, Mr. Chen said—so much so that the company built its own biogas power plant to power its operations. The logistics of the remote site cause perennial difficulty, with unreliable transportation and shoddy roads.
...
Filing for five separate economic land concessions (ELCs) to avoid the legal limit of 10,000 hectares, the companies managed to get 40,000 hectares in Preah Vihear province in 2010. They brought in state-of-the-art machinery—threshers, harvesters—to mechanize the process.
Rui Feng started to clear a stretch of land along National Road 64 in Stung Treng province that stretches as far as the eye can see, and to lay the foundations for a factory to process all the sugarcane being seeded there.
It was in 2013 that locals from all over the area started to demonstrate.
They said that Rui Feng was clearing their ancestral rice land. They slept nights in corners of the concession and nearby fields to prevent them from being cleared. They confronted tractors. They appealed to local rights groups Licadho and Adhoc, and to provincial authorities.
...
Those on both sides agree that authorities in Preah Vihear, after years of promising to resolve the disputes, have achieved next to nothing.
Poek Sophorn, of the NGO Ponlok Khmer, said authorities were failing both parties.
“They make excuses, and make promises in one way. Then they come again and make excuses and make promises in another way,” he said.
...
Mr. Sophorn, of Ponlok Khmer, said the government had initially leased the villagers’ land to the company, but then promised to give some back to the people living on it.
“We’ve seen their maps. The government has drawn it so the rice land of people in three districts is the company’s,” he said.
The fault wasn’t entirely the government’s, he added. Rui Feng was ostensibly required to do an environmental and social impact assessment evaluating how their investment would affect the local population.
“The government and the company joined together to violate human rights,” he said'.

Wednesday, January 4, 2017

Grow-ing

There's not much to feed back on: end of the year, end of the harvest syndrome? Or simply other news taking the limelight.

What is Grow Asia?

'Grow Asia is a multi-stakeholder partnership platform that catalyzes action on inclusive and sustainable agricultural development in South East Asia.
...
Established by the World Economic Forum in collaboration with the ASEAN Secretariat, Grow Asia brings together companies, governments, NGOs and other stakeholders to help smallholder farmers improve their production and livelihood through access to information, knowledge, markets and finance'.
Presently also active in Cambodia.
Despite the lofty goals Grow has come under recent criticism  from GRAIN (Dec. 15):
'The world's largest agribusiness corporations are rolling out a public-private partnership programme to take control of food and farming in the Global South'.
The article then seeks to underline the danger of this programme with many examples and draws this conclusion:
'It is important to see this programme for what it is: a mechanism for corporate control. For farmers and civil society, the challenge is to recognise and reject these kinds of schemes that do nothing to tackle hunger, poverty or climate change. The solution lies with the communities and movements putting forward a vision of food sovereignty based in local markets, agro-biodiversity and agroecology'.
On a personal note, I'm now reading Robert Reich's Saving Capitalism and I see the parallels between what he writes and what GRAIN is reporting on. 
Less and less is the playing field of economics, companies and you and me fair, even or equal. Less government has meant more large corporations who are using all their powers to distort the playing field to their own convenience. Grow seems simply another ploy to extend influence by and gain markets with little opportunity for alternatives.
 
Sharing
As said little news. The Khmer Times (Dec. 12) reports:
'Rice producers and exporters to the European Union must use a new kind of certificate of origin beginning January 1.
 “Producers or exporters who have been exporting rice to the EU are required to use a new type of Certificate of Origin for exports as the new online request has not been inserted into the ministry’s system,” a notice from the Commerce Ministry said'.
Sharing the blame. Phnom Penh Post (Dec. 20):
'Agriculture Minister Veng Sakhon yesterday defended his ministry amid complaints by farmers of low yields during dry season, rising costs of production and a lack of markets to sell their produce, saying that other ministries and sectors also shared responsibility'.
Fit
Cambodia's neighbours also have little to note. 
Despite all the hoopla in recent times about rice buy schemes, press attention has moved elsewhere with little tidbits to mention.

Bangkok Post (Dec. 14):
'The government is considering setting up a central market for milled rice as another distribution channel for rice traders and farmers'. 
And though increased opportunities mean a better performing market, it by no means addresses prices dropping. 
The Nation (Dec. 30):
'THAILAND is expected to export between 9.5 million and 10 million tonnes of rice next year, the same or slightly more than this year’s total of about 9.5 million tonnes, according to the Thai Rice Exporters Association'.
The Bangkok Post (Dec. 20):
'The government is committed to disposing all 8 million tonnes of state rice stocks next year. According to Duangporn Rodphaya, director-general of the Foreign Trade Department, most of the existing 8 million tonnes of rice stocks are white rice, and 5 million tonnes of the total is poor-quality grain unfit for human consumption'.
As Thailand struggles to sell it's crop, so too does it's major competitor, Vietnam. 
New strategies? Vietnamnet (15 Dec):
'The country should halve its rice exports from the normal 7-8 million tonnes until 2020 because of difficulties exporters face and falling production due to climate change, according to the Viet Nam Food Association'. 
Though in all honesty, the association seeks ways to halve the volume, but increase the returns. Not many new aspects though increasing salination of the Mekong delta is mentioned as a serious threat to maintaining current export volumes.
Impacting
Other agricultural news from the region. The Vientiane Times (Dec. 13) had an article entitled 
'What should be done to solve the impact of banana plantations on people's health and the environment?'
It's disappeared from the government run press site, but google has a couple of dead links; conclusion do nothing?

It did run a day later after this article (Vientiane Times, Dec. 12) which supposedly  refers to a ban on banana growing:
'Chinese farms in Laos' provinces have been suspended due to their ongoing use of hazardous chemicals which are having negative impacts on people's health and the environment.
The Prime Minister's Office's ordered the farms which are preparing to cultivate banana trees to cease their efforts while thousands of hectares of banana plantations which have already planted the trees will not be allowed to plant any more suckers after harvesting their crops'.
Whether or not this will mean a real end to Chinese managed banana plantations remains to be seen. For instance a ban on the export of logs has been in place for nearly 6 months, though it's hardly effective with lower authorities continuing their own export operations nonetheless (RFA, Dec. 7)

Rubber and Lao. The Vientiane Times (Dec. 10) notes:
'There haven't been widespread reports of farmers cutting down their rubber trees in Luang Namtha province, relevant officials have said, whereas two years ago the phenomenon did arise'.
Better times?
Finally the Bangkok Post (Dec. 8) with in depth coverage of their important sugar section:
'Unfavourable weather has delayed Thailand's sugar crushing season, threatening a reduction in sugar output for the 2016/17 crop.
The drop will prevent Thailand, the world's second largest sugar exporter, from capitalising on rising global sugar prices at a time it is being challenged by Brazil over subsidies to the Thai sugar industry, said industry officials.
...
In another development, Thailand is to overhaul its sugar production and distribution systems for the first time in more than three decades in order to avoid being challenged by Brazil, the world's biggest sugar producer, at the World Trade Organization.
...
Thailand will have to revoke its current 70:30 profit-sharing system, in place since 1984, which will require cancelling its quota system and floating domestic sugar prices. Brazil is challenging Thailand  over subsidies for sugar producers that it says have dragged down global prices and allow Thailand to win a larger market share at the expense of Brazilian producers, conduct that is not in line with international with international trade agreements. The 70:30 profit sharing system between sugar millers and cane growers provides monetary support from the Cane and Sugar Fund to sugar cane producers. The fund raises the money itself, largely from yearly sugar sales. When the fund does not have enough money, it seeks loans from the state-owned Bank for Agriculture and Agricultural Cooperatives'.
 So better news for consumers, less so for farmers ...