Sunday, May 1, 2016

Misguidance

It's been a while since I've highlighted hybrid rice as such, let alone the possibility of this growing in Cambodia. However it's the Asia Sentinel (Apr. 5) which tears into Cambodia's lack of political will to push the sector further:
'It may be only a matter of time before Cambodia’s rice industry disintegrates, partly as a result of a weak Cambodian Rice Federation and partly because of misguided government policies'.
It seems a pretty harsh critique, but the author of the article does seem to know what he's talking about. He then gives the following as evidence:
'The industry’s main players from the private sector must stand up to play a role in improving the industry in the face of a new problem. It has been reported that the Ministry of Agriculture has been testing a strain of low-quality but high-yield hybrid rice for export.  
...
There are two dangers in the government’s experience through the Ministry of Agriculture. As the industry runs through the testing process, without strict controls –which the government appears incapable of – hybrid pollens are certain to be spread rapidly kilometers away from the test zones, carried by the wind and insects or rodents.  Hybrid cultivation would very likely eradicate Cambodia’s high-quality Rumdoul and Sen Kra Ob varieties for good. Destruction of the native species from hybrids is likely.
Low-end hybrids recommended by the government would put Cambodia at a disadvantage to Vietnam. Our market positioning should be at the high end. Going along the hybrid route would simply spell disaster and if such news is true, it shows that our Agriculture Ministry policymakers do not fully comprehend the implications of such a policy blunder. Recommending the use of hybrid rice for Cambodia is wrong'.
Wrong it may be, but that's never stopped the establishment from pushing their own agenda.

Take for instance the Green Revolution which is yet to be continued and some would argue that this (the second Green Revolution staying away) is a plus for the globe's many small farmers.
However that's not going to stop the ambitions of for instance the IRRI. It has now (Apr. 7) got Green Super Rice (GSR) in the pipeline to address the future. The news item has suspicious little on detail. If one clicks on, one would discover that
'GSR varieties are a mix of more than 500 promising rice varieties and hybrids'.
Hmmm, there seems no stopping hybrid rice advocates.

Strengthening the struggle
One can't fail the Cambodian government for tinkering it's policies here and there. The Phnom Penh Post (Mar. 31):
'The government has decided to strengthen entry points along Cambodia’s borders to block illegal rice imports, while promising to dissolve any company’s certificate of origin that is caught mixing contraband rice for export, Cambodian Rice Federation (CRF) president Sok Puthyvuth announced following a meeting yesterday with Deputy Prime Minister Kheat Chhon.
Additionally, the government will scrap the value added tax (VAT) on imports of rice milling machinery – a move aimed at reducing millers’ high capital costs'.
The Cambodia Daily reports on the same but focuses more on the role of the VAT waiver. From Mekongoryza:
'The government decided to drop a 10 percent value added-tax (VAT) for rice products during a meeting on Wednesday between representatives of the rice sector and government officials at the Council for the Development of Cambodia in Phnom Penh, officials said.
...
Sam Arth Veasna, vice president of Federation of Cambodian Rice Farmer Organizations for Development, welcomed the government’s decision.
“Even though it is not a big offer, I think it would make farmers and rice millers feel better,” he said. “However, I cannot assess how much better.”
However bad news was on it's way, despite these measures being announced. The Phnom Penh Post (Apr. 6):
'After two promising months, Cambodia’s rice exports fell by 14 per cent year-on-year in March, according to new data by Ministry of Agriculture, sparking fears amongst rice millers that export shipments would further decline without adequate financial backing.
....
Rice millers said yesterday that the drop was evidence that the industry is struggling with the cost of production, high electricity bills and a lack of finance to purchase and store paddy rice.
...
While last Thursday the government agreed to cut the value added tax (VAT) on imports of rice milling machinery and step up border patrols to crack down on illegal rice imports, there has been no agreement on the facilitation of $250 million in soft loans to proposed by the CRISIS group to ease the financial burden on millers'.
Plans
The Bangkok Post (Mar. 31) reports on expectations that Thailand will be able export 9,5 million tonnes this year. Despite writing the government is upbeat, this target would represent less tonnage than last year and at a much lower value, at least so it looks like.

What's wisdom? The Thai government has announced a 60 day rice sell-off blitz? The Bangkok Post (Apr. 26):
'The government plans to sell all 11.4 million tonnes of rice in government stockpiles within two months for 100 billion baht, the country's rice management board, starting next week. The plan announced Monday is unprecedented in Thai export history - selling off more rice in two months than the country usually sells in a year. Average rice sales over the past couple of decades have been about 10 million tonnes. 
.... 
Traders were sceptical Monday about the government's ability to sell off remaining stocks in just two months. Supachai Vorraapinyaporn, president of Tanasan Rice Group, the third largest rice exporter, said the government's target of offloading the rice within two months was not possible. "This is a million percent impossible, considering that previous auctions were monthly, and only around 400,000 tonnes," said Mr Supachai. "Perhaps they meant two years, not two months," he added'.
Does the Thai government know something we don't? Surely prices are low. But what with El Niño in full swing one might expect less output from Southeast Asia and India, thus higher prices .... 
It does spell lower prices in the short term if it does indeed succeed in selling off virtually all their stock.

One to suffer will be Cambodia. The Khmer Times (Apr. 24):
'Cambodia Rice Federation (CRF) vice-president Hun Lak told Khmer Times yesterday the pledge by the Thai government to release so much milled stock so quickly would push the global price lower and have an indirect impact on Cambodian exports'.
But the junta has more bad news for it's farmers. The Bangkok Post reports (Apr. 22) on a communist approach by the junta to rice growing. 
'Commerce permanent secretary Chutima Bunyapraphasara said the area to be cultivated was set by a meeting of the committee planning for integrated rice cultivation.  
The Agriculture Ministry would announce the target zones for rice growing next week, along with planting dates'. 
It's unclear whether or not the junta will dictate the rains. But I assume that these will be just as difficult to line up, as will I believe the rice growing farmers. Will they outlaw rice growing outside these target areas? 
Another plan to show how incompetent the junta is.

Rebound
Another victim of El Niño is Thai sugar production. The Bangkok Post (Apr. 1):
'The El Nino weather phenomenon has played havoc with crops across Southeast Asia and beyond. Thailand, the world's second-largest sugar exporter, will ship 20% less of the sweetener to international markets this year than last, and farmers fear the damage already inflicted on young cane plants could make next year worse.
...
They are part of a growing number of rural Thais struggling with debt. Most are rice farmers, who were hit hard when the military seized power in 2014 and ended generous subsidies. The irony for some in Ratchaburi is that they have taken a double hit: They were encouraged to convert to sugar from rice as the government sought to cut subsidy reliance and reduce massive rice stocks. As epected prices will rise so not all bad news'.
Interestingly from Cambodia the report that palm sugar is going strong. The Phnom Penh Post (Apr. 1):
'Demand for Kampong Speu palm sugar has surged, with orders already up 70 per cent this year, as appetite for the premium organic sugar product grows, boosting its price.
Orders for 260 tonnes of the palm sugar have been placed this year, compared with 150 tonnes in all of last year, and despite its market price climbing to $1,400 per tonne, about $50 more than in 2015, Sam Saroeun, president of Kampong Speu Palm Sugar Promotion Association (KSPSPA), said yesterday.
The Lao authorities report on opportunities for cardamom growing. The Vientiane Times (Apr. 4):
'Many local farmers in Phongsaly province are shifting to plant cardamom after earning lucrative income from growing this crop and selling it to Chinese traders.
...
However most villagers are very concerned about the fluctuation of the cardamom market, particularly when more people move to grow this crop as the prices might go down.
A painful lesson has been learned by farmers who grew rubber and falling princes of rubber led farmers in many provinces of Laos to lose profits while some had to resort to destroying their trees to grow other crops instead'.
Meanwhile banana farmers are fearing worse. Vientiane Times (Apr. 20):
'According to a recent report in the Chiang Rai Times , workers at Hongta International, a Chinese-owned banana plantation in Chiang Rai province's Phraya MengRai district, have been tested and found to have unusually high levels of chemicals in their blood.
The Chinese firm leased about 440 hectares of land in Phraya MengRai district to grow Cavendish bananas before the PhayaMengRai Hospital was assigned to conduct blood tests on 43 of the plantation's 200 workers.
The test results showed the health of 10 of the workers' was at risk, while 13 already had unsafe contamination levels. 
...
A survey undertaken by NAFRI [National Agriculture and Forestry Research Institute] and unveiled on March 31 noted there were several reasons why Chinese companies wanted to establish banana plantations in Laos. One was the low cost of land leases, the second was low labour costs, and the third was the lax control of chemical use'. 
More positive news this time for rubber growers. The Phnom Penh Post (Apr. 29):
'A sharp rebound in international rubber prices has put workers at plantations in Cambodian back to work, and has infused the sector with a rare sense of optimism.
International rubber prices began rising in March from seven-year lows and have seen an upswing of 16 per cent since the start of April on concerns over output and expected pickup in demand from China'.
Finally, a short note from Thailand as to what they think about the possible TPP. The  Bangkok Post (Apr. 28):
'Farmers nationwide have threatened to organise protests against the government if it decides Thailand should take part in the Trans-Pacific Partnership (TPP) agreement'.

Monday, March 21, 2016

Alarm

As could be expected rice prices dropping tend to affect the rice industry itself rather than farmers directly. At least initially. And the current slump in prices is no difference, not in Cambodia.:

Disturbing news. Phnom Penh Post gives voices to the not so satisfied rice industry (Mar. 3):
'A newly formed coalition of rice millers and exporters has raised alarm bells, forecasting the imminent “collapse” of the nation’s rice sector within two years and blaming in part “governance failure” by the industry’s apex body'.
Infighting?
Not for long though. The Cambodian Rice Federation has got the message (Phnom Penh Post, Mar. 10):
'Responding to criticism, Cambodia’s apex rice industry body announced yesterday that it would submit a plan to Prime Minister Hun Sen that addresses two of the major challenges facing the Kingdom’s rice sector – competition from rice imports and access to finance for millers.
The Cambodia Rice Federation (CRF), which has come under fire from members critical of the direction in which the nation’s rice industry is being steered, will ask the government to make it mandatory for rice importers to have licences, and ask for its help in facilitating low-interest loans for millers, the federation revealed at a press conference yesterday'.
The Khmertimes (Mar. 17) has a similar article on the problems the Cambodian Rice Federation will put to the government:
'Two main issues will be put to the government when it holds an urgent meeting with the Cambodia Rice Federation (CRF) next week – a special fund package to help millers and exporters and a ban on imported rice from neighboring countries.
...
The special meeting was set up after complaints from the CRF outlined problems with a lack of funds to support production, imported rice from neighboring countries, the high cost of production, the high cost of logistics, the high cost of electricity, a lack of water, finding good seed stock, a lack of farm labor due to immigration and limited infrastructure and port storage facilities. The CRF claims that about 40 percent of the small- and medium-sized rice millers and exporters are close to stopping production and going bankrupt'.
The response of the government (Phnom Penh Post, Mar. 18):
'The Commerce Ministry has created a special taskforce to study challenges threatening the sustainability of the nation’s rice industry and will report its findings within two weeks, a ministry official said yesterday'.
Let's see what the government can come up with ...

Piloting
Besides the above (the main newsworthy items on rice production in Cambodia) what else topical has made the press? 
 
The Phnom Penh Post (Mar. 1) looks at the findings of an insurance programme on rice crops:
'A pilot project that offers micro-insurance to help rice farmers cope with the risks of flooding and drought is looking to build on the success of its first season by scaling up beyond three existing provinces. The Cambodia Micro Agriculture Insurance Scheme (CAMAIS), launched in the second half of 2015, aims to support local smallholder farmers by providing insurance payouts to those affected by severe weather-related events attributed to climate change. Rice farmers who join the scheme pay an insurance fee at the start of the growing season based on the size of their farm, type of paddy grown and technical tools used. In return, they receive consultation on farming techniques and get an insurance payout if their crop is damaged either by flood or drought.
...
According to Youssey [project manager of CAMAIS], 153 agricultural families joined the micro-insurance scheme during its first season, paying a total premium of $1,230 to insure 136 hectares of rice farms. At the end of the season, roughly 80 per cent of this collected capital was used to settle farmers’ claims, with the rest used to cover operational expenses and commissions for agents.
Around half of the rice farmers that purchased the crop insurance made compensation claims based on varying amounts of crop damage; however, only 52 of these claims met the criteria for receiving compensation, Youssey said'.
A lesson for all.

The Phnom Penh Post (Mar. 1) looks at the business of groundwater pumping. It's an increasing practice, exacerbating problems now the rains have been so poor.
'Extensive groundwater irrigation jeopardises access for shallow domestic water supply wells, raises the costs of pumping for all groundwater users, and may exacerbate arsenic contamination and land subsidence that are already widespread hazards in the regio, ...'.
On a sideline the Bangkok Post (Mar. 2) has one answer to the Thailand's water shortages: include local say of water management. 
 
Tractor politics as presented by Phnom Penh Post (Mar. 16):
'Local tractor dealers have reported strong sales of new equipment. Ngorn Saing, CEO for RMA (Cambodia) Co Ltd, exclusive local distributor of John Deere tractors, said his company sold about 300 tractors last year, a 30 per cent year-on-year increase. He projects similar growth in the coming year as farmers increasingly turn to mechanised farm help'.
Much is made of how tractors are assisting rice production. However it's probably cassava growing that's really pushing the sales. After all besides harvesting, there's very little use for tractors in small rice fields.

Sparks
Italians are afraid that Vietnamese interests will seek to grow and export rice from Cambodia bound for Europe using Cambodia's easy (and less costlier) access to the EU (Risoitaliano, Mar. 19). 
The article somehow makes a connection with what's coming from the Vietnamese press. Vietnamnetbridge (Mar. 10):
'However, Cambodian exporters can sell rice to the European market. The EU is the biggest consumer of Cambodian rice.
Why can Cambodia sell rice to the EU, while Vietnam, the second largest rice exporter in the world, cannot?
According to the Commercial Affairs Division of the Vietnamese Embassy in Cambodia, Cambodian businessmen can export rice to the EU because they can enjoy preferences'.
That said, the same source, 4 days later, warns of the threat posed by Cambodia as it gets better access to China. Though hardly having an impact on Vietnam's ability to export. So maybe not such a good source of info ...

The Mekongcommons (Mar. 17) has an extensive article on organic rice farmers in Surin, Thailand. Touching on the System of Rice Intensification and coping with climate change, it's a very read worthy article on pressures faced by rice farmers in the region and how to cope with these pressures.

The Bangkok Post (Feb. 27) notes that the recent auctions of rice are doing well.

And again, the Bangkok Post (Mar. 11) looks at the government programme of weaning Thai farmers off rice:
'Ms Prapatpon, 48, returned to school last month for a state-funded training programme designed to wean farmers off water-intensive rice and teach them how to grow other crops.
....
Going back to school was meant to give farmer ms Prapatpon fresh ideas and new strategies for survival on her farm in Chai Nat province. Instead, she said: "I can't apply any of this."
....
For farmer-turned-student Chaiyapoj Phak-on, the past two years have been a harsh contrast to the heady days of the previous government's income-propping rice-buying programme, which he called "the best time of my life." 
As usual there's more to be reported on politics and rice growing in Thailand. The Thai junta is in favour of an open society. As long as it toes the junta's line. From the Asian Correspondent (Feb. 24), this is the full article:
'THAI Prime Minister and junta head Prayuth Chan-ocha lost his temper at a Reuters journalist at Government House today, apparently over the news agency’s recent interview with former Thai Prime Minister Thaksin Shinawatra.
The reporter asked Prayuth about the cost of the damage of the rice-pledging scheme, which was implemented by the previous government under ousted Prime Minister Yingluck Shinawatra – Thaksin’s sister.
Prayuth said the number had not been finalized yet and would be announced later.
Then sparks flew.
“Why? You really want it now? You must tell Reuters to say [write] better yesterday [Tuesday],” he snapped, according to The Nation.
He then abruptly left the podium for his upstairs office'.
In similar vein: trying the tried. The Bangkok Post (Feb. 26) has a wide article exploring all what's wrong with Thai agriculture and trying to put the blame with one person. 
Oddly it's the Thai Rice Exporters Association which is assisting with the accusations that the previous government sold rice to China at lower prices than pledged, then stocked the rice and re-pledged it again to itself. 
Surely those accountable would be brought to court, why than use it to blame just one person?

Something different. Riceberry? That's the name given to (mostly organic) dark rice. Thailand rice exporters:
'Rice Berry is a cross-bred unmilled rice possessing dark violet grain, which is a combination of Hom Nin Rice, with well-known antioxidant properties, and Thai Hom Mali Rice, also known as Thai Jasmine/ Fragrant Rice or KhaoDawk Mali 105. Rice Berry contains three times more iron than other varieties. And not only does it contain a high level of antioxidants such as beta-carotene, gamma oryzanol, vitamin E and folic acid (folate) in itself, it also becomes soft and is aromatic when itโ€™s cooked, which is the outstanding trait of Thai Hom Mali Rice'. 
The Bangkok Post (Mar. 1) has a recent vdo on growing and market possibilities of riceberry. 

Silde
It may be marginal news, but it's impacts are to be huge. We are talking about the Regional Comprehensive Economic Partnership (RCEP).
What is the RCEP?  It supposed to be Asia's answer to the US-lead TPP. Does it serve the interests of Asian farmers? Grain.org (Mar. 17):
'Hot on the heels of the TPP, it is clear that RCEP will restrict seed saving and seed exchange at a time when, under the extreme pressures of climate change, farmers need more diversity in their fields, not less. Furthermore, it could increase their dependence on external inputs and raise their costs of production. Opponents of RCEP say that the trade deal could triple the current price for seeds.[iii] Trade agreements like RCEP should not give corporations monopoly rights over seeds, prevent farmers from saving seeds or promote GMOs—but that is what they do. These agreements are inherently biased towards the interests of corporate and political elites'.
That does not bode well for the future of small and sustainable (rice) farmers in the region.

Sam Mohanty on IRRI.org discusses rice prices and the dwindling of global rice stocks (Feb. 22):
'Despite the current stability in the rice market, there are reasons for concern about the direction of the market in the medium term (mid- to late 2016). The rice stocks of five major exporters (India, Thailand, Vietnam, Pakistan, and the United States) continue to slide since reaching a peak of nearly 41 million tons in 2013 (Fig. 1). According to USDA data, the biggest drawdown of stocks in these countries is underway this year, with a 40% drop from last year, to reach 19 million tons by late 2016'. 
A lot of this stock selling has come from Thailand which, in hindsight, has been providing the global market with a hoard of rice enabling prices to stabilize: public goods used for the good of the public. 
Naturally, the Thai government has seen little return on their stocks and it could be expected that they would dwindle away. Has any other entity stepped forward to possibly avert a rice price explosion? No. 
He concludes:
'With limited Thai rice stocks in the warehouse, it remains to be seen how major exporting and importing countries react to such uncertainty [causes of climate change and/or El Niño]'. 
One worrying impact for the immediate future: farmers in Southeast Asia will not be able to step up to the plate if prices rise due to drought. The lack of water impedes any potential to expand production.
So what about farmers elsewhere? 
But looking at this in the longer term, things look better than before the 2007 rice price explosion. The market is not dictated by Thailand (Vietnam and India have a substantial role), there are more upcoming exporters (Cambodia / Burma) and major importing nations such as Indonesia and the Philippines have better domestic responses.

Cuts
Phnom Penh Post (Mar. 15) has been tallying sugar exports and reveals that in line with expectations, Cambodia's exports to Europe will disappear:
'New figures show that Cambodia’s sugar exports to the European Union fell by 94.8 per cent between 2013 and 2015, amid accusations of rights abuses and land grabbing in the Kingdom’s industry.
...
Meanwhile, Am Sokha, case coordinator at the Community Legal Education Centre, which is also a member of the NGO coalition, said the trade decline sent a clear message to the Cambodian industry to clean up its act'.  
On the plus side. The drought in Southeast Asia is pushing global sugar prices higher (Bangkok Post, Mar. 10). That said with the drought there's little opportunity to raise output to take advantage of higher prices.

The Bangkok Post (Feb. 29) on rubber: 
'Thailand is seeking to boost sales after prices tumbled to an almost seven year low in January as slowing economic growth in China weakened demand from the biggest consumer. Along with Indonesia and Malaysia, Thailand agreed this month to cut shipments of natural rubber. Thailand has also agreed to buy rubber from growers at above-market prices'.
So with this concerted effort to protect rubber producers, it comes as no wonder that rubber exporters in Cambodia also receive assistance. 
Wrong.
The Phnom Penh Post (Mar. 7):
'Rubber producers said yesterday the government’s decision to amend the export tax scheme on natural rubber fell short of expectations and would do little to stem the losses of farmers as rubber prices hover near a six-year low'. 
At current prices, the tax amounts to a 5% levy, thus leading to pricing out of Cambodia's market.

Worse as reports the Phnom Penh Post (Mar. 17): 
'Cambodia's rubber industry’s woes have begun to crystallise after two major rubber plantations announced deep losses yesterday, attributing their downturn to high production costs and a drop in global rubber prices'.
In the meantime the past measures announced by Thailand seem at least in the short term to have pushed prices up, so reports the Bangkok Post (Mar.  7). However the short term gains may well lead to long term losses.

Cassava is leading the way. The Phnom Penh Post (Feb. 23):
'The tonnage of Cambodia’s agricultural exports increased by over 20 per cent last year, led by a surge in shipments of dried cassava chips, according to the latest Ministry of Agriculture data.
Total exports of 66 raw and semi-processed agricultural products – chiefly cassava, rice and rubber – amounted to 4.1 million tonnes in 2015, compared to 48 products with a total of 3.4 million tonnes a year earlier, the ministry said in its annual report on agricultural production.
...
Hun Ly Heu, director of cassava-exporting firm Drycorpkh Cambodia Co Ltd, said the fact that more farmers were selling their cassava despite falling prices was a sign of their desperation.
“Our market depends on orders from neighbouring countries and farmers could not wait for cassava prices to rebound due to their loan commitments,” he said, calling for the government to support farmers by setting a price floor on agricultural products'.
Bust to boom
Land politics in Laos: the case gone banana's. From the Southeast Asian Globe (Feb. 10) which reports on the province of Bokeo: 
'“The Chinese are renting 1,600 square metres of land for the equivalent of between $300 to $600 per year, which is roughly what the farmers would earn from this area if they cultivate the land. So they get the same amount but don’t have to work,” says Sompavong.
However, such deals always have their negative sides. For instance, the concession contracts usually do not specify that the investor has to clean up the land – often rice paddies – and return it to its previous condition after the contract ends'. 
However it's the accompanying massive use of pesticides which is proving a headache.
'Then, at the end of September, the Ministry of Agriculture and Forests warned four Chinese companies for “excessive use of pesticides” and ordered inspections on the types and amounts of chemicals used at some of the banana plantations. The revocation of business licences was threatened if laws continued to be contravened'.
This comes hot on the heels of another China induced crisis in northern Laos: that concerning rubber plantations. These plantations mostly seem to be a proxy for China land acquisition. 
Now with rubber prices hardly worth tapping the trees, banana's are seen as the way forward. But at the same unfair economical advantages such as buyers monopolizing the crop (as the crop can only get imported to China) local government collusion, etc. 
A good starter on what's wrong in the north of Laos needs heed and read the recent study Falling Rubber Prices in Northern Laos: Local Responses and Policy Options.

Wednesday, February 24, 2016

Obsession

Not excessively much to share this update. And less so on regional rice issues.

The main news on the globe's hybrid news is an issue which touches on hybrid rice currently but certainly is setting the scene for the future of hybridisation and development of GMO's.

The issue is of course China's ChemChina intent to purchase Syngenta for a substantial sum, one shareholders can not refuse apparently. 
Syngenta itself has hedged a bet on hybrid rice (Devgen) and is also known for promoting seed coating chemicals in combination with hybrid rice (source). 
Oddly, Syngenta is at the heart of a trade dispute with China as for 3 years large imports to China of GM corn were undertaken without the granting of a no  objection of the GM source (source). Which ultimately meant that this trade fell away for US farmers.

Not quite unsurprisingly, there's now even a counter bid (lead by Monsanto), as the U.S. don't feel comfortable with selling of technologies to China ... (source).

Wired.com (Feb. 18) has an article on this proposed takeover.
'Food security is a national obsession [for China] —so it only seemed natural when, earlier this month, state-owned ChemChina announced its bid to buy the pesticide- and seed-producing giant Syngenta, in what is likely to be the biggest acquisition in the country’s history. Technology, the Party seemed to say, and especially genetically modified crops, are the key to a sustainable future.
There’s just one problem: Most Chinese hate GMOs.
...
And while China will bar Syngenta from bringing GM crops to market in the country, the company will very quickly be able to sell things like hybrid rice strains'.
Let's continue in this vein. 
While hybrid rice was hailed as the forefront of the new green revolution, the reality has been that the returns (to farmers and consumers) are few and far between. 
But not to worry, the second green revolution has yet again finally arrived. Genome sequencing technology is apparently all the rage. ThBangkok Post (Feb. 15) has an article pinning on revolutionary hopes:
'With the huge pool of data unlocked, rice breeders will soon be able to produce higher-yielding varieties much more quickly and under increasingly stressful conditions, scientists involved with the project told AFP.
Other potential new varieties being dreamt about are ones that are resistant to certain pests and diseases, or types that pack more nutrients and vitamins'.
Now, there are only marginal gains to be made by this. These gains are mostly in the conventional breeding such that it may enable breeders to breed varieties more adaptable to changing climate conditions and / or variations in disease control. 
But it's certainly far from the hailed second green revolution and has little to offer in terms of food security where government controlled storage is the best option to maintain market control.

Then let's finalise the rice news with this.  
Bangkok Post (Feb. 1) mentions how rice prices going down are a ticking time bomb. Basically it's part of an act to scandalise the previous democratic government as it's rice pledging scheme failed to add up. But nowhere near a ticking time-bomb. Pity this comparison.

Granted
Then it's time to look at the other crops of Cambodia section. 
Pepper retains it's allure to farmers and things are looking good with crop section development and cooperation. This  by Phnom Penh Post (Feb. 20):
'The European Union has officially entered the name “Kampot pepper” into its register of protected designations of origin and protected geographical indicators, the EU’s official gazette reported this week'.
Odd news from the Cambodian sugar front. 
After past large scale efforts to set up an industry with export sights set on Europe turned sour, an inauguration will take place of a new project. This time backed by Chinese investment and focusing on ... exporting to the EU. 
So reports the Phnom Penh Post (Feb. 4). The supposedly massive project has also more similarities with prior efforts to set up a Cambodian sugar industry:
'The government granted Rui Feng a 8841-hectare ELC in 2011 for the cultivation of sugarcane, rubber and acacia. The total land area was subsequently trimmed by about 1,000 hectares in an effort to settle disputes with those living on the land.
The company has faced ongoing protests from villagers and indigenous hill tribes, who accuse it of land-grabbing.
The adjacent ELCs are owned by Rui Feng’s sister companies, Lan Feng, Heng You, Heng Rui and Heng Nong. Collectively the Chinese-owned companies hold five separate ELC licenses covering a total of 40,000 hectares, effectively circumventing legislation that prohibits a single company from holding more than 10,000 hectares'.
Despite open markets all the rage and tariffs going to zero, it's especially non-tariffs that are making trading difficult. The Phnom Penh Post (Feb. 20) remarks this on cassava:
'... Thai authorities have replaced tariffs with a raft of non-tariff barriers aimed at stemming the flow of Cambodian-grown cassava across the border by notching up its shipping costs to discourage trade. In recent months, Thai border officials have shown a conspicuous zeal in enforcing weight restrictions on cassava-laden trucks.
....
Thai border officials have honed in on another obscure regulation, measuring the quality and moisture content of the cassava cargo'.

Saturday, January 30, 2016

Helpful clarification

I would have wanted to start this blog off with a look into all the possible GMO interventions which, increasingly, are becoming more like traditional crop improvement but just a little faster in it's outcome. It certainly is obscuring the discussion. But there's not really that much out there to give an informed answer to this.

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.

Ignore
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.
...
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'.
As always the problems facing exporting of Cambodia rice are limitless.  
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'.
In the same vein, the Khmer Times (Jan. 19) reveals that the Cambodia will actually focus on exporting agricultural produce:
'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'.
No irony is lost on the government's role, as it has actually been hindering exports ... Continuing:
'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'.
What about the CRF itself? The Phnom Penh Post (PPP) on Jan. 13:
'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'.
Again a case of trying to control the market. Better would be an export board which focuses solely on exporting the product.

A side no
te 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'.
With very few alternatives given.

Organic rice news. The PPP (Dec. 30):
'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'.
From the VoA (Jan. 26) this revealing article on the state of ignorance on organics:
'Cambodian agricultural experts are suggesting a national standard for organic products.
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?”
Finally some investment news. The Khmer Times (Jan. 2):
'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'.
Also reported by the PPP: 
'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'.
Weather
Reuters (Dec. 25) expresses it's doubts on the Thai policy of emptying their warehouses a.s.a.p.:
'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."
One way Thailand hopes to sell more is through government channels (Bangkok Post, Jan. 6):
'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'.
And despite this plan, I doubt it will work, as individual farmers will not participate ...
 

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 ....

Plans
Some more rice (trade) news from the region. 
The Vientiane Times (Jan 22) notes private initiatives:
'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.
It produced 2.70 million tons of rice in 2012, 10,000 tons short of the official goal, according to official figures'.
Only 10,000? How is that newsworthy?
The wish list of Vietnam's government (vietnam.net, Jan. 12):
'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'. 
And what if the plan economy does not exist anymore?
Vietnam is worried about Thailand's bargain sale. Of course. Vientnam.net (Jan. 21):
'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'.
An interesting article from Anatara (Jan. 16) on how Indonesia uses imported rice solely to cushion domestic price increases and to use in case of potential domestic shortfalls in production. Wonder why this is not done on a global scale ...

Reverse gear
In the past we have looked at some of problems rubber farmers in especially Thailand have met with and how they would like to see their problems resolved. 
And their problems are the low and lessening prices with little prospect for a change
Farmers look to the government to resolve their problem. The government (read junta) want to look strong and thus not willing to oblige.

Let's start with a background article from the Bangkok Post (Dec. 30) on the rubber glut:
'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."
Then the Bangkok Post (Jan. 7):
'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'.
Some of the demands by farmers were becoming political.

The Natio
n continues (Jan. 8):
'Rubber farmers in Trang province are threatening to go on a hunger strike if the government continues to ignore their plight'.
Their other solution is to ban rubber tapping and compensate the tappers.  
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'. 
Interesting to read in the comments that the government in the past (as recent as 2010) had put money down to encourage farmers to grow more rubber ....

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.

T
he 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'.
And now farmers have reportedly given the government 1 month stay, otherwise they will protest as promised.

Bangkok Post (Jan. 14) notes that the government will pay 45 Thai Baht a kg.
'The announcement drew lukewarm responses from some farmers' groups'.
The Nation reports likewise. 

The Nation (Jan. 14) also has more details on the deal for rubber farmers: 
'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'.
More info from Bangkok Post (Jan. 15). A comment to the article: 
'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'.
Totally unexpected (not), the Nation notes (Jan. 17) that the Pheu Thai party criticizes the government for leaving rice farmers (their voter base) in the doldrums, while rushing to save the rubber farmers.

Bangkok Post (Jan. 20) reports that landless rubber farmers also want aid. Of course. Apparently there are only 2 million landless rubber farmers. It's only logical to know that these farmers will be the first to suffer and carry the brunt of lower pricing and halt on collection.

Profiteering 
Wrapping up this blog entry with some miscellaneous articles from the region.
 
The Philippines based Businessworld online (Jan. 22) has news from SL Agritech, the country's premier hybrid rice company. It wants to go public and is talking up it's prospects.
'“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 ...

An opinion piece in the Bangkok Post (Dec. 27) concerning the GMO revolt in Thailand. It basically describes the alternative government approach:
'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 confederation seems a near fascist approach to PR the government.

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. 
...
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'.
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.