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Outdated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on Sunday that slowing growth in Cambodian milled rice exports—increasing just 0.7 percent last year—was the result of outdated policies and was a concerning trend.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 ...

Saturday, December 3, 2016

Easing

To start this issue I would like to draw your attention to an otherwise marginal article, if it weren't for the conclusions it draws.

Looking at how Nobel prize winners were drawn into declaring their support for genetically modified organisms the oneworld (Nov. 7) article's author comes to some revealing disclosures. 
Though this saga has been highlighted earlier on this site, let's start with part of the article's intro:
'In June this year it hit the newspaper headlines. More than a hundred Nobel laureates call upon Greenpeace to immediately cease their resistance to genetic modification (GM). In specific the environmental organization was blasted for it's campaign against so-called “Golden Rice”, a genetically engineered rice variety 
...
Regulatory barriers for GM-technology should therefore be eased, the letter urges, and calls on “governments of the world“ to make this happen'.
The article reveals 
  • That Greenpeace does not "frustrate" the work of IRRI on Golden Rice,
  • that Greenpeace were not allowed to defend themselves at a press conference in Washington D.C., being refused entry by a representative of a PR firm who was formerly head of Monsanto's corporate communication,
  • the same person also provided public affairs guidance to the Nobel winners,
  • the same representative is a fixer between industry and scientists which seek to discredit organic food industry,
  • with this in mind there is apparently a target list of well-known / influential GMO doubters,
  • that the leader of Nobel Laureates efforts in this cause has a private stake in allowing wider acceptance of GMO's. 
It just proves to what lengths corporations are willing to go to reap higher returns where whatever the truth may be is lost. Here one sees how a simple rice related issue is part of a strategy to avoid questions and possible consequences, all for a greater greed. A lot has been said about the ability of internet to withhold truth and act as an echo chamber. Blatantly shouter louder than those who seek a more balanced picture seems to be all the rage.
The Guardian (Nov. 30) has a similar article but then on the bigger picture.

Cambodia
Main news from Cambodia is it's unsuccessful bid to become World's Best Rice; apparently the competition has decided not to be upstaged by Cambodia. The Phnom Penh Post (Nov. 21):
'Cambodia's Phka Rumdoul variety of fragrant rice, which won the World’s Best Rice award for three consecutive years from 2012 to 2014, narrowly missed its fourth crown at this year’s awards held in Chiang Mai in northern Thailand last week'.
Other news from the Kingdom's rice scene. Main point is of course the decreasing  price for the fresh harvest.
Solving problems the Khmer way. CNV.org (Nov. 22):
'To prevent the falling rice prices, Samdech Techo Hun Sen called on the farmers to keep and dry up their rice yields well, and sought understanding from the microfinance institutions that have provided loans to farmers, stressing that not only Cambodia, but other countries in the region and the world have been facing with this low rice prices'.
The VoA (Nov. 24) worded roughly the same:
'Prime Minister Hun Sen on Monday urged Cambodian farmers to put off sales of rice due to recent falls in the commodity’s price on international markets'.
Well, I doubt this will have any effect, bills need to be paid and who says that prices will rise in the (near) future? 
Sectoral news, one wold say in the same vein. The Phnom Penh Post (Nov. 25):
'It has been over two months since the government made available a $27 million emergency loan package to the beleaguered rice sector, yet only 5 percent of the funds have been disbursed.
Officials from the state-owned bank in charge of issuing the loans claim the low figure is proof that rice millers’ claims of facing imminent bankruptcy were overblown, while rice industry players charge it is because the lending comes with onerous strings attached.
...
Yang Phirom, a business advisor for Cambodian Centre for Study and Development in Agriculture (CEDAC), said that the RDB’s 7 percent annual interest rate was too high.
“Based on our observations, the interest rate of loan from the RDB is still high compared to other countries that are offering lower interest rates,” he said. “Most of the rice millers would not dare to apply for the government’s loans as they are not confident that they will be able to pay them back.”
Additionally, he said that the sector was still faced with large quantities of illicit milled rice coming in from Vietnam, while paddy rice was going out, skewing Cambodia’s rice prices and its ability to compete even domestically.
“These challenges still have not been addressed,” Phirom said'.
It sort of underlines how the Khmer government has little power to persuade the market whichever way it's being directed. The growth of Cambodia's export market has been mostly due to higher prices and little competition from Thailand with private companies behind the driving wheel. 
In a buyers market with depressing prices, Cambodia's produce is simply not competitive enough with the same private monies opting for better opportunities elsewhere.

There's more to note on this issue. The Phnom Penh Post (Dec. 1):
'Frustrated with the failure of a $27 million emergency loan package to help rice farmers find a fair market price for their crop and stem the tide of smuggled paddy across the borders, Agriculture Minister Veng Sokhon is flogging a new model for the nation’s restive rice farmers: contract rice farming'. 
Overall, contract farming has it's merits but with decreasing prices, there's usually little appetite with traders and millers; after all lower prices mean an oversupply in the market which consequently results in millers less eager to purchase harvests, let alone put them in stick; unless they were able to negotiate prices lower or equal to harvest value. On the other hand with prices rising, farmers will feel outdone as they had previously negotiated a price which seemed realistic at the time, but at the time of sale itself they will observe that traders are making an easy profit.
The examples highlighted were all of either limited impact or niche products where prices tend to not follow market prices as much as the mainstream products.

Even more marginal comes this bit of rice news from the Phnom Penh Post (Nov. 7). Tedious at the least:
'The government is seeking funding to complete its effort to draft standards for 11 local varieties of rice as part of an initiative aimed at facilitating efforts to market Cambodia’s most important agricultural crop, a government official said yesterday.
Chheng Uddara, a department director at the Institute of Standards of Cambodia (ISC), said standards for eight varieties have been drafted with the financial support of the multi-donor Trade Development Support Program (TDSP), but the funding only covers about half of the development process'.
Rhetoric
There's lots to report from Thailand as saving the rice farmers (or at least the notion of saving) has propelled the ingrained instability of rice market to the forefront. Prior apologies for the what has turned out to be a seemingly never ending list of links and quotes ...

Same same. The main problem are prices dropping just before the majority of Thailand's rice harvest.

Though rice prices are very much dependent on the world market, in Thailand much effort is wasted on the blame game.
Bangkok Post (Nov. 4):
'Some 30 executive committee members of the Thai Rice Millers Association have stepped down amid criticism that rice millers are behind the recent slump in rice prices.
...
Prime Minister Prayut Chan-o-cha earlier blamed rice mill operators and some local politicians for manipulating rice prices, causing the price plunge'.
Bangkok Post (Nov. 8):
'While the government and farming industry have blamed each other for the sharp drop in rice prices, a leading economist says the tumbling prices, particularly for premium fragrant rice, stem from diverse factors'
 Solutions to the price drops? The Bangkok Post on November 3:
'Major Thai oil and gas companies have jointly launched rice-selling programmes to help farmers who are struggling with low rice prices due to oversupply'.
Bangkok Post (Nov. 6):
'People have responded warmly to the farmer-to-consumer rice markets popping up all over the country, with at least two provinces reporting brisk sales on the first day'.
Bangkok Post (Nov. 14):
'Almost 300 buyers from 41 countries have been brought together with sellers of Thai rice and cassava, and their processed products, at a four-day meeting the Commerce Ministry hopes will generate 63 billion baht in sales'.
Bangkok Post (Nov. 15):
'Thai exporters yesterday signed five memorandums of understanding (MoUs) for a combined 11,000 tonnes of rice and 800,000 tonnes of tapioca chips with Hong Kong buyers at a business matching event organised by the Commerce Ministry'.
But these of course will never dent the price drop. So the next thing coming up is to cool potential hotheads. 

The Bangkok Post on November 4:
'The government's scheme (above) to delay releasing 10 million tonnes of new rice supply to the market, aimed at propping up sinking prices, will use a combined 127 billion baht in loans and subsidies, says the chief of the Bank of Agriculture and Agricultural Cooperatives (BAAC)'.
Bangkok Post (Nov. 6):
'Prime Minister Prayut Chan-o-cha has called an urgent meeting with the National Rice Policy Committee to draw up relief measures for rice farmers before a new supply of grains hits the market this month.
...
A source at the Agriculture and Agricultural Cooperatives Ministry said the meeting was prompted by the death of a Phichit rice farmer who allegedly committed suicide due to stress over heavy debts.
...
The spokesman declined to respond to Pheu Thai politicians' criticism of the government's handling of the rice price fall, saying Gen Prayut urged restraint to avoid friction and told concerned authorities to focus on addressing the problems'.
 The Bangkok Post on November 8:
'The National Rice Policy Committee agreed on Monday to launch a new subsidy scheme worth 18 billion baht to aid struggling farmers amid plunging rice prices'.
But it doesn't seem enough. The Bangkok Post (Nov. 10):
'The regime's responses to plummeting rice prices have been both disappointing and disastrous to it and farmers. The worst came from government spokesman, Lt Gen Sansern Kaewkamnerd, who said a 43-year-old farmer in Phichit, who committed suicide because of debt caused by the price crisis, "was not a farmer, but an air-conditioner mechanic". It was a knee-jerk, unchecked and heartless response.
...
It is obvious that Gen Prayut is taking cautious steps in implementing his subsidy scheme, which is, for many people, a model copied and pasted from many previous governments, including the Yingluck Shinawatra administration, and repackaged under a new brand. 
...
Amid the crisis, the regime was still critical of Ms Yingluck's "publicity stunt" of buying rice during meetings with farmers last week. Gen Prayut urged politicians to "stop exploiting the plight of farmers for political motives'.
Bangkok Post (Nov. 12):
'The free-fall in rice prices has sent an economic and political jolt across the country, and in the process highlighted how "thinking small" and modest-scale farming just might hold the key to the survival of farmers. The depressed rice prices, coupled with a growing demand for organic farm products, are driving the chemical-free rice sector and earning these growers more income'.
It's an interesting article which highlights how growing for the masses is past-tense; niche marketing is the future.

The Bangkok Post (Nov. 13) notes:
'Rice farmers have begged the government for help as their stockpiles, which were not bought last year because of oversupply, are backing up and leaving no room for this year's looming harvest. 
...
Mr Nga urged the government to find ways to help farmers release their stockpiles so they can free-up space for this year's harvest. In tambon Muang Leang, 73 of 157 households joined the storage-pledging scheme for the 2015 harvesting season carried out by the Bank for Agriculture and Agricultural Cooperatives'.
What also highlights on the political importance of saving the rice farmers are the Bangkok Post opinions and editorials such as follows from November 6:
'In the early 1980s, as a post-Vietnam war peace took shape in Southeast Asia, Thailand made an important decision. To be more correct, Thailand decided not to decide about rice. 
In purely logical terms, a la Mr Spock, it was time to shift the back-breaking burden of rice growing to poorer neighbours in order to move the economy along to modern development including advanced agriculture.
...
The root cause is worldwide overproduction of rice. This is especially true and especially important in Thailand, the world's leading rice salesman.
But the government for completely understandable political and populist reasons wants to ignore the "worldwide" part. If there is a world glut of rice, there's no way to blame profiteering rice millers and merchants.
...
For the second time since the coup that sought to extinguish populism forever, Prime Minister Prayut Chan-o-cha had to reach into the government's money bags to address serious poverty among farmers.
Like the problem with rubber growers, the premier really has no choice but a populist programme with two so-familiar aims: bail out the farmers in the short term and try to control the market in the long.
...
Gen Prayut now is equally confident that if he locks up rice stocks -- new rice, at that -- the artificial shortage will raise prices. His contradiction, arguably even bigger than the Pheu Thai dichotomy, is that consumer prices are already high and aren't going lower. Ever. And if he thinks his soldiers can run rice mills and rice marketing, he's going to be disappointed, to say the least.
..
Gen Prayut's rice problem has barely started. The ability of the state-owned Bank of Agriculture and Agricultural Cooperatives to finance another gigantic handout -- the scheme's estimated cost went from 35 billion to 127 billion baht in three days -- is debatable'.
From November 19:
'The political bickering over how to help farmers suffering from low rice prices does not serve any purpose except exacerbating their hardship. Without a sincere halt to politicising rice prices, it is the rice farmers -- the very people everyone agrees deserve assistance -- who are destined to suffer the most.
...
The current government can use input from rice farmers and researchers as well about its plan to introduce crop substitutes in areas deemed inappropriate for rice farming. Maize, the government's preferred choice for farmers in 35 central provinces instead of rice, is widely viewed as impracticable because the crop would not grow well in areas that used to be paddy fields'.
From November 24:
'With just about one year left in office, Prime Minister Prayut Chan-o-cha and his government will have to give a high priority to existing problems in agriculture -- especially the falling price of rice.
...
A rice crisis always hits the government hard. Most of the measures introduced to tackle falling rice prices were not sustainable.
...
However, none of these subsidies or cash handouts are long-term solutions. Farmers should be allowed to take the lead in empowering themselves'.
The author pleads for more farmer training.

And on November 26:
'When the government gave rice farmers 13,000 baht per tonne to shore up the all-time-low paddy prices, Boonsong Martthong and hundreds of organic rice farmers in Yasothon province just could not care less. Why should they? Why kowtow to the rice millers who give farmers only 7,000 baht per tonne of paddy or rejoice at the state subsidy scheme at 13,000 baht when they can already get 20,000 baht without a fuss. What's more, their polished organic rice easily gets 45,000 baht per tonne from health-conscious buyers.
...
According to Greennet, a non-profit organisation, the organic rice market has increased by 28% this year.
...
Despite state eulogies for the King, an advocate of organic farming, successive governments all strongly support chemical farming. The Agriculture Ministry has practically become the mouthpiece for agro giants -- and agricultural officials their salesmen. It comes as no surprise then that Thailand is among the world's top users of farm chemicals. According to the Agriculture Ministry, Thailand is importing an average of 160,000 tonnes of farm chemicals.
... 
According to the Agriculture Ministry, Thailand is importing an average of 160,000 tonnes of farm chemicals a year, costing the country about 22 billion baht. In the past five years, the import of toxic farm substances has increased by 50% That makes Thailand the world's 5th biggest user of farm chemicals, according to the World Bank. The country's agricultural land area, however, ranks  48th in the world only. What's more, about 70 chemical pesticides used in Thailand are highly hazardous and not allowed in the West. The results? Most rivers and reservoirs in the country have become severely contaminated with toxic substances, which go directly to us consumers through the food chain.
...
The government is also pushing for farm zoning. "But this top-down policy won't work," Mr Boonsong insisted. "Farn officials don't know our localities. They don't have field experience. They don't have field experience. They don't have a support system either. What they can do expertly is telling us what farm chemicals to buy."
...
The problem, as always, is the gap between state's rhetoric for environmentally friendly agriculture and and its actions, the farmer said wearily'.
Conclusions are that current strategies are once more aimed at influencing the market, though they seem more directed at garnering political support. The Thai political setting has always relied on even votes for the whole country. This has created an elite class which sees it's rule being challenged from urban centers, which have the voices but not the votes. So it's no wonder that whoever is at the helm of the country, political reform based on empowering urbanites, is not a notion to be considered.
 
Finally to sum up the not so regional rice news section, the Vientiane Times (Nov. 25):
'Lao rice cooperatives have made good progress in terms of their rice production efforts but marketing and sales deficiencies are still causing problems for the co-ops'.
Others
Well if rice is not moving what is? The Phnom Penh Post (Nov. 23):
'A local subsidiary of a South Korean confectionary giant is investing $40 million to develop what it claims will be the world’s largest pepper plantation on a sprawling 1,000-hectare estate in eastern Cambodia, a company executive said yesterday'.
Well, let's see what that would do for global and local pepper prices.

Mangoes should also have been on the radar of South Korea. However the Phnom Penh Post (Nov. 18) reports:
'It has been nearly a year since the government signed a memorandum of understanding with South Korea that aimed to put Cambodian mangoes on the shelves of supermarkets in Seoul, yet local producers say there is little sign of any movement.
According to In Chayvan, president of the Kampong Speu Mango Association, the potentially lucrative trade agreement signed last December has stalled on South Korea’s stringent sanitary and phytosanitary (SPS) regulations, which local producers are unable to comply with.
...
Chayvan said Cambodian mango growers would be better off focusing their efforts on securing export contracts for China, and upping shipments to the Thai and Vietnamese markets. He said these countries have less stringent SPS regulations, while Thailand and Vietnam are ready to bend the rules on SPS and certificates of origin when their domestic production is insufficient to meet demand.
...
Mong Reththy, chairman of the agro-industrial conglomerate Mong Reththy Group, said his company has already shipped mangoes to Europe this year, and was looking forward to the possibility of exporting them to South Korea.
However, he said, the Koreans take food safety very seriously and this has proven a stumbling block.
“We are always looking to export to South Korea, but the issue is whether or not the government could meet their requirements,” he said'.
Not only are rice farmers suffering. The Phnom Penh Post (Nov. 17):
'Amid reports that Vietnam’s early harvest of cassava is facing downward price pressure, Cambodian farmers could be in for a rough season as local prices are largely dependent on those of the Kingdom’s more developed neighbour, a ministry official said yesterday.
...
“Our experience with the cassava harvest from last year showed that most farmers lost money and around 40 percent of cassava producers have already given up on farming,” she said, adding that last year’s average selling price of 500 riel per kilo was below the 700-riel breakeven point.
Heang [Sum Heang, head of the Pailin Cassava Association] added that she replaced 200 hectares of cassava with mango trees after losing $70,000 on the crop last year'.
In Thailand, alternatives are being sought for rice growing, even though it may not seem logic. The Bangkok Post (Nov. 16):
'The government's move to encourage farmers in 35 central provinces to grow maize instead of rice by giving them an interest rate subsidy is impracticable, according to a leading member of the provincial farmers assembly.
...
“Over the past years, farmers had responded positively to government policies. They have grown maize, Crotalaria juncea [brown hemp or sunn hemp] or beans, but those crops did not grow well in soil suited for rice. Corn and beans did not give yields, and farmers suffered losses,’’ he said. The government should ascertain the views of farmers, or listen to their problems before implementing any policies, the Chai Nat farmers’ leader said'. 
But also trying to fix the market is part of the Thai goverments strategy. The Bangkok Post (Nov. 9):
'Importers of wheat will be forced to purchase domestic maize as part of government measures to curb tumbling maize prices, under a cabinet decision'.
Bangkok Post (Nov. 25):
'The government yesterday approved a three-year, tariff-free soybean import plan to ease domestic shortages on the condition that importers promote soybean farming and pay more for domestically grown soybeans'.
Meanwhile ..., the Bangkok Post (Nov. 6):
'The deputy governor of Phetchabun province has stepped up his campaign against potato contract farming in Thailand, urging consumers not to buy chips from the producer. 
In the post, he referred to the report and expressed concerns about its impacts on the environment and how the company takes advantage of farmers'.