Obvious

Schocking
Probably the most important news this month is the report published by GRAIN conerning issues of land grab. 
With the increased agricultural prices of the last few years, land grabbing has become a pandemic which seems to be never-ending. From the summary:

'Despite the inherent shortcomings of the data, we feel confident in drawing six major conclusions:

1. The vast majority of farms in the world today are small and getting smaller
2. Small farms are currently squeezed onto less than a quarter of the world's farmland
3. We are fast losing farms and farmers in many places, while big farms are getting bigger
4. Small farms continue to be the major food producers in the world
5. Small farms are overall more productive than big farms
6. Most small farmers are women.

Many of these conclusions might seem obvious, but two things shocked us. One was to see the extent of land concentration today, a problem that agrarian reform programmes of the 20th century were supposed to have solved. 
... 
The other shock was to learn that, today, small farms have less than a quarter of the world's agricultural land ...'. 

The report is a damning of current policies driving farmers off their land, mostly for the acquired land to be distributed to wealthy investors who struggle to meet the efficiencies of those farmers who have been displaced. When, if ever, will this stop?

Pay-back

With prices for rice dropping, inevitably victims are falling. 

Victim 1? Apparently the Cambodian company named Megagreen Imex Cambodia was in line for fame and especially fortune in the nation's rice export dream. Phnom Penh Post (Jun. 6):

'In December 2011, the managing director of Megagreen Imex Cambodia, Renne Outh, proudly announced that his firm had inked a $21 million deal to be the first to ship Cambodian rice to the Philippines.

Nearly two and a half years on, not a single Cambodian grain has reached Manila. Export figures for the first five months of 2014 show that Megagreen, once among the top 10 rice exporters in the country, has fallen to 48th out of 84.

The failed Philippines deal marks a pattern of broken promises, as the agricultural wholesaler now finds itself besieged by creditors and lawsuits seeking damages in excess of $1 million, with flawed agreements from one end of the supply chain to the other'.

Lower prices have meant that Cambodia's rice millers are left with unsold produce. And supposedly banks with unpaid loans. Phnom Penh Post (June 18) hints why:

'Cambodian rice currently trades at $440 per tonne. Meanwhile, rice in Thailand and Vietnam is selling for $385 per tonne and $405 per tonne respectively.

With the next harvest season due to begin in just three months, Lim Bun Heng, chairman of rice export firm Loran Group, said that millers had been pressuring his company to find buyers for Cambodian grain.

...

A rice mill owner, who asked not to be named for fear of damaging his business’s reputation, said that he had more than 2,000 tonnes of rice waiting for a buyer in Battambang province.

The mill owner added that he had accrued over $400,000 worth of bank loans to buy the rice off local farmers in the hope of selling it on to exporters for overseas markets.

“To pay back the bank only, I am forced to sell the paddy off at a lower price than what I bought it for,” he said'.

Expect the bill for these losses to be passed on to farmers come next harvest 

Another loser in the making? Vietnamnet reports (June 6) on the countries dealings with the Philippines: 

'Vinafood 1 and Vinafood 2 have been severely criticized for offering overly low bids in an effort to obtain the contract with the Philippines. Analysts believe that Vietnam made a major mistake when analyzing the situation, which then led to the wrong decision. Tuan of Thinh Phat [company] pointed out that Thailand was the major rival of Vietnam in the bid for the rice export contract because it was nearer to the Philippines than India and Pakistan, which allows savings on transportation costs. However, Tuan said Thailand should not have been considered a threat to Vietnam. NFA said that the Philippines would only accept rice harvested no earlier than four months ago. Thailand stopped collecting rice in February 2014. “This means that Thailand only had rice harvested in 2012 and 2014, and that Vietnam was the only seller in the market,” Tuan said'.

Re-wiring

The rice pledge scheme in Thailand. As it's now being wrapped up by the junta, there are a few articles concerned. first, the Nation (May 25) mentions that 

'The ousted government was able to pay about Bt100 billion to the farmers until now, but another Bt90 billion is still owed to 80,000 farmers'. 

The only reason for the outstanding amounts not to be made was that the prevoius government was a caretaker government. Luckily the junta has no law to uphold so can do as it pleases. Another PR activity.

The Bangkok Post (May 26) however mentioned that farmers were happy (who isn't nowadays?) as stalled payments were now being paid.

Thai farmers now having been paid, want new handouts. So mentions the Bangkok Post (June 2): 

'Songpon Poonsawat, chairman of the Council of Farmers in Ang Thong province, said his organisation would propose short-term assistance packages for the NCPO [the junta] to consider, to help farmers suffering as a result of lower prices. Mr Songpon suggested the intervention be carried out for the next two crops, until the market price of rice returns to normal'.  

But what is normal?

Then some confusing news. The Nation (June 5) has a short item on the end of the rice-pledging scheme: 

'Former Democrat MP Warong Dechgitvigrom Thursday called on the National Council for Peace and Order to end the controversial rice-pledging scheme'. 

It has already ended.

'He said the NCPO should replace the scheme with a rice price guarantee'. 

In other words: a rice pledging scheme!

And on June 8, farmers came up with a new proposal (Nation): 

'Rice farmers yesterday proposed that the National Council for Peace and Order set a price for rice based on the average production cost plus a 40 per cent profit margin so they can survive'. 

That also looks like a rice-pledging scheme. The Bangkok Post notes (June 10) that the military are unsure what to do. Going by previous experiences they fail to take decisions unless you criticize them... They prefer to shoot the messenger of bad news.

The junta has spoken and there will be a new subsidy scheme. The Bangkok Post (June 18): 

'Gen Chatchai said that participants agreed with the idea of a "cultivation subsidy" and soft loans for rice growers nationwide in the 2014/2015 crop season. The subsidy was set at 500 baht per rai (1,600 square metres) for up to 15 rai (24,000 square metres) per family, based on rice growers' estimated cultivation costs of about 4,000 baht per rai'.

One problem will be the way the subsidies will be doled out, probably through subsidies to ag input sellers. While there may be limitations on hand-outs per family, there will be all of a sudden be a lot more families in Thailand ....

Top dog
The bargain sales have resulted in Thailand returning to the top of the rice exporting nations. The first five months of this year have seen this sale recapture the buyers spirits and Thailand is yet again the no. 1 exporter in terms of tonnage. Bangkok Post (June 4): 

'Somkiat Makcayathorn, secretary-general of the Thai Rice Exporters Association, said on Wednesday that from Jan 1 to May 20, 2014, Thailand exported a total of 3.93 million tonnes, surpassing India (3.74 million tonnes) and Vietnam (2.4 million tonnes) in the same period'.  

Hurrah! Back to no. 1. But why obsess with who is no. 1? Surely it should be the income generated for the nation which should count. The article continues to assist the junta's PR machine: 

'The fall happened when the Yingluck Shinawatra government increased the price of Thai rice through its loss-ridden rice-pledging scheme, which promised over-market  prices to farmers. Many were never paid'. 

It appears that the exporters and general traders and millers are the ones cheering. Farmers are a lot more quiet ...

Meanwhile, Channelnewsasia (June 4) reports on the Thai Rice Exporters Association's prediction of a 20% rise in exports for Thailand this year.

Est
The Bangkok Post has the story on the losses of the old rice-pledging scheme (May 28): 

'Estimated losses from the previous five crops under the Yingluck Shinawatra government’s rice-pledging scheme could be lower than 500 billion baht, says the Finance Ministry'. 

Or 15 billion US$! Inflation? PR? Hmmm, ...

The previous government and their sceme (-ing?)? They should be tried: 
* loss of nearly 3 million tonnes (swept under the carpet?), 
* poor quality and 
* failure to calculate what the loss was. 
The Bangkok Post (June 10) reports that the former government want a quick resolution on the charges. As everything is in a flux, there probably can't be any conviction unless one based on politics.

As Thailand has no clue as to what they have stockpiled in the past it comes as no surprise that the Bangkok Post reports (June 13) that an audit will take place. We also know that the audit will find less rice than expected ...

National affairs

The Cambodia Daily (June 3) sees the positives in a 1% rise in rice exports from Cambodia. Quite confusing as it also mentions rising imports to or from Thailand?

But ..., the problems in Thailand have had an impact on Cambodian direct exports to Thailand. They have nearly disappeared, so reports the Phnom Penh Post (May 29).

Real growth lies elsewhere. Via Phnom Penh Post (May 19) it is reported that Cambodian organic rice is finding a market in Hongkong:

'While the US and Germany have traditionally been the key markets for Cambodian organic rice, with about 300 tonnes sent there last year, CEDAC president Yang Saing Koma told the Post that his organisation has exported 30 tonnes to Hong Kong this year, as the market for the Kingdom’s natural produce expands'.

With rice losing favour, the rural sector is losing a taste for alternatives. The Cambodian Daily (May 27) notes that cassave exports are also down:

'Cassava exports dropped by about $25 million during the first four months of 2014 compared to the same period last year, according to figures provided by the Ministry of Commerce on Monday.

From January to April this year, Cambodia exported 203,934 tons of cassava, worth about $13 million, the figures show. In the corresponding period last year, 273,415 tons, worth about $38 million, were exported'. 

A typical double whammy: lower prices and less production. This contrasts heavily with black pepper. Cultivated in patches near the coatsal towns of Kep - Kampot as well as near Kampong Cham, production was on the up, so reported the Phnom Penh Post (May 27):

'Kampot pepper has the WTO’s geographical indication (GI) status linking the quality of the product to its origin. Exports and prices have been on the rise since receiving the status in 2010.

The total cultivated area of GI Kampot pepper reached 90 hectares this year, twice that of 2013 – but it will still be years before many of these plants mature and are ready for harvest.

Him Anna, a pepper farmer in Kampot, told the Post that she had exported 3 tonnes of pepper this year and the market was hungry for more. “There is huge demand in the market with a very good price, but until now we still have a problem with supply.”' 

Let's just hope that prices remain attractive and markets can deal with the upsurge in acreage from Cambodia. It remember that the Malaysian state of Sarawak had the intention of cornering the pepper market, however expansion didn't reap rewards.

Well with farmers being caught with increased corporisation, they are now urged to go green, so reports the Phnom Penh Post (May 23): 

'Officials from the Ministry of Agriculture have called on farmers to cease using chemical pesticides and adopt environmentally friendly methods in an effort to increase yields and reduce damage to produce. Hem Em, a farmer with 7 hectares of pepper-growing land in Kampong Cham, said he had spent more than $300 on pesticides this season to ward off pests.

“If we do not use pesticide, we will not be able to harvest crops because the insects destroy the flower and our crops give no fruits,” he said'.

It wouldn't hurt if green produce was paid more, but that's probably not the message.

Founding father
The Phnom Penh Post (May 23) on the new Cambodian Rice Federartion (CRF). An interview with  CRF’s newly elected president and CEO of SOMA Group, Sok Puthyvuth. Some of the Q and A's:

'How is your rice body going to represent farmers?
This is the foundation of the rice sector. If the foundation is not strong, forget about the millers or exporters.

One of our major priorities is to really look at the foundations of the sector, how have the farmers been doing? Whether the access to all this support, like finance, fertiliser or techniques are up to date? 

...

Your father is the deputy prime minister. Have your family ties helped you land the CRF job?
I am the new generation. You could say it is a coincidence that I happen to be in this position, but it was not appointed. We went through an election. I don’t think people voted for me because of who I am. If they feel that I am someone who doesn’t know what I am talking about, I don’t think they would have voted for me'.

An earlier article by Phnom Penh Post (May 20) also noted that his father-in-law is the PM himself ..., so that might help, certainly with the election process. It also noted that all other industry bodies would be dissolved ...

The Phnom Penh Post (May 30) has an interesting coverage of a rice industry workshop:

'The rice industry's quest for greater quality at lower cost reached a dead end yesterday at a conference in Phnom Penh, with exporters and farmers polarised on how to achieve greater returns for the industry.

The workshop, titled "Improving Rice Value Chain and Enhancing Farmers’ Livelihoods", was attended by more than 70 farmer representatives, businesses and government officials. On one side exporters want farmers to provide a better-quality rice grain, but on the other, farmers cannot afford the premium to pay for the higher-quality seed ... Kan Vesna, a farmers representative from Battambang province, rebutted the millers concerns, saying millers systematically reducing prices across the industry created little incentive for farmers to improve their crops'.

With prices dropping and companies feeling the pinch, no doubt lower prices for farmers will be the indiustry's answer to their problems (passing on the buck).

The Cambodian Daily comes with a farmer based article (May 30) concerned with the same workshop:

'Cambodia’s rice farmers are being neglected amid the government’s push to ramp up exports of milled rice to one million tons by the end of next year, a goal that will only be reached with improved cultivation, agriculture experts and farmers said Wednesday at the Royal University of Phnom Penh'.

Mitigating

The World Bank has some bad news: world food prices are going up (source). We never see this sort of alarmist news when prices are dropping (though we never notice it in the shops  ..., lower prices mean more profit for end-use companies ...). The price rise is lead by rises in wheat and maize, due to political instability in Ukraine and wider implications of the conflict. Only rice prices were dropping ... The report also notes: 

'Food price shocks can both spark and exacerbate conflict and political instability, and it is vital to promote policies that work to mitigate these effects'. 

The only way forward is to reverse policies on creation of national reserves. For years the World Bank has been advocating selling of strategic stocks thus exacerbating price rises! Another hmmmm

World prices seem to be on the drop at least in the short term. India has announced to offload it's reserves on the internal market so as to drive down prices and thus inflation (source). But that means less exports further on down the road and eventually higher prices.

King

Meanwhile farmers are proving to spoil local markets in Laos. According to Vientiane Times (May 23):

'The price of rice in the markets of Borikhamxay and Luang Namtha provinces increased 500 kip per kilogram this week, while staying the same in most other provinces. The price rise is believed to be caused by some farmers stocking their rice to consume through the wet season, causing a shortage in the markets'. 

Oddly the article features no official response to the price rises. Are Lao farmers king?