Why

Politics determine the lead of this months blog on rice in Cambodia and the larger area. But not necessarily in the same way.

In Thailand, the junta has placed itself above the law and used the courts to criminalize the democratic opposition. Using a flimsy accusation such as a rice policy gone wrong (with no personal gain made) it has failed to recognize that time is always at an advantage to people power: if change is not to come today then there's always a tomorrow. Oppression will never sustain.

Meanwhile the most vocal English voice based in Cambodia to see the shortcomings of the increasingly undemocratic Hun Sen regime, the Cambodia Daily, has been forced to close shop. 
An example of their typical reporting (Cambodia Daily, Aug.  31):

'The Land Management Ministry on Wednesday announced a plan to resolve a yearslong land dispute between thousands of villagers and well-connected sugar barons by early next month, though not all affected communities were included.

The long-running dispute centers on the owners of sugar plantations, including CPP Senator Ly Yong Phat, whom villagers have accused of overseeing violent evictions and land grabs. The E.U., an importer of Cambodian sugar, started work on a comprehensive compensation plan for the families more than three years ago.

...

Eang Vuthy, the head of Equitable Cambodia, who works with communities evicted by sugar plantations, said on Wednesday he had questions about the plan’s narrow scope.

Mr. Vuthy noted there were affected villagers in other provinces—including hundreds in Oddar Meanchey province,

...

Contacted about why those four districts were singled out, Mr. Laut, the ministry spokesman, said those were the only communities affected by evictions from sugar plantations.

About 40 ethnic Kuoy villagers who were affected by a sugar plantation in Preah Vihear province submitted a petition to the Chinese Embassy on Wednesday. The villagers asked the ambassador to request the Cambodian government cancel economic land concessions granted to Lan Feng and Rui Feng, as well as three other related sugar plantations, which stretch over 20,000 hectares and include more than $1 billion in investment.

More on agriculture and eviction by the Cambodia Daily. All in the name of development it seems, though me thinks it's transferring no-ones rights to a business person with a couple of free loaders profiteering along the way. The Cambodia Daily (Aug 29):

'More than 400 families have been ordered to remove their homes built next to a rubber plantation on land in Kratie province given to Hun Mana, the daughter of Prime Minister Hun Sen, or see them forcibly torn down without compensation.

...

The government granted 9,855 hectares of an economic land concession to Ms. Mana in 2008, including 700 hectares which has been cultivated into the rubber plantation, said commune chief Bun Nhal.

...

Meth Thy, 44, who moved onto the land in 2007 and farms on a 12-by-200 m plot, said he has no intention of leaving. “I will not move from the land because my family has stayed here for more than 10 years,” he said'.

If you can't ask these types of questions, the future for the kingdom seems bleak.

Discovery
Big news on the rice export news front. The Phnom Penh Post (Aug. 10):

'The Kingdom’s apex rice industry body has been meeting this week to discuss ways of nailing down a potentially massive deal with Bangladesh, which earlier this month inked a memorandum of understanding to purchase 1 million tonnes of Cambodian rice over the next five years'.

It gets complicated, as Bangladesh notes that the deal is done, though Cambodian exporters are still to determine what the costs are of exporting to Bangladesh. The Phnom Penh Post (Aug. 25):

'Cambodian officials and members from the private sector have refuted international media reports that claim the price for rice exports to Bangladesh will be set at $453 a tonne as part of a government-to-government deal that hopes to see 250,000 tonnes of white rice exported to Bangladesh by October.
A report released yesterday by Reuters cited two Bangladeshi officials from the Food Ministry as having set the price at $453 per tonne, adding that the purchase agreement was still waiting Cambodian government approval. Cambodia has been negotiating with Bangladesh on prices for a potentially massive deal after inking a memorandum of understanding earlier this month that could see 1 million tonnes of rice sent to the South Asian country over the next five years'.

More export news though not registering high in the Khmer news. UkrAgroConsult (Aug. 9):

'At the stage of inspection of containers on the bags of cereal was discovered dead insects – pests of grain stocks
Inspectors of Rosselkhoznadzor detained 4 of the container with rice grains "Jasmine" with a total weight of 100 tons, arrived from Cambodia, according to the website of the Supervisory authority. The reason for the import was the discovery of dead insects – pests of grain stocks'.

Policy news. The Phnom Penh Post (Aug. 15):

'The government announced yesterday that it would “intervene” to support the price that farmers receive for their paddy rice, though without instituting a price floor or direct subsidies that would jeopardise a free market.
Vongsey Vissoth, secretary of state at the Ministry of Economy and Finance (MEF), told representatives of the private sector and agricultural cooperatives that the government would take action to prop up the price that local rice farmers receive for their harvest. 
...
As part of a new initiative, the government will act as an intermediary in negotiating rice prices and will facilitate transport to help farmers lower their logistics costs.
“Provincial governors and authorities will actively intervene in the market failure,” he said. “Authorities will be responsible for keeping tabs on price-makers to ensure that the price they offer is fair to farmers, and also to provide assistance in transportation, building new infrastructure and preventing unofficial fees from being charged on transport.”
Vissoth said provincial authorities could dip into the provincial budget to provide these facilities to farmers, and should also provide free transport to help farmers get their rice paddy to local buyers or markets.
“This is a short-term intervention in order to stabilise prices for farmers,” he said. “The policy will put pressure on price-makers to raise the prices they offer farmers.”

Pumping
Earlier the Phnom Penh Post (Aug. 8) reported on more initiatives designed to strengthen the local market:

'The government is pumping more money into its emergency rice loan fund ahead of next month’s rice harvest, raising the fund’s total capital to $50 million despite millers showing little inclination to borrow from it last season.
Kao Thach, CEO of the state-owned Rural Development Bank (RDB), said yesterday that the government had officially signed off on an additional $23 million for the fund, which he said should be sufficient to prop up the struggling rice sector.
“The government recently approved another $23 million to help the rice industry, and the new budget will be used to support millers who have insufficient funds,” he said yesterday.
The government launched the fund with $27 million last September in response to private-sector demands for support following two consecutive years of drought and falling rice prices that threatened to collapse the local industry. 
...
Regardless of the additional financing, Tang Chhong Ngy, marketing manager of rice miller LBN Angkor (Kampuchea), said rice millers still had the same concerns over meeting the RDB’s collateral requirements.
“The loan is necessary for rice millers, but the collateral is not in line with reality, which is why many have not been able to access the funding,” he said. “The criteria for applying loans can work only for big rice millers and exporters, not for small shareholders.”
The crux of the problem, he added, was that “the loan is meant to help the rice sector, but it does not realise the reality and complexity of the industry”.

Sideline news. The Phnom Penh Post (Aug. 21):

'The Rural Development Bank (RDB) is seeking proposals from registered Cambodian agricultural firms to develop rice storage warehouses and rice-drying facilities in Kampong Thom, Prey Veng and Takeo provinces, each with the capacity to store 50,000 tonnes of paddy rice and dry approximately 1,500 tonnes of rice daily'.

Unchanged
Thailand and the region at large fail to come up with little news than these new rice data from Thailand (Bangkok Post, Aug. 22):

'Around 1 million rai of rice plantation in the Northeast was destroyed by the recent flood, but it is unlikely to have any severe effect on Thai rice production and export, with shippers and industry officials keeping rice export forecasts unchanged at 10 million tonnes. Flooding is expected to support Thai rice prices continuing to rise as global demand remains strong. The Agriculture Ministry said that although rice plantation was hit by the flood, the annual production forecast remained unchanged at 28-30 million tonnes of paddy, or around 18 million tonnes of milled rice. This amount is sufficient for domestic consumption and abundant exports, the agency said.

...

"The flooding would affect the production of glutinous rice, grown mostly in northeastern areas, but it would not hurt rice exports," Mr Chookiat [honorary president of the Thai Rice Exporters Association]. Glutinous rice makes up 10-20% of total Thai rice production'.

And the agriculture by decree in Lao. Vientiane times (Aug. 29):

'Vientiane is planning to reduce labour intensive rice cultivation with the number of labourers working on rice farms to be cut in half by 2020.

The capital's five-year plan began last year accompanying the Party's modernisation efforts around the country with increased mechanisation in agriculture including the use of rice planters and harvesters.

...

The Department Director Assoc Prof. Dr Linkham Douangsavanh said "The practice began on a 400 hectare rice farm in Hadxaifong district, and rice planters and combine harvesters are now used on more than 1,500 hectares of rice farms in the district and Xaysettha district".

According to him, labour intensive rice farming resulted in 850,000 kip profit per hectare, while a fully mechanised rice farm provided around 2,500,000 kip profit per hectare.

"The use of machinery can save time while providing additional jobs for the industrial and service sectors," Assoc Prof. Dr Linkham said.

Without use of machinery, 10 to 15 people were required to work one hectare, while only 2 or three people were needed when working with machinery, he added.

The department is expanding the use of rice planters and combine harvesters in Xaythany and Naxaithong districts.

Modernisation of the agricultural sector is included in the capital's five-year socio-economic plan with the reduction of intensive labour rice farming reaching 9.2 percent last year, the first year of the plan's implementation.

The capital is targeting to reduce around 2,700 workers in rice farming this year, with the total reduction to reach 13,500 at the end of the five years (2016-2020).

The Department of Labour and Social Welfare will be engaged to arrange training and allocate new jobs for the workers in the industrial and service sectors'.

Decimated
There's quite a bit of wider agro news. The Phnom Penh Post (Aug. 4) reports on the banana business:

'Hoang Anh Gia Lai (HAGL), which last month became the first company to officially export bananas from Cambodia, has secured more orders for the fruit and will ship another 100 tonnes of bananas from its plantations in Ratanakkiri province today, a company representative said.
The order will be transported overland to port facilities in Vietnam and then loaded onto a container ship bound for its buyer in China, according to Thach Quanh Tha, director of administration for HAGL.
..
The company delivered its first 100-tonne shipment of bananas to China late last month. Thach said bananas grow year-round and he expects to export similar-sized shipments on a weekly basis.
HAGL’s rubber and oil palm plantations sprawl over thousands of hectares of economic land concessions in northeastern Cambodia. The company has faced repeated allegations of land grabbing from indigenous communities and accusations of decimating ancient forests.
...
Hean Vanhan, undersecretary at the Ministry of Agriculture, confirmed that HAGL was the first company to officially export Cambodian bananas to international markets. However, he said the shipment was routed through Vietnam, and hinted that it might have been mislabeled as originating in that country.
He said the government was seeking direct access to China, but faced restrictions due to Beijing’s sanitary and phytosanitary requirements for food hygiene and safety'.

In contrast, the banana export from Laos to China has gone down. Vientiane Times (Aug. 25):

'The export value of bananas in the first six months (Q1 and Q2) of this year decreased compared to the same period last year and is expected to decline further.

The drop in exports comes after the government called a halt to the establishment of large scale banana plantations in a bid to prevent environmental impacts, with local authorities also taking stricter action against banana farms. Laos earned almost US$125 million from banana exports in Q1 and Q2 this year, while last year's figure for the same period was over US$137.5 million, according to the Ministry of Industry and Commerce.

...

Following the government's new controls, many companies have now abandoned their plantations and destroyed their banana trees, while some are waiting until the end of their contract with farmers.

...

Although the economic benefits of banana production are substantial, they are unevenly distributed according to preliminary research findings undertaken by NAFRI in 2016 on the commercial production of bananas.

Banana plantations are a good strategy in theory and have the potential to generate income for people in rural areas, but if not properly controlled they can adversely affect farmers' health and soil quality. Commercial production in Laos is generally carried out under the 2+3 model with agreements drawn up between farmers and the investor.

The agreement specifies that farmers contribute their labour and land, while the investor provides seeds and a market for the crop, as well as advising on production techniques'.

Earlier, the Vientiane Times (Aug. 5) explained how it should haven been done:

'Banana plantations in Laos can attract further investment if companies use a feasibility study to propose to the government for consideration.

The proposal should report the target of land concession, the kinds of banana to plant and the rate of fertilizer and chemical to use as well as herbicides and pesticides, Deputy Minister of Agriculture and Forestry, Dr Bounkhouang Khambounheuang commended.

The land concession should not be in rice fields or irrigation systems and the system of planting the fruit should follow the clean agriculture method as per government policy, he advised. 

he government has ordered a stop to banana plantation expansion projects in northern provinces found to have caused negative impacts on environment and local communities.

Importantly, the companies had not proposed the project to the government, and only signed the contract on land concession direct with local farmers. 

This impacts the quality of rice field soil by using large amounts of chemicals and many farmers got sick and ill by working on the project.

The issue is a major impact in food security affecting rice field numbers in Laos.

Many companies have stopped banana farming and destroyed their farmed banana trees because some of them failed to comply with requirements stated in the signed agreements as they have breached regulations on the import and employment of labour, imported and used controlled chemical substance, had poor environment protection planning as they have littered plastic bags, foams, causing air and water pollution.

All these have caused impacts on the livelihood of nearby communities and consequently attract criticism from local people according to the provincial authorities.

Some are waiting until the end of the contract between companies and farmers before harvesting their crops'.

Plotting
Away from banana business, there's another informative Cambodia Daily article (Aug. 25), this time on local grapes:

'Amid fields of rice in Battambang province, one family branched out into grapes, creating Cambodia’s first bottles of locally-produced wine. Now they have their sights set on conquering the juice market.

...

The couple produce about 10,000 bottles of wine annually, with each of the two batches taking six months to prepare, according to Mr. Thai Chheoung. It’s sold only onsite at a cost of $15 or $25, depending on a bottle’s age.

The couple are not the only Cambodians to challenge the status quo of fruit agriculture—although it is a rarity. Strawberries have also recently made an appearance.

In Pursat province, Ouch Sambo and his Spanish business partner began planting strawberries imported from the European country earlier this year, battling with a climate unfavorable to the fruit’s growth—which their first plot did not outlast—as well as international imports'.

From grapes (and strawberries) to pepper. More problems though with marketing. Phnom Penh Post (Aug. 17):

'The traditional supply chain dynamics for the renowned Kampot pepper are breaking down due to a market boom that has brought large-scale investment into pepper cultivation, while sidelining the small shareholders that rely on the benefits of being part of the association that represents them.
Ngoun Lay, president of the Kampot Pepper Promotion Association (KPPA), said that while the annual harvest is typically over by August with the product packaged and sold, about 30 tonnes of peppercorns remain stockpiled due to the increase in production. The increased harvest has put pressure on the association as larger producers have taken priority over their own orders. 
...
Lay explained that because Kampot pepper has the World Trade Organization’s coveted Geographical Indication status, a growing number of companies within KPPA have taken advantage of its reputation by breaking away from the association’s norms by investing in their own packaging lines.
“We have never been concerned with local packagers before,” he said. “Now we realise this is our point of weakness, and we have to look for new partners for packaging and exporting our products.” 
...
He [Hym Piseth, production director for local specialty food producer Confirel Co Ltd] added that even if KPPA members find new export and packaging partners, it would not disrupt the company’s existing production chain. Instead, he said that KPPA was to blame for continuously allowing new members to join without securing its own supply chain'. 

Better news for vegetable growers. The Phnom Penh Post (Sep. 1):

'East-West Seed Group, one of the world’s largest vegetable seed companies, has stepped up its presence in Cambodia by officially launching a local branch and taking over distribution operations in the Kingdom to better address local market conditions, a company representative said yesterday.

...

Rithea [Heng Rithea, country representative of East-West Seed (EWS)] explained that Cambodia’s agricultural industry faces numerous challenges, including a hot, humid climate subject to heavy rains and extreme weather conditions.

“This kind of environment results in high pest and disease pressure,” he said. “Farmers also lack access to technology, basic infrastructure like farm-to-market roads, irrigation and post-harvest facilities and lack of access to credit and finance.”

He said another challenge here was the amount of unregistered seeds that flow into the country from different channels and which, while sold at very competitive prices, are of dubious quality.

“Some farmers who used those seeds without any information or warranty wasted lots of time, money and labour as the seeds did not germinate or provided low yields,” he said'.

More good news, though for less farmers. The Phnom Penh Post (Aug. 24):

'An international certification body has granted its first European Union organic certificate to Cambodian fruits and vegetables, clearing a hurdle for their export to the EU market, German development agency GIZ announced yesterday.
Ten Ra, technical adviser for trade facilitation and standards at GIZ, said that the Khmer Organic Cooperative, a collective of smallholder farmers, was granted the organic certification earlier this month. He added that this recognition would help locally grown organic produce to reach international markets'.

Just to sum up these niches, here's a thought from Lao. The Vientiane Times (Aug. 19):

'After investing a great deal of money to develop their site, Phutawen Farm has reaped a healthy harvest of local and foreign tourists, Socio-Economic newspaper reported this week.

The farm located in Thaphabath district of Borikhamxay province received a lot of interest from visitors for its first official season from January 15 to February 15 this year with about 200,000 people coming through the front gate, far exceeding the owners' expectations, the newspaper reported citing Director of the farm, Ms Dalouny Duangpaseuth.

Based on their initial success Ms Dalouny expected the farm's second season from November this year to March next year to reach an amazing 1 million visitors'.

Mass
Niche markets beyond,  how commodities fare. Cambodia and rubber. The Cambodia Daily (Aug 23):

'Citing a big boost from Cambodia’s vast rubber tree plantations, Prime Minister Hun Sen on Tuesday said the country’s forest cover had been increasing, before blasting an NGO critical of the country’s illegal logging trade.

Mr. Hun Sen boasted of Cambodia having more rubber tree plantations than Vietnam, saying that the trees would become part of the total forest cover, despite the rubber forests belonging to production factories.

“Our forest cover is now 49 percent, and as other protected areas are included in the future, our forest cover will be vast,” he said during a national forum on protection and conservation of natural resources in Phnom Penh on Tuesday'.

An expansive article highlights the Thai choice to expand rubber growing and what this entails looking onward. The Bangkok Post (Aug. 27):

'Thailand is the world's largest rubber producer, with 4.47 million tonnes of it having been produced in 2015 alone. The country is responsible for one-third of the world's total output. Much of the industry's growth has happened over the last decade. The environment has felt the adverse effects of development, but rubber has also given farmers opportunities to invest in plantation land.

...

Between January and February 2015, rubber prices plummeted to the lowest figure in the past 13 years -- 36.95 baht per kilogram of natural rubber sheets. By contrast, the highest rate recorded was 174.44 

 baht per kilo in February 2011. Prices have failed to recover since. As of this month, prices remain between 50 to 54 baht per kilogram of natural rubber sheets. This might seem optimistic if it weren't for the fact that the cost of living across Thailand is increasing sharply, forcing the debts of rubber farmers to stack up.

The article highlights the various governments attempts at intervening in the domestic market with little effect other than expanding the business of storage'.

Seeking better times. The Bangkok Post (Aug. 16):

'Asia's top rubber producers will meet in Thailand next month, an official at Thailand's rubber authority said on Wednesday, with export curbs to help boost prices likely to be on the agenda.

...

Senior officers from the ITRC and the board of its operational arm, the International Rubber Consortium, met on Aug 3 in Bangkok, according to an ITRC press statement.

They expressed concerns "on the current downward rubber price trend" and discussed measures to improve the price of rubber, the statement said.

Officials expect rubber output from Thailand and Malaysia to decline this year due to low rubber prices and bad weather, including heavy rain and floods in northern Thailand'.

Sugar, another of those crops hoping to line the pockets of ex-rice growers is more and more in the doghouse. The Bangkok Post now reports (Aug. 26):

'Tax rates on drinks with a sugar-based sweetener will be gradually raised every two years of a six-year span to give time for producers to reduce sugar content in soft drinks, says Finance Minister Apisak Tantivorawong'.

Next up, cassave. The Bangkok Post (Aug. 21):

'Thai tapioca exporters have agreed to stop lowering prices to put a lid on the losses incurred by local farmers, industry officials said last week. Members of tapioca export agencies have agreed to work together to stop cutting prices for importers, mostly Chinese, in a bid to halt the domestic price from falling further, said Boonchai Srichaiyongpanich, president of the Thai Tapioca Trade Association.

...

Tapioca currently sells for 1.90 baht per kilogramme. However, some exporters who have bigger factories with lower costs previously sold it for 1.30 baht per kg, to the detriment of many Thai tapioca exporters and farmers.

...

The associations have also requested tighter surveillance along the border to keep tapioca products from being smuggled in from neighbouring countries. Such contraband leads to a boost in supply that pushes prices down'.

And then there's plam oil. The Bangkok Post (Aug. 14):

'A decline in the price of palm oil fruit was not caused by market manipulation but an oversupply, the Commerce Ministry says. Nuntawan Sakuntanaga, chief of the Department of Internal Trade, said officials had investigated the falling price and found that supply outweighs demand.

...

According to Ms Nuntawan, compared with the same period last year, the output of palm fruit from April to June this year has gone up'.

Switch
Finally back to the niches, a Lao report on organics. The Vientiane Times (Aug. 4):

'Lao small-scale farmers can now access Participatory Guarantee Systems (PGS), to help them to increase the supply of quality organic products to the local market.

...

Participatory Guarantee Systems (PGS) are locally focused quality assurance systems that certify producers based on active participation of stakeholders and built on a foundation of trust, social networks and knowledge exchange.

...

The project also helps to assess the country's national legal and regulatory framework and how to adapt to PGS to support for direct marketing through Google maps.

Presently, PGS for organic agriculture has been conducted with smallholder farmer groups in the capital and in provinces of Huaphan, Xieng Khuang, Savannakhet. 

...

Since 2011 Lao Organic Agriculture Group has welcomed farmers to set up booths to sell their organic products at That Luang Esplanade on Wednesday and Saturdays.

The organic market in Vientiane sells on average around 1.8 to 2.0 tonnes of organic fruit and vegetable and related items a month, helping members of the group to support themselves, families and communities.

They have seen larger sales annually, serving to attract more farmers to switch from growing vegetables using chemical fertilisers to organic methods'.