Tuesday, July 12, 2011

Hardly a day goes by in Cambodia in which the local press are not dedicating their local business news sections to the increasing production and export of agricultural products.
Take for instance Phnom Penh Posts:

  • July 8: Exports of rice quadruple. The officially reported quantities that is, the leakage over the border has probably remained the same. But still the added value is accruing to Cambodia, which is good for the country and the rice sector in general.
  • July 6: Vietnam's deep-water links spur Phnom Penh Port growth. Shipping via Ho-Chi-Minh is cheaper. Khmer Rice has exported more than 10,000 tonnes this year.
  • June 28: KOGID begins rice shipment. The South Korean owned firm is starting to send rice to the United Arab Emirates. They would also like to see the export of corn, cassava and (soy?)beans.
  • June 27: Corn exports earmarked. Producers are increasingly switching from cassava to corn production due to the increasing prices. KOGID again and CP Cambodia are fueling demand both domestically and through export. Official statistics point to a 50% increase in export.
  • June 24: Farmers flock to cassava. A bit contradictory to the June 27 article, it mainly points out that cassava trumps cotton which seems logic. Official statistics report exports of cassava are up by 74%.
  • June 22: Millers get export orders from mainland. LORAN and Golden Rice both report orders from China for fragrant rice.
  • June 20: Growing taste for cassava as exports rise by 74%. Prospects are good.
  • June 13: Boost in paddy purchase. Rice millers have purchased 10% more in the past seven months over the same period. Acleda Bank is quoted as saying loans for rice millers increased by 15-20%.
So at least on the above evidence one is lead to believe that hybrid rice production in Cambodia will be at best a marginal activity. The official exports of rice are increasingly going to sophisticated markets with a preference for traditional fragrant varieties.

Vietnews reports (3 July 2011) on a strange phenomena: cooperative rice farms under the guidance of profit seeking companies:
'It brought together 458 farming households whose fields were located near each other. They planted their rice on the same day and tended to their fields with production techniques provided by company officials.
The company supplied the rice seeds, fertilisers and other inputs in advance to the farmers without any interest rate, and bought all harvested paddy'.
Though the article quotes company claims that farmers earned profits of 150%, it fails to state compared to what nor whether the farmers actually received the extra profits.

A different plan for profit sharing has been devised in Laos. The Vientiane Times (21 June) reports that the Lao Agriculture Development Corp Company will launch an organic rice project in the province of Xieng Khouan. Farmers will receive bio-fertilizer and advice 'free' but be forced to sell the surplus production to the company at prices 40% below market price.
Now I doubt whether this will be a success, price is the number 1 incentive for almost all producers all over the world, Laos included. Take away the price and producers will look to satisfy their own needs. sod the rest. Or seek to 'smuggle' out their over production so as to pocket the 40% themselves. Wish the Corp Company success with that.


Back to hybrid rice. Bayer has settled with farmers in the US for just $750 million! That's a big mistake, showing how sensitive companies should be when introducing hybrid rice.
One problem for farmers in Southeast Asia is the lack of transparency between governments and companies as well as the lack of justice after complaints.
Surely Thai authorities will try to build in safeguards while pursuing popularizing hybrid rice? If export values drop for Thai rice because of hybrid contamination, what then?
Looking at more detail it's in the Philippines where there is little or no export of rice and north Vietnam with the same position where hybrid rice is 'popular', though again without government intervention, this may not be the case. Surprisingly
Bayer Cropscience itself is very quiet on this deal ...