Wasted

The past month has seen little publicity concerning (hybrid) rice. 
The furore over the Thai rice mortgage scheme seems to have somewhat passed? Or has it just retreated to the shadows waiting for the inevitable: it's failure to post even a semblance of a profit?

Broke

Thai's pain has not translated to Cambodia's gain. 

Apparently broken rice is hindering exports:

'Exports of milled rice had fallen dramatically last year because of the poor quality of paddy rice, insiders said yesterday.

Milled-rice producers told the Post [Jan. 9] that a large amount of paddy rice broke'. 

So in 2011, exporters spoiled the market for the 2012 Cambodian rice exporters ... The article makes no reference as to how this could be addressed; it's a natural phenomena? 
It does add an antidote to the first statement (exports dropped?):

'According to the trade and promotion department of the Council for Development of Cambodia, companies exported 205,717 tonnes of rice in 2012, a rise of 1.9 per cent compared with the 201,899 tonnes exported in 2011'.

Weirder, an earlier article (Jan. 3) from the same source notes: 

'Cambodian milled rice exports to international markets grew only 2 per cent year-on-year, leading rice trading experts to express concern that the goal of exporting a million tonnes in 2015 cannot be accomplished'.

As if anyone has ever believed in reaching the figure ...

So exports are growing. But by how much? A week later in the same news source (Jan. 17): 

'Cambodia's total paddy rice output has grown more than 6 per cent in 2012 compared with 2011 because of an increase in paddy rice fields in the last season, according to data from the Ministry of Agriculture released yesterday'.

So production is growing faster than (official) exports ...
The competition (Cambodia Daily, Jan. 18) has another twist on the story of slow expanding exports:

'Milled rice exports were “more than 200,000 tons,” Mr. Sarun [Agriculture Minister] said, without giving an exact figure. “Our exports have increased compared with 2011, but only slightly,” he added, pointing to the widely held expectation in 2012 that the flooding of the previous year, which destroyed swaths of rice paddy and drove up prices, would  be repeated.

In July, Prime Minister Hun Sen predicted that, as 2012 was the Chinese year of the dragon, there would be “big floods.”

“All of the rice millers and farmers thought that there was a huge flood coming, so rice millers did not export because they thought that the price of rice in the country would be high,” Mr. Sarun said'.

They seem to point out that due to possible price rises in the Cambodian market, millers reverted to storing their produce rather than exporting the produce.

It further includes this: 

'Yang Saing Koma, director of NGO the Cambodian Center for Study and Development in Agriculture, said the slow progress in exports of milled rice was more to do with Cambodia’s inexperience as a rice exporter.

“It’s a big goal, but Cambodia needs to learn,” he said, adding that more investment in rice mills and credit for farmers was helping.

Mr. Saing Koma also said that the price farmers had received for normal rice, as opposed to the more expensive fragrant rice, had fallen this year, from more than 1,000 riel, or about $0.25, to only 800 riel, per kg.

However, Mr. Saing Koma said the drop in price was more likely due to the international rice market rather than a surplus created by  rice millers hoarding their product.

“Normally, many Vietnamese come to buy paddy rice in Cambodia,” but last year, Vietnamese exports had fallen as India and Pakistan upped their output, keeping prices low globally, he said'.

So lessons are being learnt. But does that mean that short-cuts are a no-no? Or that hoarding doesn't pay off (sometimes)?

CEDAC itself though remains optimistic as it has found cash to invest in organic rice mills (Phnom Penh Post, Jan. 4). 
What is the difference with non-organic rice mills? A sound-byte: 

'Cambodia had an advantage over neighbouring countries with organic rice farming because its organic milled rice could be sold for $100 a tonne more than in neighbouring countries, he [Son Kounthor, president of the Rural Development Bank (RDB)] said'.

And there I thought that higher prices actually were a disadvantage ...

Unfortunatly ignorance is what policy makers believe in. A failed initiative set to take off? 

'He [Mao Thora, Secretary of State for the Ministry of Commerce] said the OPM would help to provide paddy-related information and help to provide some services to enhance the quality of farmers’ paddy, such as the establishment of dry ovens or enabling traders to gather at one place where the paddy’s price would be displayed'. 

Umm, so what is the difference? A better opportunity for the government to regulate (= not open) the trade and demand kick-backs? The Phnom Penh Post (Dec. 25) continues in this rather laughable article:

'Him Kortieth, communications officer at the Cambodian Centre for Study and Development in Agriculture, said the open paddy market was a new initiative but it was not really important for farmers whether the OPM was set up downtown or in the province because the cost of farmers’ transportation would be higher and they did not know the competitiveness of traders.

Kortieth said the real challenge for farmers was the fact that the government lacked capital to buy their paddy rice output, resulting in traders from other countries  dropping the price of local paddy rice.

He said Cambodian farmers had no choice but to sell out their paddy rice because they needed money to support their families'.

Response

The Bangkok Post (Jan. 24) reports Thai rice exports dropping to a dramatic 12 year low. 

The government remains optimistic:

'The ministry believes that Thailand will export over 500,000 tons rice by the end of this month, thanks to the upcoming Chinese New Year Festival; when people stock up on rice for the New Year occasion. Judging by the rising volume, the ministry anticipates Thailand’s rice export to be over 8.5 million tons by the end of 2013, compared to 6.9 million tons last year'.

Well, maybe the government can wait and tell it's shareholders (the public in general) that everything will be allright, but Thai rice exporters don't have the same opportunities. No deals means the need to look for other sources of income. The rice exporters lament (Nation, Jan. 17): 

'Last year was the poorest on record for Thai rice exports and this year could be even worse due to high prices under the pledging scheme, which has ruined Thai rice's competitiveness in the world market.

"The more exporters take orders, the more they incur losses. Rice trading is now considered a 'sunset' industry because of the high costs, low margins and intervention by the government," Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said last week.

According to the association, exports of Thai rice, excluding white rice, plunged by 39 per cent last year to 5 million tonnes from 8.2 million tonnes in 2011. Jasmine rice was 1.8 million-1.9 million tonnes. Total exports reached 6.9 million tonnes last year, compared with 10.5 million tonnes in 2011. Many exporters told The Nation (Jan. 14) their volumes and incomes dropped by an average of 20-30 per cent in 2012 and their performance this year would decline further because the high subsidy scheme has been extended'.

The once profitable rice export sector is now struggling and having to seek other ways to make ends meet. Example: 

'The survey found that exports of Asia Golden Rice Co, one of Thailand's biggest exporters, declined from 1.9 million tonnes in 2011 to 1.19 million last year. The company has struggled to retain its customer base by trading rice from other countries such as Vietnam and Pakistan'. 

Note what the association itself stated six months prior: 

'Somkiat Makcayathorn, who sits on the association's board, said Thailand was now entering the final phase of the rice industry's failure, with exports falling continuously and rice-quality development having been ignored.

Meanwhile, rice in the government's stockpiles is deteriorating in quality and it is inevitable that Thailand will soon face huge losses when it releases the stocks, he said'.

Surprisingly (or not) the rice pledging system is driving the Thai exporters out. The Phnom Penh Post (Jan. 24) notes that CP Intertrade (just one of the CP companies, involved with promoting hybrid rice in Thailand) will invest in Cambodian rice mill. Twenty million $  might be invested.

Even the World Bank are worried about the pledging (Nation, Dec. 20):

'The World Bank has expressed concern over the government's rice-price support scheme due to its high cost and large losses, while predicting that the global prices of rice and rubber - both major Thai export commodities - will likely fall next year'.

Meanwhile ..., Johnson & Johnson to produce their own palm oil in Thailand? So states the Nation (Dec. 23): 

'Johnson & Johnson, the world's leading health care company, won the purchasing deal of RSPO certificates under the Book and Claim system* from Thailand's four independent oil palm smallholders' groups, the first in the world to be certified with the RSPO standard. Through the purchase of the RSPO certificates, direct support is provided to small scale farmers and sustainable palm oil production'.

Peppered up
Other commodities from Cambodia. 

• It seems  pepper is on the up:

  'Kampot pepper yields are expected to increase significantly in the first harvest since gaining Geographic Indicator status in April 2010, as increased demand from exporters drives up prices. Output this season is expected to surge by 17 per cent, from 23 tonnes in the last harvest to an estimated 27 tonnes this season'.

  What's more pepper prices are also going up, a double whammy? 

• The Phnom Penh Post (Jan. 2) also mentions coffee production gains in Mondulkiri. 
• Phnom Penh Sugar opens it's factory (PPP, Dec. 28). 
• The Phnom Penh Post (Jan. 25) has an article on Cambodia's prospectives  on future corn. This as a reaction to the Thai authorities opening up their borders to imports from both Cambodia and Lao. Though the choice of the article is interesting, they fail to capture what it really means for the Cambodia corn growers. On the other hand a promise is just that, a promise. So if prices will rise, the Thai will import. Will they drop, then the borders will be closed. It's a bit of a gamble. Why shouldn't Cambodia produce it's own animal feeds?

Agenda
Finally back to subject, hybrid rice. 
IRRI tries to set the agenda by giving an overview of the state of GM rice (Jan. 8). It notes that it doesn't want to polarize the discussion, but seems very keen to enable GM rice techniques. On the one hand it mentions that GM rice despite decades of research still has not produced a commercial viable variety. It does however mention that GM research must be done to meet farmers demands:

'IRRI’s approach to its GM rice R&D is based on a premise that genetic modification has the potential to safely deliver to rice farmers and consumers a number of benefits that cannot be achieved through other breeding methods'.

On the other hand the high tech involved will ultimately mean that if higher producing varieties are released (or varieties with much better financial returns), the rice seed sector will wield the power over the rice trade. From the hybrid sector we have discovered that often enough commercial companies involved are less scrupulous, so why this would not be the same for GM rice?

Interetsing is to see the following quote:

'“This is exactly the sort of innovative scientific research that the [UK] Prime Minister was calling for at the Hunger Summit at Downing Street,” said Lynne Featherstone, UK Parliamentary undersecretary of state for international development. “This new funding will enable IRRI to begin producing prototypes of this ‘super rice’ for testing. This could prove a critical breakthrough in feeding an ever-growing number of hungry mouths.”'

It just proves that poor informed policy makers are not limited to just Cambodia. Hungry mouths are not increasing, nor are they benefited with more rice. Most hungry mouths are rural producers with insufficient land or opportunities to expand their produce. Higher productivity only means lower prices, hitting smaller producer more. Higher prices on the other hand correlates to more production ...

An interesting blog entry on hybrid rice and Dutch agri bank Rabobank. It notes how this bank is getting involved in promoting hybrid rice in India, where it stresses that productivity increases by 15-20% but fails to mention the downside, i.e. the need for increased groundwater use. The sole reason for promoting hybrid rice is to promote big business: bigger is better for shareholders.

Funnily (or not) a quote from Yuan Longping:

'Yuan said squandering food was unforgivable, especially because China had to pull out all stops to provide enough food for its 1.3 billion people due to its limited arable land. "It was difficult to improve rice's output, but after we did we found the food was being wasted," he said'.