Ambitions
Lagging world market upward price moves have stalled the ambitions of Cambodian rice exporters, so it seems. At least for the mean time.
The Khmertimes (Jun. 28) notes how all the goals for massive exports of rice from Cambodia have not and / or will not be achieved.
'Cambodia’s ambitious goal of exporting one million tons of rice this year has been quietly dropped. A follow-up export goal of 600,000 tons also is falling by the wayside.
Undermining these goals is the reality of the rice paddies: labor emigration to Thailand, high costs for milling, and spreading bankruptcies among small rice farmers. This is the view of two experts affiliated with the Cambodia Rice Federation, the leading industry group'.
One tell-tale sign is the inability of Cambodia to compete. Phnom Penh Post (Jun. 23):
'Following Cambodia’s loss of a hefty Filipino rice tender to Vietnam last week, industry insiders say logistics and production costs are hampering the competitiveness of the Kingdom’s rice exports.Cambodia lost a 100,000-tonne tender for the fourth time running after its final price of $455.50 per tonne came in way higher than the Vietnamese company’s final $416.85 per tonne deal, itself only marginally lower than Thailand’s $417'.
How does the government take the news?
'Mey Kalyan, senior adviser to the Supreme National Economic Council, said the government was working on improving transport and further “rationalising” the rice sector by focusing on higher-margin varieties, such as jasmine rice.Although agreeing that export costs were high compared to region, Kalyan said the loss of the Filipino rice tender was in large part due to the Phillippine’s traditional reliance on Vietnam for large quantities of cheap rice.Kalyan added that stubborn global rice prices – which have not budged significantly since the global commodity boom ended in 2008 – further held back profitability.“The prices are stable, but the cost is higher.”
In fact rice exports from Cambodia to Europe are stable at least based on annual figures. The Phnom Penh Post (Jun.
20) compares these with those from Burma which seems to see surges in exports
to the EU. Their exports are now just 10% behind those of Cambodia.
Briefed
The Phnom Penh Post reports (May 28) on unethical rice trading and how the Cambodian government is seeking to crack down on these practices.
'The Ministry of Commerce (MoC) is ramping up its efforts to stamp out “unethical” rice exporters mixing their produce with rice from neighbouring countries, as the European Union becomes increasingly concerned about rice tampering.In an open letter issued on May 11 the ministry said it will stop issuing Certificates of Origin to exporters found to be using non-Cambodian rice, as this could lead to the European Union withdrawing its duty-free trade preferences that Cambodia enjoys under the Everything But Arms agreement....“MOC will have a group of inspectors who will launch surprise inspections in rice exporting companies and rice millers to investigate the issue,” the letter added'.
A big surprise (Phnom Penh Post, May 29):
'The long-awaited Agricultural Extension Policy, rolled out yesterday by the Agriculture Ministry, will focus on making up-to-date knowledge and technology accessible to farming communities and increase efficiency and productivity in the sector'.
Going
by evidence of other countries in the region having no extension
service means savings in national expenditure while the perceived public
goods supposed to be dispensed are all too often seriously lacking. Or
the extension service itself is a government run business preying on
farmers ...
'At least 2,000 additional agricultural-extension specialists will be needed to fill the gaps in human capital. Currently, there are only 70 agricultural-extension officers at the national level and less than 1,000 at the provincial level, Soeun said'.
Creating another base for bureaucracy, cleptocracy and vote buying. Cambodia is better off without a formal extension service.
Mekong Oryzae has an opinion article on their website. The May 25 published piece is from Riza Bernabe who is the policy coordinator and Maya Quirino, the media, advocacy and communications lead, both of Oxfam’s GROW campaign in East Asia.
In the article they argue that climate change is undermining the viability of the current agricultural system which they say depends to a large amount on small scale farmers often reliant on small areas of riceland for their survival. It then notes evidence of the change and it's possible effects. What to do?
'ASEAN must duplicate sustainable agriculture and agro-ecology practices across the region. One such program is Systems of Rice Intensification (SRI), which optimizes harvests without depleting soil nutrients, and uses rice varieties that can withstand floods or droughts. SRI is already gaining ground in Cambodia, Vietnam and the Philippines. Women, who are also food producers, must be included in these programs. Women are often mistakenly not counted as economic actors, and are therefore left out of development projects'.
Pity that not more is made of possibilities to adapt to changing climate. Floods seem fine enough, certainly as they come with increased fertility afterwards. Droughts though call for different directions. Water storage? Irrigation? No mention is made of either ...
The current El Niño weather patterns will contribute to more drought conditions, certainly in the upcoming rice season. However the rice industry seems to think that expected lower production will not make much difference in the short term for prices (Bangkok Post, May 27):
'The "price is weak short term, in three to six months, because of Thai stocks and competition among major exporters," The Rice Trader's Mr Zwinger said in an interview on May 21. "The market today is more concerned on Thai stocks than El Nino."
The weather spells more problems as farmers expect assistance in face of adversity. Bangkok Post (Jun. 29):
'Farmer leaders have slammed the government for not doing enough to help farmers as the drought crisis continues to hit several provinces nationwide, increasing pressure on the "backbone of the country"already struggling with debt'.
Meanwhile Thai authorities are hoping to sell a fair share of their stocks of rice. The Bangkok Post (Jun. 6):
'The government plans to call bids for another 2.6 million tonnes of high-quality rice from state stocks between now and August while transferring low-quality and substandard grains to the industrial sector'.
They also note that exports are down by nearly 10% this year ...
On the 5th of June (Bangkok Post) the Thai government (slash army) decided how to rid itself of unwanted grain:
Basically it means going to the dogs ...'The Thai government may sell most of its stockpiled rice to ethanol and animal-feed producers because it's no longer fit for human consumption'.
More losses
In the roundup of Cambodia's other agricultural news we first start with looking at turning cassava into electricity. I doubt whether with current energy prices this makes sense, but obviously investors are making different calculations. Phnom Penh Post (Jun. 3):
'A planned biomass plant run on cassava in Battambang province looks ever more likely after a trial period with 100 farmers was successfully completed.Idemitsu Oil and Gas signed a memorandum of understanding (MoU) with the Ministry of Agriculture, Forestry and Fisheries and the Cambodia Mine Action Centre (CMAC) in 2012 to explore the development of biofuels in Cambodia'.
They seemed to have done their homework.
Other investor news (Phnom Penh Post, Jun. 1):
'Tokyo-based conglomerate All Nippon Airways Trading (ANA) is in talks with the Mong Reththy Group (MRG), to establish a banana plantation with plans to export to Japan, the Cambodian agriculture tycoon said on Friday'.
A great alternative (Phnom Penh Post, Jun. 25):
'Exports of Kampong Speu palm sugar with geographical indication status increased sharply this year thanks to growing demand from South Korea and France, according to a representative of the Kampong Speu Palm Sugar Promotion Association’s (KSPSPA).According to KSPSPA president Sam Saroeun, exports of Kampong Speu palm sugar reached 75 tonnes this year, an increase of 50 per cent compared to the same period last year'.
In other developments blame biofuel growing for power politics resulting in loss of access to agricultural land. The Phnom Penh Post (Jun. 6):
'Houy Mai has lost everything to the global demand for cheap sugar and biofuel. The 54-year-old mother-of-eight has fought a years-long battle with Mitr Phol, Asia’s biggest sugar producer and one of three major suppliers to Coca-Cola....In March, the government issued a decree that cancelled Mitr Phol’s concessions, covering about 20,000 hectares – almost two times the legal limit....But the area now swarms with soldiers who have taken over numerous sawmills...Three of these large sawmills were operating last week, with soldiers lounging in hammocks aside towering piles of sawn lumber, waiting for military trucks to arrive at night and cart the precious wood to a drop-off point near the border, from where NGOs Action Aid and Oxfam allege it is smuggled into Thailand and processed into sleepers for railroad construction'.
The
article tells the familiar tales of woes of how farmers are left (literally) in the
gutter. Not even hope. A very insightful article.
Going analog
And then this to worry about.
Basically it's going to the dogs as they say ...
It looks like rice but it's not. Jakarta Post (May 31):
'... analog rice was a food commodity that looked like normal rice but was made from all kinds of tubers, making it suitable and safe for consumption...The INDEF economist said a number of parties had reportedly attempted to hamper the development of analog rice as they were concerned the newly discovered staple food would disrupt consumers’ dependence on rice.“Once analog rice enters markets, people’s dependency on rice will be disrupted. This poses a challenge to certain parties. With the current synthetic rice issue, people are really worried. What happens now is that people cannot differentiate between synthetic rice and analog rice,” said Enny.She said once the synthetic rice issue contaminated the mindset of consumers, it would be difficult for researchers or any parties supporting the development of analog rice to introduce their discovery to the people.“In such situations, people will just keep it in their minds that analog rice is not ‘original’ rice. They will not pay attention to whether or not analog rice is suitable and safe for consumption,” said Enny'.
It seems to be a very Indonesian issue, little is known beyond the archipelago.
