As could be expected rice prices dropping tend to affect the rice industry itself rather than farmers directly. At least initially. And the current slump in prices is no difference, not in Cambodia.:
Disturbing news. Phnom Penh Post gives voices to the not so satisfied rice industry (Mar. 3):
'A newly formed coalition of rice millers and exporters has raised alarm bells, forecasting the imminent “collapse” of the nation’s rice sector within two years and blaming in part “governance failure” by the industry’s apex body'.
Infighting?
Not for long though. The Cambodian Rice Federation has got the message (Phnom Penh Post, Mar. 10):
'Responding to criticism, Cambodia’s apex rice industry body announced yesterday that it would submit a plan to Prime Minister Hun Sen that addresses two of the major challenges facing the Kingdom’s rice sector – competition from rice imports and access to finance for millers.The Cambodia Rice Federation (CRF), which has come under fire from members critical of the direction in which the nation’s rice industry is being steered, will ask the government to make it mandatory for rice importers to have licences, and ask for its help in facilitating low-interest loans for millers, the federation revealed at a press conference yesterday'.
The Khmertimes (Mar. 17) has a similar article on the problems the Cambodian Rice Federation will put to the government:
'Two main issues will be put to the government when it holds an urgent meeting with the Cambodia Rice Federation (CRF) next week – a special fund package to help millers and exporters and a ban on imported rice from neighboring countries.
...
The special meeting was set up after complaints from the CRF outlined problems with a lack of funds to support production, imported rice from neighboring countries, the high cost of production, the high cost of logistics, the high cost of electricity, a lack of water, finding good seed stock, a lack of farm labor due to immigration and limited infrastructure and port storage facilities. The CRF claims that about 40 percent of the small- and medium-sized rice millers and exporters are close to stopping production and going bankrupt'.
The response of the government (Phnom Penh Post, Mar. 18):
Let's see what the government can come up with ...'The Commerce Ministry has created a special taskforce to study challenges threatening the sustainability of the nation’s rice industry and will report its findings within two weeks, a ministry official said yesterday'.
Piloting
Besides the above (the main newsworthy items on rice production in Cambodia) what else topical has made the press?
The Phnom Penh Post (Mar. 1) looks at the findings of an insurance programme on rice crops:
'A pilot project that offers micro-insurance to help rice farmers cope with the risks of flooding and drought is looking to build on the success of its first season by scaling up beyond three existing provinces. The Cambodia Micro Agriculture Insurance Scheme (CAMAIS), launched in the second half of 2015, aims to support local smallholder farmers by providing insurance payouts to those affected by severe weather-related events attributed to climate change. Rice farmers who join the scheme pay an insurance fee at the start of the growing season based on the size of their farm, type of paddy grown and technical tools used. In return, they receive consultation on farming techniques and get an insurance payout if their crop is damaged either by flood or drought....According to Youssey [project manager of CAMAIS], 153 agricultural families joined the micro-insurance scheme during its first season, paying a total premium of $1,230 to insure 136 hectares of rice farms. At the end of the season, roughly 80 per cent of this collected capital was used to settle farmers’ claims, with the rest used to cover operational expenses and commissions for agents.Around half of the rice farmers that purchased the crop insurance made compensation claims based on varying amounts of crop damage; however, only 52 of these claims met the criteria for receiving compensation, Youssey said'.
A lesson for all.
The Phnom Penh Post (Mar.
1) looks at the business of groundwater pumping. It's an increasing
practice, exacerbating problems now the rains have been so poor.
'Extensive groundwater irrigation jeopardises access for shallow domestic water supply wells, raises the costs of pumping for all groundwater users, and may exacerbate arsenic contamination and land subsidence that are already widespread hazards in the regio, ...'.
On a sideline the Bangkok Post (Mar. 2) has one answer to the Thailand's water shortages: include local say of water management.
Tractor politics as presented by Phnom Penh Post (Mar. 16):
'Local tractor dealers have reported strong sales of new equipment. Ngorn Saing, CEO for RMA (Cambodia) Co Ltd, exclusive local distributor of John Deere tractors, said his company sold about 300 tractors last year, a 30 per cent year-on-year increase. He projects similar growth in the coming year as farmers increasingly turn to mechanised farm help'.
Much
is made of how tractors are assisting rice production. However it's
probably cassava growing that's really pushing the sales. After all
besides harvesting, there's very little use for tractors in small rice
fields.
Sparks
Italians are afraid that
Vietnamese interests will seek to grow and export rice from Cambodia
bound for Europe using Cambodia's easy (and less costlier) access to the EU (Risoitaliano, Mar. 19).
The article somehow makes a connection with what's coming from the Vietnamese press. Vietnamnetbridge (Mar. 10):
'However, Cambodian exporters can sell rice to the European market. The EU is the biggest consumer of Cambodian rice.
Why can Cambodia sell rice to the EU, while Vietnam, the second largest rice exporter in the world, cannot?
According to the Commercial Affairs Division of the Vietnamese Embassy in Cambodia, Cambodian businessmen can export rice to the EU because they can enjoy preferences'.
That said, the same source, 4 days later, warns of the threat posed by Cambodia as it gets better access to China. Though hardly having an impact on Vietnam's ability to export. So maybe not such a good source of info ...
The Mekongcommons
(Mar. 17) has an extensive article on organic rice farmers in Surin,
Thailand. Touching on the System of Rice Intensification and coping with
climate change, it's a very read worthy article on pressures faced by rice
farmers in the region and how to cope with these pressures.
The Bangkok Post (Feb. 27) notes that the recent auctions of rice are doing well.
And again, the Bangkok Post (Mar. 11) looks at the government programme of weaning Thai farmers off rice:
'Ms Prapatpon, 48, returned to school last month for a state-funded training programme designed to wean farmers off water-intensive rice and teach them how to grow other crops.....Going back to school was meant to give farmer ms Prapatpon fresh ideas and new strategies for survival on her farm in Chai Nat province. Instead, she said: "I can't apply any of this."....For farmer-turned-student Chaiyapoj Phak-on, the past two years have been a harsh contrast to the heady days of the previous government's income-propping rice-buying programme, which he called "the best time of my life."
As usual there's more to be reported on politics and rice growing in Thailand. The Thai junta is in favour of an open society. As long as it toes the junta's line. From the Asian Correspondent (Feb. 24), this is the full article:
In similar vein: trying the tried. The Bangkok Post (Feb. 26) has a wide article exploring all what's wrong with Thai agriculture and trying to put the blame with one person.'THAI Prime Minister and junta head Prayuth Chan-ocha lost his temper at a Reuters journalist at Government House today, apparently over the news agency’s recent interview with former Thai Prime Minister Thaksin Shinawatra.The reporter asked Prayuth about the cost of the damage of the rice-pledging scheme, which was implemented by the previous government under ousted Prime Minister Yingluck Shinawatra – Thaksin’s sister.Prayuth said the number had not been finalized yet and would be announced later.Then sparks flew.“Why? You really want it now? You must tell Reuters to say [write] better yesterday [Tuesday],” he snapped, according to The Nation.He then abruptly left the podium for his upstairs office'.
Oddly it's the Thai Rice Exporters Association which is assisting with the accusations that the previous government sold rice to China at lower prices than pledged, then stocked the rice and re-pledged it again to itself.
Surely those accountable would be brought to court, why than use it to blame just one person?
Something different. Riceberry? That's the name given to (mostly organic) dark rice. Thailand rice exporters:
'Rice Berry is a cross-bred unmilled rice possessing dark violet grain, which is a combination of Hom Nin Rice, with well-known antioxidant properties, and Thai Hom Mali Rice, also known as Thai Jasmine/ Fragrant Rice or KhaoDawk Mali 105. Rice Berry contains three times more iron than other varieties. And not only does it contain a high level of antioxidants such as beta-carotene, gamma oryzanol, vitamin E and folic acid (folate) in itself, it also becomes soft and is aromatic when itโ€™s cooked, which is the outstanding trait of Thai Hom Mali Rice'.
The Bangkok Post (Mar. 1) has a recent vdo on growing and market possibilities of riceberry.
Silde
It may be marginal news, but it's impacts are to be huge. We are talking about the Regional Comprehensive Economic Partnership (RCEP).
What is the RCEP? It supposed to be Asia's answer to the US-lead TPP. Does it serve the interests of Asian farmers? Grain.org (Mar. 17):
'Hot on the heels of the TPP, it is clear that RCEP will restrict seed saving and seed exchange at a time when, under the extreme pressures of climate change, farmers need more diversity in their fields, not less. Furthermore, it could increase their dependence on external inputs and raise their costs of production. Opponents of RCEP say that the trade deal could triple the current price for seeds.[iii] Trade agreements like RCEP should not give corporations monopoly rights over seeds, prevent farmers from saving seeds or promote GMOs—but that is what they do. These agreements are inherently biased towards the interests of corporate and political elites'.
That does not bode well for the future of small and sustainable (rice) farmers in the region.
Sam Mohanty on IRRI.org discusses rice prices and the dwindling of global rice stocks (Feb. 22):
'Despite the current stability in the rice market, there are reasons for concern about the direction of the market in the medium term (mid- to late 2016). The rice stocks of five major exporters (India, Thailand, Vietnam, Pakistan, and the United States) continue to slide since reaching a peak of nearly 41 million tons in 2013 (Fig. 1). According to USDA data, the biggest drawdown of stocks in these countries is underway this year, with a 40% drop from last year, to reach 19 million tons by late 2016'.
A lot of this stock selling has come from Thailand
which, in hindsight, has been providing the global market with a hoard of
rice enabling prices to stabilize: public goods used for the good of the
public.
Naturally, the Thai government has seen little return on their
stocks and it could be expected that they would dwindle away. Has any
other entity stepped forward to possibly avert a rice price explosion?
No.
He
concludes:
'With limited Thai rice stocks in the warehouse, it remains to be seen how major exporting and importing countries react to such uncertainty [causes of climate change and/or El Niño]'.
One worrying impact for the
immediate future: farmers in Southeast Asia will not be able to step up
to the plate if prices rise due to drought. The lack of water impedes any potential to expand production.
So what about farmers
elsewhere?
But looking at this in the longer term, things look better than before the
2007 rice price explosion. The market is not dictated by Thailand (Vietnam and India have a substantial role), there
are more upcoming exporters (Cambodia / Burma) and major importing
nations such as Indonesia and the Philippines have better domestic
responses.
Cuts
Phnom Penh Post (Mar. 15) has been tallying sugar exports and reveals that in line with expectations, Cambodia's exports to Europe will disappear:
'New figures show that Cambodia’s sugar exports to the European Union fell by 94.8 per cent between 2013 and 2015, amid accusations of rights abuses and land grabbing in the Kingdom’s industry....Meanwhile, Am Sokha, case coordinator at the Community Legal Education Centre, which is also a member of the NGO coalition, said the trade decline sent a clear message to the Cambodian industry to clean up its act'.
On the plus side. The drought in Southeast Asia is pushing global sugar prices higher (Bangkok Post, Mar. 10). That said with the drought there's little opportunity to raise output to take advantage of higher prices.
'Thailand is seeking to boost sales after prices tumbled to an almost seven year low in January as slowing economic growth in China weakened demand from the biggest consumer. Along with Indonesia and Malaysia, Thailand agreed this month to cut shipments of natural rubber. Thailand has also agreed to buy rubber from growers at above-market prices'.
So with this concerted effort to protect rubber producers, it comes as no wonder that rubber exporters in Cambodia also receive assistance.
Wrong.
Wrong.
The Phnom Penh Post (Mar. 7):
'Rubber producers said yesterday the government’s decision to amend the export tax scheme on natural rubber fell short of expectations and would do little to stem the losses of farmers as rubber prices hover near a six-year low'.
At current prices, the tax amounts to a 5% levy, thus leading to pricing out of Cambodia's market.
Worse as reports the Phnom Penh Post (Mar. 17):
'Cambodia's rubber industry’s woes have begun to crystallise after two major rubber plantations announced deep losses yesterday, attributing their downturn to high production costs and a drop in global rubber prices'.
In the meantime the past measures announced by Thailand seem at least in the short term to have pushed prices up, so reports the Bangkok Post (Mar. 7). However the short term gains may well lead to long term losses.
Cassava is leading the way. The Phnom Penh Post (Feb. 23):
'The tonnage of Cambodia’s agricultural exports increased by over 20 per cent last year, led by a surge in shipments of dried cassava chips, according to the latest Ministry of Agriculture data.Total exports of 66 raw and semi-processed agricultural products – chiefly cassava, rice and rubber – amounted to 4.1 million tonnes in 2015, compared to 48 products with a total of 3.4 million tonnes a year earlier, the ministry said in its annual report on agricultural production....Hun Ly Heu, director of cassava-exporting firm Drycorpkh Cambodia Co Ltd, said the fact that more farmers were selling their cassava despite falling prices was a sign of their desperation.“Our market depends on orders from neighbouring countries and farmers could not wait for cassava prices to rebound due to their loan commitments,” he said, calling for the government to support farmers by setting a price floor on agricultural products'.
Bust to boom
Land politics in Laos: the case gone banana's. From the Southeast Asian Globe (Feb. 10) which reports on the province of Bokeo:
'“The Chinese are renting 1,600 square metres of land for the equivalent of between $300 to $600 per year, which is roughly what the farmers would earn from this area if they cultivate the land. So they get the same amount but don’t have to work,” says Sompavong.However, such deals always have their negative sides. For instance, the concession contracts usually do not specify that the investor has to clean up the land – often rice paddies – and return it to its previous condition after the contract ends'.
However it's the accompanying massive use of pesticides which is proving a headache.
'Then, at the end of September, the Ministry of Agriculture and Forests warned four Chinese companies for “excessive use of pesticides” and ordered inspections on the types and amounts of chemicals used at some of the banana plantations. The revocation of business licences was threatened if laws continued to be contravened'.
This comes hot on the heels of another China induced crisis in northern Laos: that concerning rubber plantations. These plantations mostly seem to be a proxy for China land acquisition.
Now with rubber prices hardly worth tapping the trees, banana's are seen as the way forward. But at the same unfair economical advantages such as buyers monopolizing the crop (as the crop can only get imported to China) local government collusion, etc.
A good starter on what's wrong in the north of Laos needs heed and read the recent study Falling Rubber Prices in Northern Laos: Local Responses and Policy Options.
Now with rubber prices hardly worth tapping the trees, banana's are seen as the way forward. But at the same unfair economical advantages such as buyers monopolizing the crop (as the crop can only get imported to China) local government collusion, etc.
A good starter on what's wrong in the north of Laos needs heed and read the recent study Falling Rubber Prices in Northern Laos: Local Responses and Policy Options.
