Misguidance

It's been a while since I've highlighted hybrid rice as such, let alone the possibility of this growing in Cambodia. However it's the Asia Sentinel (Apr. 5) which tears into Cambodia's lack of political will to push the sector further:

'It may be only a matter of time before Cambodia’s rice industry disintegrates, partly as a result of a weak Cambodian Rice Federation and partly because of misguided government policies'.

It seems a pretty harsh critique, but the author of the article does seem to know what he's talking about. He then gives the following as evidence:

'The industry’s main players from the private sector must stand up to play a role in improving the industry in the face of a new problem. It has been reported that the Ministry of Agriculture has been testing a strain of low-quality but high-yield hybrid rice for export.  

...

There are two dangers in the government’s experience through the Ministry of Agriculture. As the industry runs through the testing process, without strict controls –which the government appears incapable of – hybrid pollens are certain to be spread rapidly kilometers away from the test zones, carried by the wind and insects or rodents.  Hybrid cultivation would very likely eradicate Cambodia’s high-quality Rumdoul and Sen Kra Ob varieties for good. Destruction of the native species from hybrids is likely.

Low-end hybrids recommended by the government would put Cambodia at a disadvantage to Vietnam. Our market positioning should be at the high end. Going along the hybrid route would simply spell disaster and if such news is true, it shows that our Agriculture Ministry policymakers do not fully comprehend the implications of such a policy blunder. Recommending the use of hybrid rice for Cambodia is wrong'.

Wrong it may be, but that's never stopped the establishment from pushing their own agenda.

Take for instance the Green Revolution which is yet to be continued and some would argue that this (the second Green Revolution staying away) is a plus for the globe's many small farmers.
However that's not going to stop the ambitions of for instance the IRRI. It has now (Apr. 7) got Green Super Rice (GSR) in the pipeline to address the future. The news item has suspicious little on detail. If one clicks on, one would discover that

'GSR varieties are a mix of more than 500 promising rice varieties and hybrids'.

Hmmm, there seems no stopping hybrid rice advocates.

Strengthening the struggle

One can't fail the Cambodian government for tinkering it's policies here and there. The Phnom Penh Post (Mar. 31):

'The government has decided to strengthen entry points along Cambodia’s borders to block illegal rice imports, while promising to dissolve any company’s certificate of origin that is caught mixing contraband rice for export, Cambodian Rice Federation (CRF) president Sok Puthyvuth announced following a meeting yesterday with Deputy Prime Minister Kheat Chhon.

Additionally, the government will scrap the value added tax (VAT) on imports of rice milling machinery – a move aimed at reducing millers’ high capital costs'.

The Cambodia Daily reports on the same but focuses more on the role of the VAT waiver. From Mekongoryza:

'The government decided to drop a 10 percent value added-tax (VAT) for rice products during a meeting on Wednesday between representatives of the rice sector and government officials at the Council for the Development of Cambodia in Phnom Penh, officials said.

...

Sam Arth Veasna, vice president of Federation of Cambodian Rice Farmer Organizations for Development, welcomed the government’s decision.

“Even though it is not a big offer, I think it would make farmers and rice millers feel better,” he said. “However, I cannot assess how much better.”

However bad news was on it's way, despite these measures being announced. The Phnom Penh Post (Apr. 6):

'After two promising months, Cambodia’s rice exports fell by 14 per cent year-on-year in March, according to new data by Ministry of Agriculture, sparking fears amongst rice millers that export shipments would further decline without adequate financial backing.

....

Rice millers said yesterday that the drop was evidence that the industry is struggling with the cost of production, high electricity bills and a lack of finance to purchase and store paddy rice.

...

While last Thursday the government agreed to cut the value added tax (VAT) on imports of rice milling machinery and step up border patrols to crack down on illegal rice imports, there has been no agreement on the facilitation of $250 million in soft loans to proposed by the CRISIS group to ease the financial burden on millers'.

Plans

The Bangkok Post (Mar. 31) reports on expectations that Thailand will be able export 9,5 million tonnes this year. Despite writing the government is upbeat, this target would represent less tonnage than last year and at a much lower value, at least so it looks like.

What's wisdom? The Thai government has announced a 60 day rice sell-off blitz? The Bangkok Post (Apr. 26):

'The government plans to sell all 11.4 million tonnes of rice in government stockpiles within two months for 100 billion baht, the country's rice management board, starting next week. The plan announced Monday is unprecedented in Thai export history - selling off more rice in two months than the country usually sells in a year. Average rice sales over the past couple of decades have been about 10 million tonnes. 

.... 

Traders were sceptical Monday about the government's ability to sell off remaining stocks in just two months. Supachai Vorraapinyaporn, president of Tanasan Rice Group, the third largest rice exporter, said the government's target of offloading the rice within two months was not possible. "This is a million percent impossible, considering that previous auctions were monthly, and only around 400,000 tonnes," said Mr Supachai. "Perhaps they meant two years, not two months," he added'.

Does the Thai government know something we don't? Surely prices are low. But what with El Niño in full swing one might expect less output from Southeast Asia and India, thus higher prices .... 

It does spell lower prices in the short term if it does indeed succeed in selling off virtually all their stock.

One to suffer will be Cambodia. The Khmer Times (Apr. 24):

'Cambodia Rice Federation (CRF) vice-president Hun Lak told Khmer Times yesterday the pledge by the Thai government to release so much milled stock so quickly would push the global price lower and have an indirect impact on Cambodian exports'.

But the junta has more bad news for it's farmers. The Bangkok Post reports (Apr. 22) on a communist approach by the junta to rice growing. 

'Commerce permanent secretary Chutima Bunyapraphasara said the area to be cultivated was set by a meeting of the committee planning for integrated rice cultivation.  

The Agriculture Ministry would announce the target zones for rice growing next week, along with planting dates'. 

It's unclear whether or not the junta will dictate the rains. But I assume that these will be just as difficult to line up, as will I believe the rice growing farmers. Will they outlaw rice growing outside these target areas? 

Another plan to show how incompetent the junta is.

Rebound

Another victim of El Niño is Thai sugar production. The Bangkok Post (Apr. 1):

'The El Nino weather phenomenon has played havoc with crops across Southeast Asia and beyond. Thailand, the world's second-largest sugar exporter, will ship 20% less of the sweetener to international markets this year than last, and farmers fear the damage already inflicted on young cane plants could make next year worse.

...

They are part of a growing number of rural Thais struggling with debt. Most are rice farmers, who were hit hard when the military seized power in 2014 and ended generous subsidies. The irony for some in Ratchaburi is that they have taken a double hit: They were encouraged to convert to sugar from rice as the government sought to cut subsidy reliance and reduce massive rice stocks. As epected prices will rise so not all bad news'.

Interestingly from Cambodia the report that palm sugar is going strong. The Phnom Penh Post (Apr. 1):

'Demand for Kampong Speu palm sugar has surged, with orders already up 70 per cent this year, as appetite for the premium organic sugar product grows, boosting its price.

Orders for 260 tonnes of the palm sugar have been placed this year, compared with 150 tonnes in all of last year, and despite its market price climbing to $1,400 per tonne, about $50 more than in 2015, Sam Saroeun, president of Kampong Speu Palm Sugar Promotion Association (KSPSPA), said yesterday.

The Lao authorities report on opportunities for cardamom growing. The Vientiane Times (Apr. 4):

'Many local farmers in Phongsaly province are shifting to plant cardamom after earning lucrative income from growing this crop and selling it to Chinese traders.

...

However most villagers are very concerned about the fluctuation of the cardamom market, particularly when more people move to grow this crop as the prices might go down.

A painful lesson has been learned by farmers who grew rubber and falling princes of rubber led farmers in many provinces of Laos to lose profits while some had to resort to destroying their trees to grow other crops instead'.

Meanwhile banana farmers are fearing worse. Vientiane Times (Apr. 20):

'According to a recent report in the Chiang Rai Times , workers at Hongta International, a Chinese-owned banana plantation in Chiang Rai province's Phraya MengRai district, have been tested and found to have unusually high levels of chemicals in their blood.

The Chinese firm leased about 440 hectares of land in Phraya MengRai district to grow Cavendish bananas before the PhayaMengRai Hospital was assigned to conduct blood tests on 43 of the plantation's 200 workers.

The test results showed the health of 10 of the workers' was at risk, while 13 already had unsafe contamination levels. 

...

A survey undertaken by NAFRI [National Agriculture and Forestry Research Institute] and unveiled on March 31 noted there were several reasons why Chinese companies wanted to establish banana plantations in Laos. One was the low cost of land leases, the second was low labour costs, and the third was the lax control of chemical use'. 

More positive news this time for rubber growers. The Phnom Penh Post (Apr. 29):

'A sharp rebound in international rubber prices has put workers at plantations in Cambodian back to work, and has infused the sector with a rare sense of optimism.

International rubber prices began rising in March from seven-year lows and have seen an upswing of 16 per cent since the start of April on concerns over output and expected pickup in demand from China'.

Finally, a short note from Thailand as to what they think about the possible TPP. The  Bangkok Post (Apr. 28):

'Farmers nationwide have threatened to organise protests against the government if it decides Thailand should take part in the Trans-Pacific Partnership (TPP) agreement'.

Alarm

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):

'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'.

Let's see what the government can come up with ...

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:

'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'.

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. 
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.

The Bangkok Post (Feb. 29) on rubber: 

'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.

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.