Voices

It's funny how relevant issues are not receiving the importance they deserve. One such issue are the new trade deals drawn up by the USA.

Relevant for the region is the Trans-Pacific Partnership (TPP) trade initiative which has recently been concluded; a new trade deal between 12 Pacific Rim countries. Regional signatories in this are Vietnam and Malaysia.

Problems are that it's not (yet?) clear what has been achieved (discussions were secret), though it seems to be a win for big corporations. This may well pave the way for hybrid rice production and trade to increase. 

For non-hybrid rice trade, it's expected that Vietnam will gain more favourable access to the U.S., while Japan manages to keep imports largely at bay albeit for some token imports.

Cambodia is not part of the TPP, though may well be affected especially where it comes to competing with Vietnam. The Phnom Penh Post (Oct. 7) looks at possible developments:

'Some exporters of Cambodia’s biggest agricultural crop also voiced concern over the new trade pact, suggesting it would limit their expansion into the US market.
Song Saran, CEO of Amru Rice, one of the Kingdom’s largest rice exporters, said Cambodian rice accounted for about 2 to 3 per cent of the US market last year. He said that while this represents only a small share of the market, the TPP would restrict any future growth.
“We are not affected by the signing of the TPP, as rice exports to the US are not big as compared to garments,” said Saran. “But it will be challenging to expand our market share in the US.”

Aggressive

Though there seems to be a slight hiccup, rice exports from Cambodia are on the up. Phnom Penh Post (Oct. 2):

'Rice exports fell sharply last month, but the Kingdom’s most important crop is expected to recover and end the year in positive territory.

...

However, September’s dip should have minimal impact on the Kingdom’s annual export tally, according to the UN’s Food and Agriculture Organisation (FAO). Direct milled rice exports between January and August were about 340,000 tonnes, nearly 50 per cent up compared to the same period a year earlier, it noted'.

Noted is that Cambodia is becoming more and more dependent on European and Chinese imports, areas where the Vietnamese have less bargaining value.
 

Cambodia Daily (Oct. 2) sees that the Cambodian rice players hope to exclude national cheaters from exporting: 

'The Cambodia Rice Federation (CRF) on Wednesday announced strict penalties for exporters who mix Cambodian rice with low-quality rice from other countries after receiving complaints that some exporters have been using the method to increase profits'.

It still seems that exploring rice niches may well be the way forward. Khmer Times (Sep. 30):

'Domestic rice millers are preparing to compete against their Thai rivals for a share of the US market as the European Union market becomes increasingly competitive, they say.
The move, which will see the Kingdom’s premium rice competing with Thai jasmine rice, which dominates rice imports by the US, is part of an overall strategy to diversify export markets, rice exporters say.  

...
Economist Srey Chanthy agreed that domestic rice millers will face immense challenges competing with Thai rice in the US market. It is “very difficult to compete with Thailand,” he said. “Maybe Cambodian [exporters] should capture a niche market, like organic rice, or conduct aggressive marketing campaigns and target Cambodian communities as a start,” he said'.

Change

Vietnam seems this years loser when it comes to rice exports. Concerning having (or not) an edge on their competitors,  Vietnamnet (Sep. 21) interviews Dr. Nguyen Do Anh Tuan, Director of the Vietnam Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD):

'To compete amid rice oversupply and consumers preferring to use high-quality rice, the [Vietnamese] rice sector must improve the quality of rice to participate in niche markets which are small but have high value'.

From Thailand the quirky news is that rice farmers should move along. The Nation (Oct. 5):

'The government has called on farmers across the country to grow plants that require less water than rice amid the ongoing risk of drought.

...

... after rice farmers in Kanchanaburi expressed dissatisfaction over the government's plea that they avoid growing rice outside the rainy season'. 

The same source on the same day also has this article which starts off as follows:

'[Thai] Farmers are growing a dry season rice crop - despite authorities' warnings - and have urged the government to come up with concrete policies to help rice growers during the dry season. 

As the dry season approaches, the Royal Irrigation Department (RID) has warned farmers in the Chao Phraya River Basin not to plant the dry season rice crop. They say the available water in the four major dams is not enough for agriculture. Officials suggest farmers cultivate fewer water-consuming plants - or change jobs and become labourers.

...

"We are told to change jobs - to be workers or otherwise plant corn, vegetables or beans instead. This hurt my feelings so much. We are farmers - and furthermore, vegetables do not sell well and are cheap," she [Wassana Gromtu, a farmer from Phitsanulok's Bang Rakam district] said'. 

The Nation (Oct. 2) continues:

'Agriculture and Cooperatives Ministry permanent secretary Theerapat Prayunrasiddhi said the ministry had ordered the Royal Irrigation Department (RID) to inform farmers in the Chao Phraya River Basin about the water situation in order to encourage them not to grow the dry-season rice crop.

...
"During a drought, we see that 80 per cent of farmers outside the irrigation area can adjust well to the situation because they are familiar with water shortages and can change their production pattern, unlike those in the irrigation areas who are used to easy access to water," Wiwat [Wiwat Salyakamthorn, Agri-Nature Foundation president] said. He concluded that the farmers needed to help themselves during drought, as the government cannot provide help to everyone. He urged them to learn mixed farming and have their own water reservoir on their land'.

Trade

The UN's FAO suggests a slight decrease in this years rice output in Cambodia (FAO, Sep. 23):

'FAO currently anticipates the 2015 main season rice production to fall by 3 percent to 7 million tonnes. Assuming more normal growing conditions for the latter half of the ongoing main season and larger sowings for the forthcoming 2015/16 dry season which may partially compensate for the losses incurred by the earlier dry weather, the 2015 aggregate rice production is forecast at 9.18 million tonnes. This is 2 percent down from last year’s bumper crop and slightly above the five-year average'.

Stratfor Global Intelligence (Sep. 23) looks at China's rice market as seen from the US perspective. 
One aspect they concentrate on is how China's food security strategy is maturing, which may enable more imports. On the other hand they note how the US agriculture's dependence on GM strategies is increasing. This in turn raises the likelihood of GM strains turning up in exports thus possibly affecting these. As China has done so in the past.

'Considering the resource scarcity much of the world will face in the coming years and decades, genetic engineering is poised to be a growing part of agricultural strategy, and so contamination will only become more likely. Even though there is already domestic development of genetically modified strains of rice, Beijing is likely to be extremely cautious about accepting foreign genetically modified crops, especially for staples like rice. Furthermore, as Beijing seeks to build up its own agricultural biotech sector as part of its food security strategy, we could see regulations shift accordingly'.

Required
Phnom Penh Post (Sep. 30) has an article on how pepper grown in and around Kampot is gaining better markets at better prices due to good quality control.

'A report released by UNCTAD this week showed that “prices for Kampot pepper had increased significantly after producers gained access to wider and more diversified markets as a result of GI certification”.
In one case study, Kampot pepper producer Starling Farm saw the farmgate price of its product increase from $5 per kilogram before GI status in 2010 to about $18 in 2014'.

Meanwhile Thai rubber farmers want more (Bangkok Post, Oct. 15). In short, a minimum  price, the ability to swap rubber for rice with the government, a review of forest policies vìs-a-vìs rubber plantations on demarcated forest lands and landless rubber farmers and tappers should have the ability to register with the government.

Other news which might have a slight touch to rice trade comes from the Phnom Penh Post (Sep. 25):

'The ministry of Agriculture plans to establish five regional food safety inspection offices near the country’s borders to facilitate the flow of cross-border agricultural trade, reducing the time it takes Cambodian exporters to deliver shipments of agricultural products to foreign markets, a ministry official has said'.

Oddly imports don't face the same requirements. 

Small talk

Sentimental

Robert Zeigler, director-general of International Rice Research Institute feels free to share his thoughts, most notably on anti-technology zealots, wow. COSMOS (the science of everything) magazine publishes an interview on it's website (Feb. 3):

'As an intellectual direct descendent of the architects of the Green Revolution it is truly heartbreaking to see their noble endeavours attacked by people claiming to defend the environment and the interests of the poor. I know as much as I know anything at all, that if we continue to listen to the shrill cries of anti-technology zealots we will be distracted from taking on and solving the most serious problems that face us and our grandchildren'. 

Aha, yes.

'Sadly, while we were working to make our dreams reality, the strange brew of anti-corporate sentiment, extreme environmentalism, romanticised traditional organic but land-hungry agriculture and fear of new technologies boiled over to create a powerful anti-technology backlash. The extreme regulations for GMO crops demanded by self-proclaimed protectors of the environment, had the perverse result that only the largest multinationals could afford to develop such crops. Predictably, this resulted in the same camp denouncing the growing domination of agriculture by multinationals. As costs for developing crop varieties escalated, the few seed companies that could afford the work focused only on areas with large markets. The marginal farmers were once again excluded.

This time, though, who is to blame?'. 

That's a cheap shot. IRRI itself is in the doldrums as they have no direction and seem to research only those rice growing regimes encouraged by big business, be they seed companies, fertilizer producers, pesticide producers or end-produce traders / exporters.

Heavily dependent on donors they are seeking more funds, preferably bigger funds with less strings attached, especially in regards to greener technologies. Under Zeigler, IRRI seeks to be more belligerent on non-significant goals such as Golden Rice or pipe dreams such as hybridisation / corporatisation of seed inputs while publicly shunning alternatives presented such as SRI or economics in their purest form (higher prices = more production). 

And though IRRI should be part of the solution, it seems to be more part of the problem. Soul searching?

Note also this article from GRAIN (30 April) in which they highlight the resistance to IRRI's Golden Rice, a sugar coated programme which IRRI fails to understand why resistance is mounting.

'Local farmer groups from Luzon, Visayas and Mindanao numbering to 200 individuals converged and went to the gates of the Department of Agriculture to call on Secretary Proceso Alcala to disapprove the application for Golden Rice commercialization. They also brought and ate kamote (sweet potato) which contains five times more beta carotene than Golden Rice to show the DA that there are readily available, cheap and natural sources of Vitamin A'.

Recover

The main movement in the market has been the downward price trend as Thailand seeks to clear out stocks while they are rolling up their pledge programme. Not only are prices down, Thai exports are the flavour of the month once more.

Bangkok Post notes (3 April) that the Thai government seeks to double sales. Exports will rise by more than a quarter whereas those from India and Vietnam will drop by 5% and 10% respectively.

The Wall Street Journal (8 May) seems to be getting it wrong, drawing conclusions from two independent facts:

'Thailand’s rice exports are recovering after the government ended its controversial stockpiling policy'. 

The fact that Thailand would up its exports comes independently of the cessation of it's rice pledging scheme.

A week later (10 April), the same news outlet confirms that Thailand is back from it's sojourn from the world's rice markets. They quote the UN's FAO that  estimates that Thailand will estimate 8.7 million tonnes, just 0.8 million tonnes behind current leading exporter India and more than a million ton more than presumed third placing of Vietnam.

Opponents of the Thaksin regime in Thailand are hoping that the rice pledging scheme would the sword onto which they will fall, so reports the Nation (2 May). Not because the scheme failed, no because it might seem that the PM was too busy to oversee each and every meeting.

The Nation has an extensive article on the supposed end of the love affair between Thailand's rice farmers and government subsidies (6 May). And though that may be what they set out to do, it's more about the current unravelling of the rice-pledge scheme. Considering farmers felt it was such a success there's bound to be more of the same, once a government can once again rule.

Possibly the Thai PM will face impeachment procedures for her (non?) role in the rice pledging scheme (Nation, 8 May). 

No, wait for it, her opponents have found a different stick ...

Scrap

The change in the market is also affecting Cambodia where rice exports have dropped by 10% so reports the Cambodian Daily (11 April). It has also decimated rice exports from Cambodia to Thailand:

'Exports to Thailand for the first quarter of this year were virtually wiped out, falling from 13,000 tons in 2013 to 300 tons this year. Last year, Thailand was the sixth biggest importer of Cambodian rice, buying 23,550 tons'.

There are also wider implications as prices plummet. Cambodia's rice is relatively expensive to the market meaning that with lower prices and fixed (or even rising) costs for storage, transport and marketing, Cambodian is putting itself outside of the market. That's unless farmers are willing to accept lower prices. And with prices in a downward trend, traders are also making losses which will see them less willing / able to buy future stocks.

So it comes as no surprise that Phnom Penh Post reports (8 April) the following:

'The government-backed Rural Development Bank (RDB) will lend $64 million to Cambodia’s agriculture sector in 2014, the bank’s top official said yesterday.

Sun Kunthor, president of RDB, said most of the funding would be used to support growth in Cambodia’s rice sector as it strives to meet the government’s export target of one million tonnes by 2015.

“The rice sector needs more than $300 million to reach its full potential,” Kunthor said'.

But doomed to fail?

Dry season rice farm output in Cambodia is said to drop by 1.9%? So reports the Phnom Penh Post (7 April):

'The government commended the farmers’ efforts, citing a 2.5 per cent drop in producing land, due to the effects of flooding. On average, farmers actually increased their average tonnage per hectare from 4.1 tonnes in 2013 to 4.3 tonnes this year, according to the ministry'.

The FAO also suggests that Cambodia's total annual rice output would equal last years output, 9.4 million tonnes. So reports the Cambodia Daily (15 April):

'In its April rice market monitor report, issued quarterly, the FAO said as long as the industry does not encounter any major setbacks—such as floods between September and Novem­ber—Cam­bodia will produce 9.4 million tons of rice paddy, slightly up from last year'. 

It would certainly be interesting to see if the lower prices and the expected lower leakage to Thailand will have any effect on the output.

Other initiatives to stimulate rice exports. Custom fees are to disappear in Cambodia in an effort to assist rice exports, so reports the Phnom Penh Post (18 April):

'The Ministry of Economy and Finance (MoEF) will scrap customs fees for rice exporters from May 1 in an effort to reduce production costs and boost Cambodia’s competitiveness in the sector, according to a letter obtained by the Post.

“[The ministry] has agreed to eliminate charges relating to customs processing fees for exporters of rice in order to boost the rice export industry,” said the letter, signed by Department of Customs and Excise officials.

The letter goes on to say that the fee changes will become effective on May 1, in less than two weeks time.

The government’s changes to the customs tariff scheme have been welcomed by rice industry officials and economists.

Kim Savuth, president of the Federation of Cambodian Rice Exporters (FCRE), said the government’s move will help cut production and export costs by at least $15 per shipping container'.

Indeed 15 $US per container so no huge incentive. The Cambodian Daily (29 April) adds:

'Lim Bunheng, chairman of both the Loran Import-Export Co. Ltd. and Cambodian Rice Exporter Association, said the directive would allow his company to save at least $15 per container.

Mr. Bunheng added that the tax change will help increase his milled rice exports, which last year amounted to 23,000 tons of milled rice.

“I plan to increase my rice exports by 50 percent more than last year,” he said.

Srey Chanthy, an independent economist, said although the tariff removal will be a boon to the industry, there still needs to be a greater focus on rice milling ca­pacity and quality to ensure that Cambodian rice meets international standards.

“[The tax break] will speed up the rice export process, and rice exporters will be able to sell more milled rice and make prices competitive in the international market,” he said'.

Up and down

With prospects for rice fading, there seems to be more attention for other crops.

Mangoes picture are a more rosy picture. Phnom Penh Post (4 April) has an interview with

'Mong Chanthol, the youngest son of agriculture business tycoon Mong Reththy. As the manager of Mong Reththy Group’s mango plantation and soon-to-be built mango packaging plant in Preah Sihanouk province, Chanthol says Cambodia is on its way to becoming the home of one of the world’s most luxuriously priced fruits – the Irwin mango'.

And what the future will bring:

'When we start to export the Irwin mango, we envisage it will be sold for $20 per kilo. Our farm currently has about 80,000 trees of Irwin mango and we will add another 50,000 trees by the end of this year. 

...

Tell us about the Mong Reththy Group’s businesses here in Preah Sihanouk.

Over the 30,000-hectare estate, we have a pig farm, palm oil, rubber and now mango plantations. About 60 people are employed in the mango business already. Maybe 250 people are employed in our pig farming operation and more than 5,000 in the palm oil operations during the high season.

This interview has been edited for length and clarity'.

And then a week later the same newsoutlet adds:

'Agriculture tycoon Mong Reththy yesterday confirmed a second shipment of Koe Romeat mangoes, twice the size of the first, will be headed for China this week from his Preah Sihanouk plantation'.

Rubber. The Phnom Penh Post (8 May) sees fit to repeat a Ministry of Commerce release on the national rubber market: exports are up, prices are down.

'The latest figures from the Ministry of Commerce show natural rubber exports grew 26 per cent during the first quarter of 2014, compared with the same period last year.

Meanwhile, overall revenue from natural rubber sales fell 28 per cent.

“Last year, rubber was selling at about $2,800 per tonne, but early this year, surprisingly, the price has dropped to as low as $1,980 per tonne,” Heng Sarath, deputy director of the General Directorate of Rubber, said, adding that prices had been on the decline since 2011'. 

A week later (16 May) the Cambodia Daily is a lot more pessimistic:

'Cambodia’s steadily declining rubber prices have hit critically low levels that are destined to only get worse as Thailand prepares to offload huge rubber stocks, the secretary-general of the Association for Rubber Development of Cambodia said Thursday.

As the price of natural rubber has paralleled a global price drop, tumbling to $1,500 per ton, down 31 percent since the start of the year when rubber was selling at $2,200 per ton, Men Sopheak said the industry has been thrown into disarray.

“Falling prices have led to processing factories pausing operations because they are struggling to cover labor costs,” Mr. Sopheak said. “The farmers are getting very little profit and if the price drops further they will be making a loss.”

Approximately 30 to 40 percent of the 60 factories in Cambodia that process raw rubber have suspended operations and farmers are working with narrowing profit margins, he said'. 

The culprit is yet again Thailand as the rubber scheme is now unravelling.

The World Banks is scrutinizing it's portfolio. Maybe the postponement of planting is a blessing in disguise. The Phnom Penh Post (8 May) notes:

'Controversial Vietnamese rubber giant Hoang Anh Gia Lai (HAGL) has suspended part of its operations in Ratanakkiri province amid an investigation by the World Bank’s investment arm into claims of land grabbing, a company memorandum reveals.

...

Last year, UK-based NGO Global Witness published a report accusing HAGL of illegally logging outside concession areas and being in possession of at least 47,000 hectares of economic land concessions – almost five times the legal limit.

The IFC, Deutsche Bank and, later, Credit Suisse were all singled out for investing in HAGL. Deutsche Bank subsequently divested, while Credit Suisse claimed that its holdings predated the Global Witness report'.

Longan growing another alternative? The Phnom Penh Post (16 May) notes:

'The amount of land used to grow longans has doubled in the past two years, but a lack of supply-chain infrastructure is hampering farmers’ ability to get top dollar for their product, the fruit’s body says.

Sreng Sreang, deputy director of the Pailin Longan Farmers’ Community (PLFC), said the fruit growers are in desperate need of storage facilities to hold large amounts of their stock in order to avoid being left with an oversupply at the end of the harvest season between January and March, which in turn brings prices down'.

Away from rice, palm oil looks set to be in for a hard time. The Nation (11 May) reports that weather patterns will affect Southeast Asian output, meaning higher prices for consumers. And one would believe higher prices for farmers?

It's the dry season, so no wonder news is about the drought. Drought affecting production. Bangkok Post (12 April): 

'Rice, sugar and rubber output in Thailand is at risk because of prolonged drought, according to the government forecaster, which warned that the dry conditions may be aggravated by the development of an El Nino this year'.

(Too) small fry?

Local initiatives taking off, this time in Laos. The Vientiane Times reports (12 April):

'Overseas customers are showing keen interest in buying Khao Kataven (‘Sun' brand rice) after it gained Lao government ‘One District, One Product' (ODOP) approval at the end of last year.

The product is produced by the Khamphengphet Chengsawang Export and Import Co. Ltd. in Nasiew village, Naxaithong district, Vientiane.

“Companies from Korea, China and Thailand are currently studying the quality of the rice; we are still in negations and it will take time for us to complete export contract negotiations,” company director, Mr Khampheng Sengthavy told Vientiane Times on Tuesday.

“The markets in these countries need good quality rice, especially organic rice, for selling within their country,” he said'. 

The article though fails to mention how much is sold over the Lao borders, out of their total produce of 7,000 tons.

An interesting research was reported in the Oryzae.com website (15 April). Apparently bats are a common enemy of plant hoppers. Thailand -wide savings are nearly 3,000 tons which can be increased with the use of so-called bat roosting boxes.

More local iniatives, that of Ibis Rice. The Phnom Penh Post (5 May) reports:

'The Wildlife Conservation Society (WCS) says its Ibis Rice project has recorded a production surplus for the first time in its five-year history, prompting a bid to export the boutique product overseas.

Concentrated in Preah Vihear province, Ibis Rice farmers produced more than 435 tonnes of organically grown, fragrant Malis rice during the 2013-14 harvest season, up 54 per cent from the previous season, according to a WCS report.

The Ibis Rice project is operated by NGO Sansom Mlup Prey (SMP) and pays farmers a premium of up to 150 riel ($0.03) per kilogram more than other local buyers. In return, farmers commit to strict regulations barring them from additional land clearances, thereby protecting surrounding wildlife areas including the Kulen Promtep Wildlife Sanctuary.

...

David Van, deputy general secretary of the Alliance of Rice Producers & Exporters of Cambodia, commended the Ibis Rice project’s design; however, he warned that it is
a tough export market for small producers.

“I would honestly say an annual production of . . . less than 500 tonnes is negligible,” Van said in an email.

“Ibis’ format/approach is far too small in cultivated surface area and tonnage produced to be at anytime commercially viable,” he added, citing the project’s premium buying stance as a potential
set back'.

Hypocritical

I could spend a huge amount of this blog on the on-goings in Thailand: rational analysis, past present and future. But I am not.

Much of what has played out in the last few weeks in Thailand concerning rice pledging and political scheming was to be expected. Government is weak and has problems continuing programme: the dèja vu! It's all great when you start the rice pledge programme, but it's like a drug: there's no way you can stop. without tears that is.

So yesterday, Thai farmers were in arms, today it's believed they might get their pay, so they are back on the land. Thai government corrupt? Oh no! Not again!

Despite the good years, it's odd to see how fast some farmers are to switch their allegiance ...

Well what else is there to report about?

Rules, my a**?

We could start off by looking at how Cambodia is struggling to market it's rice. The Phnom Penh Post (Feb. 17) reports on stringent rules concerning providence of it's rice export so as to prove to Europe that yes indeed it is Cambodia produce.

'Exporters requesting a certificate of origin from the Ministry of Commerce will be required to show proof through invoices and receipts that the rice is local.

An audit committee consisting of both industry and non-industry representatives is tasked with investigating claims of fraud.

Penalties include the permanent revocation of an exporter’s certificate of origin, which strips the business of duty-free access to Cambodia’s largest market'. 

If this were to happen, the cost of exporting Cambodian rice just got more expensive and wrought with administration, yea! Note that David Van in a comment says it's bollocks, there is no need for a certificate. So article wrong?

Earlier this month (Feb. 4) the Phnom Penh Post had a re-cap / re-hash on the story. 

Italy seems to be lobbying for denying no-tariff imports for Cambodian rice. It's unfair to Italian farmers. This despite the fact that Italy produces different rice and hardly any note-worthy exports from Cambodia. Reaction:

'David Van [there he is], deputy-secretary general for the Alliance of Rice Producers and Exporters of Cambodia, said in an email yesterday that it was hypocritical of the Italian government to claim developing countries were receiving unfair subsidies, as European countries have long benefited from similar EU deals'. 

Trouble is that the importing country sets the rules ....

Lower market prices for Thai rice result in poor conditions for Cambodian rice exports, (Phnom Penh Post, 20 Feb.):

'Stockpiles accumulating since the [Thai rice pledging] scheme was introduced in 2011 have risen to record levels [in Thailand], and an anticipated fire sale has buyers holding out in anticipation of cheap rice flooding the market. Cambodia and other countries are taking the hit'.

Exporters must decide: to move their stock or to accept lower prices. 

Elsewhere, the importance of rice and rice exports to Cambodia was highlighted through a World Bank assessment which highlighted how the number of poor in Cambodia had halved since 2004. Main reasons were increasing prices for rice and higher productivity. 

Especially higher prices seems to contradict common logic which says that low prices are good for the poor. They're not.

The article in the Cambodian Daily (Feb. 21) also highlights that though the poor has halved, most now languish in the near-poor category!

Resistance

Or we could note that Burma exports are increasing to Japan (Nation, Feb. 7). As well as smuggling to Thailand. Britain's Telegraph (Feb. 4) has a first-hand report from Burma, opposite Mae Sot, where large scale smuggling is taking place.

Meanwhile in Laos, farmers are apparently defying private armies trying to rob them of their lands (Radio Free Asia, Jan. 22), now why is this not a headline? 

'In a rare act of resistance, dozens of rice farmers in northern Laos have defied armed police orders to vacate land seized by a Chinese company wanting to build an airport as part of a casino-driven special economic zone, according to villagers.
The 50-odd farmers refused to budge when policemen, armed with AK-47 assault rifles, moved on Friday to enforce an order by the King Romans (Dok Ngiew Kham) Group for the farmers to leave their rice fields to make way for the construction of the airport in Tonpheung district in Bokeo province'.

Then in the Philippines where rice smuggling, or rice importing at inflated prices is all the rage. But those pinpointed alleged receivers are suddenly not fit to face a Filipino Senate committee (Oryza, Feb. 24).

Up your street

Or we could note that Thai research has found out that their farmers are a lot worse off than Vietnamese and Burmese farmers (despite the higher prices?). Thai farmers are hampered by the high cost of inputs so concludes the article on the research by University of the Thai Chamber of Commerce (Bangkok Post, Feb. 26).

But a quick flick through the article learns that the low productivity is the crux of the discussion and probably the high cost of labour, it's not clear.

Even worse is the conclusion, that it in part is due to the governments rice-pledging scheme. That seems to be the world upside down. But yes, that's how it is seen. The backers are requesting the government (which one?) to use subsidies to drive down production costs. 

But how? Will they want to lower labour wages? Give hand-outs to fertlizer and chemical producers? 

If you believe rice-pledging was hampered by graft and accountability, then why would you propose even less accountable alternatives?

One mistake (besides graft and accountability; no matter what you do these will always remain a problem in the Thai context) the government made was to think that the rice pledging programme would be self-sufficient: hoarding would lead to higher world prices. Market conditions were not so and the government failed to act.

And now I still being sucked into the discussion ....

Anyway, Siam Kubota's profits will drop so reports the Bangkok Post (Feb. 25 ) mainly due to lower purchasing power of farmers because the price for rice is lower. So, obviously the reverse is true, the rice-pledge has lead to increased investment. Or not?

And the Bangkok Post (Feb. 24) has a rather lengthy exposé in which they calculate that organic rice growing is as profitable as for non-organic. So if their consequence support for lowering input prices (above) is thought through, this would be distorted and yes the subsidies would mean more chemicals on the farms, good to see Bangkok Post jumping on this bandwagon!

Contamination

Are changes near to the current stable global rice market? 

It could be. Three factors: Thai stored rice coming onto the market, possible Vietnamese stockpiling and China's change in taste: no cadmium please! What?

The Wall Street Journal (May 21) has an article of recent unrest in Guangzhou:

'A government test indicated that nearly half the rice sold in the southern Chinese city of Guangzhou was contaminated with cadmium, triggering anger from consumers that China's staple food hasn't escaped the widespread pollution tainting its air, water and soil.

...

According to the Guangzhou authorities, the contaminated samples were found to have 0.21 milligram to 0.4 milligram of cadmium in each kilogram of rice. The Chinese government allows a maximum 0.2 mg of cadmium in each kilogram of rice'. 

As the rice originates from Chinese province of Hunan, consumers are advised to seek alternative sources; as with milk powder this may well wet China's appetite for foreign rice (yeah Thailand!). Note the 100+ comments ...

The Bangkok Post (May 27) chimes in: 

'Consumers in China are turning to well-known brands from northern provinces and Thai imports after high traces of cadmium were found in some long-grain rice in the country's South, a commodities analyst said.

Demand for Thai rice, which can cost as much as nine times local grain, is rising, said Wang Shutong, an analyst at commodity information provider Sublime China Information Co (SCI). The price of rice from northeast Heilongjiang province, which produces the short-grain japonica variety, has risen as much as 2.6% this month, according to data tracked by SCI.

...

Sales from mills in Hunan province, the first reported origin of the tainted rice, are stalling and 70% of processing plants have halted operations'. One of the comments: 'Thai rice is also tainted - patents or not, organic or not. It's not as dangerous as China's rice, but, it is loaded with arsenic and pesticide residues. Because the ground water has been tainted by farmers using pesticides. So even farmers growing rice 'organically' are growing it in water tainted with arsenic and pesticide residues, which end up in the rice we are eating'.

International Business Times also (May 28) looks at the cadmium story. It notes: 

'China's imports of Thai rice or grains is expected to surge in the following weeks after the recent discovery of cadmium metal contamination in the grains marketed by Hunan, China's largest rice-producing province.

...

Rice wholesalers in China have stopped selling rice from Hunan, buying from elsewhere in China, and even from Vietnam and Pakistan. In fact, rice grains prices from northeast Heilongjiang province has jumped to as much as 2.6 percent in May, according to data Bloomberg gathered from SCI'.

The other factors: to stockpile or not?

Despite a plethora of articles and comments, Thailands Nation (May 13) reports that officials want to 

'convene to evaluate the [rice pledge revolving] fund's status'. 

Is the bucket of gold (nearly) empty?

An opinion ventilated by Rakesh Sodhia on May 21 in the Nation:

'The government says Thailand will export 8.5 million tonnes in 2013, an increase of 20 per cent over 2012. The Thai Rice Exporters' Association says the figure is 6.5 million tonnes.
I have been in the rice-export business in Thailand for over 30 years and will place my money on the lower figure from the association. The government has no clue how to solve the problems facing the industry and reduce the huge stocks it is holding. If it discounts prices to be competitive against those of Vietnam, India, Pakistan and Myanmar, it will end up losing US$200-$250 per tonne. Meanwhile, the government's storage costs increase daily, since it is paying for space, inspections, fumigation and insurance, in addition to a deterioration in rice quality over time. The government is caught between a rock and a hard place and has nowhere to go'.

Opinion from Bangkok Post (May 23): the day of reckoning is near. For the rice-pledge scheme so it seems. Losses are yet to be accounted for, but once that happens, the free-hand in rice subsidies will quickly disappear so believes Thailand's no. 1 English print.

With virtually all of Thailands' rice tied up in government schemes, it's no surprise that the Nation (May 28) forecasts a bleak future for Thai rice exporters, the real victims of the rice pledge scheme. Not only are competitors eating into the Thai pie, increasingly importing countruies are seeking to establish their own rice self-sufficiency.

As if the Thai government aren't troubled enough domestically, now the foreigners are breathing down the Thai necks. AsiaOne (June 4) notes that ratings agencies (remember, those agencies that failed to see the recent banking crisis) are warning Thailand that their financial goals (and thuis their improved ratings) may well not be reached if the rice pledging scheme continues.

'Thailand - rated "Baa1" with stable outlook - had hoped to win a credit upgrade, to an "A" rating once assigned before the financial crisis in 1997.

But in a statement, Moody's said implied losses of Bt200 billion in the harvest year were much higher than the World Bank's estimate of Bt115 billion (S$4.7 billion) and the Finance Ministry's forecast loss of Bt70-Bt100 billion'.

The knee-jerk reaction. Bangkok Post (June 4): 

'Moody's Investors Service's credit-negative report on the rice pledging scheme is wrong, Prime Minister Yingluck Shinawatra said on Tuesday, and the government will issue a report explaining why'. 

Yawn. The Thai government are even losing the plot: 

'During the debate, Boonsong [Commerce Minister] said that the Bt260 billion loss, reportedly cited in an unofficial Finance Ministry report, associated with the scheme was groundless. But he did not produce any proof to support his claim.

...

When asked repeatedly, the PM said: "I told you, that those responsible for finding out the [actual] figures associated with the scheme will make them public later." Asked if the scheme losing such a huge amount would affect her as prime minister, she said "Enough!", and walked off'.

More empty pockets. The Nation (June 5): 

'The Bank for Agriculture and Agricultural Cooperatives says it has an adequate budget to continue the rice-pledging scheme until the end of the latest project, but beyond that, the government will either have to borrow more or accelerate its stockpile releases to earn some rice-sales revenue as soon as possible'.

Is Vietnam following suit? Read this: 

'Vietnam may stockpile 1 million tonnes of milled rice, about a fifth of the current Mekong Delta harvest, in a bid to support prices that have dropped to their lowest in nearly 26 months'.

The above from Pakistan's Business Recorder  (June 2). It also notes that it's mainly businesses that are stockpiling in the short term, are gambling on prices holding or even going up ...

Risk averse

The Cambodia Daily (May 22) reports on efforts by the UN and China to raise cassava exports and enhancing quality at the same time. As with rice, cassava production and exports of raw products are booming.

The Phnom Penh Post (May 23) reports on rising rice regional exports: 

'Kim Savuth, president of the Federation of Cambodian Rice Exporters, told the Post yesterday that milled rice exports to European countries, Cambodia’s traditional market, is still increasing, but its percentage share is gradually decreasing. He said the trend of exports to Asian market is on the rise'.

A cryptic article from the Phnom Penh Post (May 22): 

'Officials are seeking expert firms to implement projects on so-called contract farming and the enhancement of the involvement of farmers’ organisations in paddy collecting and processing, officials said'. 

Some how I don't seem to understand the content of whatever they are hoping to do. Are Agence Francaise de Developpement (AFD) and the government in the market for establishing contracts? The only catch I saw was that it was to be financed by AFD for €6 million! Fail to find any additional info on the AFD website ...

The answer to Cambodia's agriculture are loans and irrigation. So say experts as reported by the Phnom Penh Post (May 20): 

'In a meeting on the private sector development in the rice sector, Lim Heng, vice president of the Cambodia Chamber of Commerce, suggested that the government should supply more irrigation systems for better rice output.
“If we do not have enough water systems and still depend on the rainfall, the risk can be very high,” Lim Heng told participants in the meeting. “Therefore financial institutions will be hesitant to give us loans as they think it is too risky.”
He added that if farmers had enough water, crop yields will be better, and the costs of production would be lower.
Irrigation systems in Cambodia are said to be on the rise, but experts in the sector said this is not reflected in day-to-day practices.

...

Experts have long said that the shortage of loan activity in Cambodian agriculture hinders the sector’s development'.

Oryza.com (May 28) shares the thrill of Cambodian rice exporters at being part of the THAIFEX – the World Food of Asia food trade fair.

Giants and more risks

A sleeping giant has awakened. Radio Free Asia reports (May 9) that Burma hopes to export double last years figures of more than 1.5 million tonnes:

'Soe Tun [Myanmar Rice Industry Association central executive member] said Burma had recently set new records in rice exports, referring to a state media report which said the country had exceeded its target of 1.5 million tons in the last fiscal year by about 600,000 tons, marking “the highest amount of rice exported from Burma in the last 46 years.”
“Burma is now fifth in terms of rice exports around the world,” he said, and is poised to grow.
The Southeast Asian nation was the world’s biggest rice exporter for much of the first half of the 20th century until it was overtaken by Thailand after an army coup in 1962 set up nearly five decades of junta rule.
Since taking power in 2011, Thein Sein’s reformist government has quickly revamped Burma’s rice production and reputation as an exporter'.

Vietnamnet reports (May 20) on the problems it faces when exporting to China:

'However, high risks have been existing. The importers from China, the vast market which consumes 1/3 of Vietnam’s total rice exports, have been trying to force the prices down, or threaten to cancel contracts.

...

The director of a rice export company complained he has tasted a bitterness when doing business with a Chinese enterprise.

The Chinese partner ordered 10,000 tons or rice, with the payment to be made after deliveries. When the products docked at the destination ports, the partner, complaining about the quality, insisted on lowering the prices. The rice exporter, who fell into dilemma, had to sell the consignment of goods at a loss'.