SOK CHAN
In an effort to appease rice farmers and stimulate rice millers to purchase fragrant rice currently being harvested across the country, the government announced that it had found $27 million to pay for emergency measures.
The Ministry of Economy and Finance released a statement on Friday saying that the money would be used to both stabilize currently falling prices and pay farmers, at market prices, for their newly harvested paddy rice.
“Through this special program, the government will purchase about 90,000 tons of rice from farmers, which will make the rice price rise to more than 940,000 riel [$235] a ton. The Ministry of Economy and Finance will redirect about $20 million from the emergency budget fund to the Rural Development Bank (RDB) to implement the special government program,” the statement said.
In addition to the $20 million of government funds, the RDB is loaning $7 million to the project. It is hoped that by buying such a large quantity of rice at a price similar to last year, it will raise the current 770,000 riel ($193) a ton price that is causing farmers such concern.
The RDB will also come to the aid of the country’s rice millers, who have said that due to a lack of funding, and cheap imports, they have had to lower the prices they are able to pay to famers. The project will see the RDB loan money to rice millers who deposit rice at government warehouses, using the rice as collateral.
Two storage facilities in Pursat, Battambang, Siem Reap and Banteay Meanchey provinces will be part of the scheme, as well as single facilities in Phnom Penh and Thbung Khmum, Kampong Cham, Prey Veng, Svay Rieng, Kandal, Takeo, Kampot and Kampong Speu provinces.
“The government will push this loan mechanism by getting rice stored in warehouses as collateral and encourage the private sector to strengthen and expand silos and warehouses to ensure the rice is stored properly. It will also stabilize rice prices for farmers, ensure rice is reserved for export, as well as building trust from buyers,” the statement said.
The announcement followed a message posted by Prime Minister Hun Sen on Facebook, in which the premier said that after listening to the complaints from farmers over the rice prices, he had felt the need to intervene.
“Now the government has begun an emergency measure to intervene in the issue of rice prices. With this emergency measure, there will be medium and long-term measures to support the agriculture sector in Cambodia,” he added.
Phon Nary, the director-general of Battambang Rice Mill, said that news of the government’s intervention was promising. But he said as of Friday no support had yet been received and that the money was urgently needed.
“As a rice miller I am like a fish waiting for feed. If the government wants to help, please give the loans now to the rice mills, and let us know how much money we can have so that we are able to purchase rice from farmers.”
“If there is no money how can we buy rice from farmers?” Mr. Nary asked.
In a bid to protect the country’s beleaguered rice industry, Commerce Minister Pan Sorasak announced that in addition to the emergency loans, import taxes on rice would be increased.
“As a temporary measure, to prevent further stress on the rice sector in Cambodia, we will increase the import tax from seven to 10 percent.”
He also announced that the government was looking to increase exports to further help the sector, with Indonesia, East Timor and China all showing interest.
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