SOK CHAN
 |
| Cambodia’s rice sector is facing a myriad of problems and the government has intervened to prevent rice prices from plunging further. KT/Chor Sokunthea |
Rice millers in the country will now be able to access the government’s promised emergency loan of $20 million to purchase paddy rice from farmers in a bid to prevent rice prices from falling further, the Rural Development Bank (RDB) announced yesterday.
Rural Development Bank CEO Kao Thach said the government’s $20 million emergency loan had been transferred to the RDB yesterday after Prime Minister Hun Sen approved it on Friday.
“All rice millers in the country who have their own warehouses and silos to store rice can now apply for the emergency loan from RDB,” Mr. Thach told reporters at a press conference.
“The criteria is that a separate warehouse is needed with double locks ‒ one for the miller and the other for the RDB. The millers must also have fire insurance,” he added.
Rice millers who do not have warehouses or silos, the RDB CEO said, will still be eligible for the loan from the bank provided they deposit their paddy rice to be milled at government warehouses, which in turn will be used as a collateral for the loan.
The government, Mr. Thach said, will provide loans to rice millers of up to 70 percent of the total amount required to buy paddy rice from farmers and would charge them an interest rate of eight percent a year. He added that the government had already prepared warehouses in five locations across the country to pre-position paddy rice stocks.
Storage facilities in Pursat, Battambang, Siem Reap and Banteay Meanchey provinces will be part of the scheme, as well as facilities in Phnom Penh, Kandal, Takeo, Kampot and Kampong Speu provinces, said Mr. Thach.
On the other hand, he said, Thbung Khmum, Kampong Cham, Prey Veng and Svay Rieng provinces will only have one storage facility each.
Mr. Thach said the rice millers could also use the rice stock in their own warehouses as collateral to get loans based on an agreement between them and the RDB.
In June, the Cambodia Rice Federation (CRF) announced that the government agreed to offer loans of between $20 million and $30 million to help millers buy paddy rice from farmers after the harvest this November to store in warehouses and process for export.
The loans were to be made to the CRF, using the Rural Development Bank (RDB), with the foundation acting as guarantor.
The CRF in turn would screen all applicants and hand out the money to deserving rice millers, who are now reeling from the aftereffects of the severe drought and facing stiff competition from low-grade rice flowing into the country from Vietnam.
But three months later, the loans have yet to be made and a specter of doom and gloom hung over the sector because there was only a short three or four-week window of opportunity to buy paddy rice from farmers for milling in November.
If this was missed, rice millers said, the harvested paddy rice would be sold by farmers to rice millers in neighboring countries for much lower prices.
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 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 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 buying such a large quantity of rice at a price similar to last year will raise the current 770,000 riel ($193) a ton price that is causing farmers such concern.
Ros Seilava, an undersecretary of state at the Ministry of Economy and Finance, said yesterday that the country’s rice sector was facing a myriad of problems ‒ from falling grain prices to the reluctance of banks and microfinance institutions to loan money to millers and farmers.
“The government’s emergency loan is just a short-term measure. The bigger issue is dealing with the mindsets of millers and farmers,” said Mr. Seilava.
“Cambodia’s rice production costs are still very high compared with Thailand and Vietnam and that makes our rice very uncompetitive in regional markets,” he said.
“We need to be more forward thinking and have a long-term strategy to save the country’s rice sector.”
Hun Lak, the CRF’s vice-president, told Khmer Times the current crisis in Cambodia’s rice sector was caused by domestic and external market factors.
“The external factors are falling international markets for rice and the flooding of the country of cheaper-priced rice from neighboring countries. The domestic factors involve lowering rice production costs, amidst lower supply of paddy rice for milling,” said Mr. Lak.
He said Cambodia needed to learn from its neighbors on how to lower rice production costs, despite falling exports.
No comments:
Post a Comment