Rice Millers Reined In

KHMER TIMES
CHEA VANNAK

A ministerial order bans rice millers from block-buying the whole rice crop from farmers, just before harvest, and offering them a below market price for the exclusive purchase. KT/Chor Sokunthea

The Ministry of Agriculture has taken action to prevent millers from purchasing paddy rice at below market price from farmers, currently struggling to produce enough marketable rice crop to make ends meet.

The ministry, in a statement issued on Monday, ordered all provincial agricultural departments to take action against rice millers who exploit farmers due to their inability to command a fair price for their paddy harvest because of a lack of bargaining power.

The ministerial order bans rice millers from block-buying the whole rice crop from farmers, just before harvest, and offering them a below market price for the exclusive purchase.

“This is to prevent millers from trying to control prices in the provinces so that they can get maximum profits. These rice millers also prevent other millers from offering higher prices to farmers for their rice harvest, so that they have a monopoly over the area,” said Hean Vanhan, secretary of state at the Ministry of Agriculture.

“We want famers to also be able to collectively control prices with rice millers and create a free market situation based on supply and demand,” said Mr. Vanhan.

To avoid selling at low prices, Mr. Vanhan said rice farmers should store their harvested paddy rice and release them to the market when prices are high.

But Dem Sreylim, chairwoman of Vangkesor Rice Community in Battambang province’s Moung Ruessei district, was skeptical of Mr. Vanhan’s suggestion.

“Farmers have debts to pay and most of them have taken out loans from either moneylenders or financial institutions to grow their crop.

Because of that they cannot leave their rice crop too long in the fields. They need to harvest it fast and sell it to the first miller who approaches them, so that they will have money to pay off their debts,” she told Khmer Times.

Ms. Sreylim however agreed that rice millers needed to be reined in to prevent monopolies.

“They [rice millers] can cause huge price fluctuations due to their greedy actions. Often we are in no position to negotiate and they just want to buy rice at a price that is often too low for us,” she said.

Lay Andy, managing director of milling company City Rice Import Export, said a shrinking domestic market and the flood of cheap milled rice from neighboring countries were factors pushing Cambodian rice millers to offer lower prices to farmers.

“We want to pay farmers higher prices for their crop. But how can we do that when the market price for milled rice is so low, caused by the flood of cheap imported rice from Vietnam and Thailand,” said Mr. Andy. “We also have bank loans to pay off and need to survive,” he added.

“Our milled rice, at the moment, cannot compete with the imported milled rice from our neighbors.”

Mr. Andy said many rice millers were also having financial difficulties.

“Many can’t afford to buy paddy rice for milling because they don’t have enough funds after incurring heavy losses from the previous season due to the prolonged drought where rice production fell sharply,” he said.