CRF Wants to Track Rice Loans

KHMER TIMES
SOK CHAN

Rice farmers waiting to sell their paddy rice in polythene sacks to millers. KT/Mai Vireak

The Cambodia Rice Federation (CRF) has submitted a proposal to the government for the setting up of a joint executive financial committee to ensure that the $27 million emergency loan to rice millers to purchase paddy rice from farmers, in a bid to prevent rice prices from falling further, is not misused.

In an interview with Khmer Times, CRF Secretary-General Moul Sarith said the federation’s plan would involve the National Bank of Cambodia (NBC), Rural Development Bank (RDB), commercial banks and all relevant stakeholders.

“The purpose of this joint executive financial committee is to keep track of the disbursement of the loans to rice millers and also to ensure that farmers are the real beneficiaries of the government’s emergency intervention,” said Mr. Sarith.

On the disbursement of loans to rice millers, Mr. Sarith said the prerequisite format will be in the form of checks.

“We propose not to give them [rice millers] cash as it could be misused and difficult to track. The rice millers would be given checks instead and they will use this financial instrument to pay for the paddy rice that they are going to buy from farmers. The farmers, in turn, would be able to cash these checks at the nearest bank, that is a member of the joint executive financial committee,” he added.

Mr. Sarith said the CRF is keen to get a quick response from the government on the joint executive financial committee proposal.

“If the government gives the green light fast, relevant stakeholders such as the NBC, RDB, commercial banks and the private sector will join this committee.”

In a bid to stabilize falling prices, the Cambodian government late last month gave the green light to the RDB to disburse loans totaling $27 million to millers to buy paddy rice from farmers at 840 riel ($0.21) per kilogram.

Phou Poy, president of the Green Rice Miller in Battambang province and also chairman of the Rice Bank, told Khmer Times that the RDB intervention was necessary to prevent rice prices from tumbling further.

“Without the 840 riel per kilogram government price, the price of rice might go into a free fall,” he warned.

Kao Thach, CEO of RDB, told Khmer Times yesterday that the bank welcomed the CRF’s proposal.

However, he said, at this juncture it would be difficult to include the NBC as they are a central bank with a regulatory function, and should not be treated as a commercial bank.

“Nonetheless, the RDB will cooperate with any government directive,” stressed Mr. Thach.

The RDB said in a media statement Monday that the majority of rice millers were still using their own funds to purchase paddy rice from farmers.

“The next harvest season will be soon and the RDB is prepared to disburse loans to rice millers at an interest rate of seven percent a year or 0.583 percent per month, if they need them,” added the statement.