Low Uptake of Gov’t Rice Fund

KHMER TIMES
SOK CHAN

Millers are using their own resources to purchase paddy rice from farmers to store in their warehouses, bypassing the government’s emergency rice fund. Reuters

The government’s much-heralded $27 million emergency rice fund, announced last month amid complaints from rice farmers and millers that cheap competition and low-storage capacity was driving down prices, has so far had only limited takers among rice millers.

Kao Thach, CEO at the Rural Development Bank (RDB) said yesterday that the rice sector was presently still using its own funds to purchase and process the ongoing rice harvest, and that the fund had not yet been utilized.

“At this moment, all rice millers are using their own resources to purchase rice from farmers to store in their warehouses, but I hope that they will come to us for the next harvest season, which includes other varieties of aromatic fragrant rice [Romdoul and Malis] that are popular globally,” he explained.

He predicted that the increased need in November and December for loans will see the emergency fund being totally used up. With interest on the loans being seven percent annually, Mr. Thach said that he expected any loans from the fund to be fully repaid by May, once all rice had been harvested.

In order to qualify for the funding, millers must use their rice stocks as collateral, which may be a factor in the limited number of loan recipients.
Phon Nary, director-general of Heng Huch Rice Mill in Battambang province, told Khmer Times that he had hoped to apply for the funds, but that his rice storage capabilities were too small for RDB requirements.

He said that the RDB required storage capacity of up to 150 tons per day but small and medium-sized operations struggled to store more than 50 tons.

“Currently I use my money to purchase rice from farmers and now I have almost exhausted my budget to purchase the upcoming rice harvest,” he said. “I have purchased about 600 tons...and my silos can only receive about 45 tons a day and process about six tons per hour, so we haven’t been allowed to get funding.”

“We are now trying to sell our milled rice to the market to get some money to purchase the upcoming new harvest” Mr. Nary added.

He said that more than 10 rice mills in Battambang province had been unable to receive any loans under the scheme, and called upon the government and the RDB to lower their storage requirements before the next harvest.

Rin Sokun, the owner of Chhang Lay Rice Mill in Battambang province, agreed that the current system seems to be favoring large-scale exporters, rather than smaller businesses.

“The government cooperates with the big rice mills and huge rice exporters as they are easy to work with,” he said.

“We are disappointed since what we expect from the government is now hopeless – both farmers and rice mills do not trust the government. Farmers expect the rice mills to purchase their rice since [they think] rice millers now have lots of money, but the reality is not this,” Mr. Sokun said.