Cambodia Rice Federation (CRF) on Friday announced the recent fluctuation in international rice market prices and paddy prices in Cambodia. It revealed that overall prices have decreased slightly to between 1,090 and 1,250 riel per kilogram, depending on the type.

In comparison to 2022, the estimated variation is 40 percent higher, according to the CRF, with field prices ranging from 900 to 1,300 riel, and 1,500 riel at the Vietnam border.

“The statement aims to intervene in the decrease of paddy prices to maintain farmers' profits. In the current situation of slightly decreasing paddy prices, CRF is working with its member rice millers to collect paddy from farmers to ensure that they receive a fair price for their crops,” the statement said.

Additionally, the CRF is cautioning farmers about opportunists who may try to take advantage of the recent price drop by offering to buy paddy at lower rates.

Theng Savoeun, president of the Coalition of Cambodian Farmer Community (CCFC), said this information helps to prevent the exploitation of opportunist crop traders.

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He added that to provide a certain paddy price, it is essential to understand the factors that contribute to farmers’ production costs. This includes the total expenses incurred, as well as the expected profit, to ensure they are left with a reasonable profit.

He asserted that the shortage determining rice policy seems complicated for Cambodia, as the export rice market is dependent on the neighboring countries of Vietnam and Thailand.

Savoeun is now urging the Government to consider the European market and implement a policy to compromise raw materials for local rice production.

“We should consider implementing specific policies that take into account the raw materials used in rice production,” Savoeun said.

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“We should also work to change the mindset of farmers, encouraging them to switch from using high-cost fertilizers and pesticides to organic fertilizers that they can produce themselves, which helps reduce their cost.”

Kiripost contacted Im Rachana, spokeswoman at the Ministry of Agriculture, Forestry, and Fisheries (MAFF), for comment but did not receive a response.

In the meantime, paddy prices are stable. Yang Saing Koma said to ensure the medium profit of farmer crops, OM 5451 and IR 85 rice, which are high-yielding and fragrant rice varieties, should be priced at a minimum of 1,000 riel.

If the price falls below 800 riel, it will have a significantly negative impact on farmers' profits.

Koma, an agriculture expert turned Secretary of State at MAFF noted that the Government does not have any policies in place to guarantee a minimum paddy price.

However, it has established the Agriculture Financing Policy to provide financial support to the rice sector in an effort to stabilize paddy prices.

“The Government has allocated $100 million in reserve capital to support rice millers in order to intervene in the declining price of paddy rice. This funding will ensure that rice millers have enough funds and capacity to collect paddy from farmers in all harvest seasons,” Koma said.

In 2016, the Agricultural and Rural Development Bank (ARDB), which operates under the Ministry of Economy and Finance (MEF), had a budget of $20 million.

In 2021, the budget was increased to $80 million to provide working capital for rice mills, rice processing and export companies to collect rice from farmers in all harvest seasons. The bank accepts rice stocks as collateral in accordance with Government policy, according to a local media report.

The Annual Report in 2019, showed ARDB received $45 million in capital from MEF, the ARDB for rice infrastructure, mainly to increase storage, and boost processing capacity and drying facilities in Battambang, Kampong Thom, Prey Veng, and Takeo.

When asked why Cambodia cannot set a minimum price for paddy rice to benefit farmers, compared to Thailand which does, Koma explained that Thailand has a more sophisticated rice price stabilization mechanism, and a larger rice production and export volume than Cambodia.

“Technically, it’s not much different from Cambodia's current policy of implementing market intervention in the circumstances of low prices, which will prevent the heavy impact on farmers' profits,” Koma said.

The Secretary of State empathized that the Cambodian Government takes steps to intervene in the rice market to keep prices affordable for farmers by entering into agricultural contract farming with rice mills, forming associations to buy rice from farmers, and monitoring production costs.

This allows the Government to intervene in a timely manner to prevent prices from falling sharply, causing farmers to lose profit.

According to the East Asia Forum, the rice subsidy policy for Thailand's rice farmers was a key promise, known domestically as the rice-pledging scheme. This saw the price offered to Thai rice farmers raised through direct Government purchase to levels about 50 percent above the prevailing market price.

In 2019, the Thai government agreed to pay farmers a fixed price of 21 billion baht ($682 million) in subsidies to help stabilize prices for rice farmers hurt by drought and a strong baht.

The extension of the rice price guarantee scheme for the 2021-22 season was approved at 89.4 billion baht ($2.51 billion) for rice price insurance, and 54.97 billion baht ($1.54 billion) to subsidize management and harvest costs.