A woman farms rice in Takeo province. Lower rice prices may depress the incomes of Cambodia's farmers. (Photo by: Heng Chivoan)Wednesday, 05 November 2008
Written by Khouth Sophak Chakrya and May Kunmakara
The Phnom Penh Post
Cambodia's rice farmers may see their incomes drop as the price of rice falls on lower international demand, amid a worsening global economic crisis
RICE prices have dropped 30 percent from its peak in March due to falling demand and the slowing global economy, local analysts say, potentially pushing more Cambodian rice farmers below the poverty line.
"The high price of foods and the decrease in global oil prices has caused the cost of rice to fall, forcing farmers to sell their rice at a lower price," said Yang Saing Koma, president of agricultural research organisation CEDAC, adding that the lost profits would have a marked impact on rural living standards.
Winfried Scheewe, CEDAC's marketing adviser, said that the falling prices, which reflected global trends, could make the commodity more affordable for Cambodia's poor, but would impact rural people who depend on rice for their living.
"Presently, rice prices are falling while farmers are starting to harvest their crops," he said. "This makes us afraid for this year and we are not sure whether things will continue dropping next year, since other commodity prices, such as fish and meat, are still high." He added that the actions of the government in April and May - when spiralling rice prices forced a ban on rice exports - had successfully stabilised the market.
Independent economist Sok Sinna said that the drop in prices derived from recent decreases in global demand and the after-effects of the global financial crisis, dismissing ideas that the distribution of rice by the Asian Development Bank and the UN's World Food Program has depressed domestic demand for the staple.
"The recent drop in rice prices is not connected to the ADB's rice donation. We are just helping the poor who can't afford rice because of recent high prices," said Vong Sandap, deputy secretary general in the Ministry of Economy and Finance and project director of Cambodia's Emergency Food Assistance program.
Rom Sareoun, 50, a representative of the Organic Rice Producers Association in Kampong Thom's Kampong Thmor commune, said rice brokers played an important role in the determination of rice prices.
But she said he hoped prices would soon be on the increase.
"We hope that our rice will be sold at a high price when we harvest. However, it makes us disappointed that rice brokers have reduced the price of our rice," she told the Post Tuesday.
"The government should have a program to buy our rice harvests at a higher price than the brokers to keep market prices stable."
But Som Vann, 60, an organic rice producer in Doungtong commune, Kampot province, said that rice brokers are taking advantage of the low prices, buying up rice from farmers and waiting for prices to increase before selling.
"We have lost our profits, but the brokers are the people who are making profits by doing businesses on us. They have money so they just buy our rice to stockpile and then sell it for a high price."
Yang Saing Koma said organic rice producers were in an advantageous position since they do not have to spend money on chemical fertilisers, widening their profit margins.
To encourage more farmers to produce organic rice, CEDAC has prepared a budget to buy rice at a higher price than what the market is offering, he said.
"We have proposed to borrow US$1.5 million from OLKO Credit of Holland to buy 4,000 tonnes of organic rice and 300 tonnes of regular rice from farmers to stockpile our supply, so that when the rice price increases we can export it to foreign countries," he said.
"We hope that rice prices will start increasing again in mid-2009."
RICE prices have dropped 30 percent from its peak in March due to falling demand and the slowing global economy, local analysts say, potentially pushing more Cambodian rice farmers below the poverty line.
"The high price of foods and the decrease in global oil prices has caused the cost of rice to fall, forcing farmers to sell their rice at a lower price," said Yang Saing Koma, president of agricultural research organisation CEDAC, adding that the lost profits would have a marked impact on rural living standards.
Winfried Scheewe, CEDAC's marketing adviser, said that the falling prices, which reflected global trends, could make the commodity more affordable for Cambodia's poor, but would impact rural people who depend on rice for their living.
"Presently, rice prices are falling while farmers are starting to harvest their crops," he said. "This makes us afraid for this year and we are not sure whether things will continue dropping next year, since other commodity prices, such as fish and meat, are still high." He added that the actions of the government in April and May - when spiralling rice prices forced a ban on rice exports - had successfully stabilised the market.
Independent economist Sok Sinna said that the drop in prices derived from recent decreases in global demand and the after-effects of the global financial crisis, dismissing ideas that the distribution of rice by the Asian Development Bank and the UN's World Food Program has depressed domestic demand for the staple.
"The recent drop in rice prices is not connected to the ADB's rice donation. We are just helping the poor who can't afford rice because of recent high prices," said Vong Sandap, deputy secretary general in the Ministry of Economy and Finance and project director of Cambodia's Emergency Food Assistance program.
Rom Sareoun, 50, a representative of the Organic Rice Producers Association in Kampong Thom's Kampong Thmor commune, said rice brokers played an important role in the determination of rice prices.
But she said he hoped prices would soon be on the increase.
"We hope that our rice will be sold at a high price when we harvest. However, it makes us disappointed that rice brokers have reduced the price of our rice," she told the Post Tuesday.
"The government should have a program to buy our rice harvests at a higher price than the brokers to keep market prices stable."
But Som Vann, 60, an organic rice producer in Doungtong commune, Kampot province, said that rice brokers are taking advantage of the low prices, buying up rice from farmers and waiting for prices to increase before selling.
"We have lost our profits, but the brokers are the people who are making profits by doing businesses on us. They have money so they just buy our rice to stockpile and then sell it for a high price."
Yang Saing Koma said organic rice producers were in an advantageous position since they do not have to spend money on chemical fertilisers, widening their profit margins.
To encourage more farmers to produce organic rice, CEDAC has prepared a budget to buy rice at a higher price than what the market is offering, he said.
"We have proposed to borrow US$1.5 million from OLKO Credit of Holland to buy 4,000 tonnes of organic rice and 300 tonnes of regular rice from farmers to stockpile our supply, so that when the rice price increases we can export it to foreign countries," he said.
"We hope that rice prices will start increasing again in mid-2009."
1 comment:
Out of this topic: I would like to alert all our Khmer soldiers at the front or back line please pay attention, the new Thai trick is starting, they the Thai army did adjusted or pulled out some slowly out from the front line, but to all Khmer army, we must 100% becareful, this is the tactic of the war, why? Because their jet-fighter can bomb us Khmer army at any time if somethings will happen in the next minute or soon. We Khmer must think, don't truth the Siam.
Now Siam will play more game just to make our Khmer army start shooting first then the blame will be us, and next they can use their air attack so easy, coz their army was far away from our army.
Our Khmer commanders got enough skill and experiences, nothing to worry, but just to remind all our men be ready for something will occure.
This time if the shooting start again we Khmer must move our troops far inside Thai or to hit the Bangkok, and do not forget to wake up our men who carrying the SAM-7, put them on your soulder at any time from now.
Buddha bless the Khmer army.
Khmer in Surin
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