Cambodia rushes to calm food price fears [-Keat Chhon: "Bad people are hyping up the situation for their own interests"]

Agence France-Presse

PHNOM PENH - Cambodia Thursday rushed to calm fears over spiraling food costs, as it pushed out a series of measures meant to halt price hikes as thousands of factory workers facing hunger threatened to strike for higher wages.

A lifting of the ban on imported pigs and pork products was announced earlier in the day, following moves Wednesday to bring down the cost of rice by banning exports of the staple and prevent people from stockpiling other foods.

Finance Minister Keat Chhon, in a statement released Thursday, appealed for people "to remain calm ... and not to stock up on foods, which could make the situation even harder."

The price of meat and other goods has risen by as much as 40 percent over the past year on the back of near 11 percent inflation, with rice -- Cambodia's most important staple -- now costing nearly one dollar a kilogram.

Since Wednesday, the government has released surplus rice onto the market, allowing people to buy five kilograms each at reduced prices.

While rising food prices are part of a global trend, they have hit especially hard in Cambodia, where more than a third of the country's 14 million people are mired in poverty.

Prime Minister Hun Sen asked the country's finance and commerce ministries to address "the abnormal increase of price of goods," saying rising costs are "affecting the daily livelihoods of our citizens, especially workers, farmers and civil servants."

The measures come as thousands of garment workers threaten to strike if the industry's monthly 50 dollar minimum wage is not raised by five dollars.

Garment manufacturers narrowly prevented a walkout in 50 factories Thursday morning by agreeing to talks between factory owners and workers.

While Chea Mony, head of Cambodia largest workers' group the Cambodian Free Trade Union, described this as a "positive" step, he said a strike would be called next week if negotiations failed.

"We have postponed the planned strike at the request of the manufacturers," he told AFP, but added: "The workers' current wages cannot keep up with inflation."

The garment sector is Cambodia's largest industrial employer, putting to work as many as 350,000 people, mostly young women supporting poor families in the countryside, where many live on less than 50 cents a day.

Aid agencies have warned that Cambodia's growing food crisis could threaten tens of thousands of rural Cambodians with hunger in the coming year, as even food handouts have become significantly more expensive and harder to distribute.

Faced with this recent rising tide of anger, government officials have blamed the staggering cost hikes on "opportunists" seeking to gouge prices or gain political capital ahead of national elections, now expected to be held in July.

"Bad people are hyping up the situation for their own interests," Keat Chhon said.

Food inflation hits Cambodia's poor, threatens hunger

Workers cut up fish in preparation for making 'prahok' (fermented fish paste) at Chrang Chamres village
Worker cut up fish in preparation for making 'prahok' (fermented fish paste) at Chrang Chamres village
Workers mash fish in preparation for making 'prahok' (fermented fish paste) at Chrang Chamres village

CHRANG CHAMRES, Cambodia (AFP) — On the long, gently sloping bank of Cambodia's Tonle river, Doem Lao chops half a dozen large fish heads in the early morning for the one meal that her family will eat that day.

It is the 45-year-old farmer's fourth unseasonably cold dawn in this quiet Muslim neighbourhood on the outskirts of Phnom Penh, where her extended family has set up camp with others from their village in the southern province of Takeo.

Like tens of thousands of rural Cambodians, they have joined the annual migration to the river to buy enough fish to make a year's worth of prahoc, a pungent fermented paste that is the only source of protein for many in the country's impoverished rural regions.

But the rice they brought from home has nearly run out and the fish have yet to appear in the large nets strung across the river in front of their camp.

The crude bamboo and metal mesh processing stalls on the riverbank are silent -- and February is the last month of the fishing season.

A sudden drop-off in the numbers of prahoc fish has seen their price more than triple this year, up to as high as 50 US cents a kilogramme from around 12 cents, putting this most basic of Cambodian commodities out of reach for many.

While not normally a benchmark by which to measure food security, prahoc prices have highlighted the spiralling costs of staple goods that are threatening Cambodia's poorest with hunger.

"We eat prahoc every day. Last year we made so much that we could sell some or trade it for rice," Doem Lao said, sitting in a tight circle with other village women and a few young children, while their men stood further up the river bank smoking cigarettes in anticipation of another long day spent waiting.

"This year I'm not at all hopeful. Some of us have left already. We're not going to have enough prahoc. We're not even going to have enough rice," she said.

Across Asia the cost of food is rising, for a variety of reasons, from higher demand and spiking global oil prices to environmental factors like global warming which disrupt the normal agricultural cycles.

But while other regional governments have responded by cutting import tariffs or establishing national food stockpiles, Cambodia appears reluctant to step in and halt the continuing upward climb of food costs.

For poor Cambodians, this means that in addition to losing their traditional staples like prahoc, they are not able to supplement their already meagre diets with other foods, particularly meat.

"Everything now is so expensive," said another village woman, Bhum Sap, rattling off the current prices of chicken, pork and beef, which can cost as much as five dollars a kilogramme, a fortune for Cambodia's estimated 4.6 million people struggling to live on less than one dollar a day.

Cambodia, in some ways, has become a victim of its own economic success. The country has recorded economic growth averaging 11 percent over the past three years, spurred on by a galloping tourism sector and strong garment and building industries.

Growing interest by foreign investors and a real estate boom that has helped create more than a few overnight millionaires have resulted in an unprecedented explosion of wealth.

But the sudden influx of cash into the fragile economy has not come without its pitfalls.

Over the past year inflation has spiked at 10.8 percent, compared with 2.8 percent at the end of 2006, driving up the cost of food and other staple goods and pushing the most vulnerable deeper into poverty.

"About 8.5 percentage points of December's inflation rate of 10.8 percent was accounted for by food price inflation," said the International Monetary Fund's Cambodia representative John Nelms.

For as many as 2.6 million people living in extreme poverty, the situation has been worsening over the last several years, which have been marked by poor harvests brought on by natural disasters such as flood or drought.

"Too many Cambodians still suffer from hunger and malnutrition for some or most of the time," the World Food Programme (WFP) said on its website.

The unrelenting rise in food costs only adds more depth to their misery.

"WFP is very concerned about the general increase of the cost of the staples, in Cambodia as well as elsewhere," the agency's country director for Cambodia, Thomas Keusters, told AFP.

Food inflation has even affected aid efforts at a crucial time, as aid agencies anticipate the need for more handouts in rural areas facing a leaner than normal year ahead.

In January last year, the WFP paid 237 dollars per metric tonne of rice, a cost that has now risen to 367 dollars a tonne, Keusters said.

"For every dollar received from the international and local donor community, we buy 55 percent less rice. With the general increase in the cost of food, the need for food assistance will not decrease," he said.

"On the contrary. As Cambodia faces new challenges such as climate change, changes in food availability, high energy prices, globalization and many more, we all need to strategise better," he said.