Farmers Needs to Watch Market: Economist

Cambodian farmers prepare seedlings for their rice plantation at the paddy rice farm in Kandol village, Kampong Cham province. (Photo: AP)

Kong Sothanarith, VOA Khmer
Phnom Penh Friday, 07 May 2010

“Some companies will lose in a price war, and they will quit. The companies that are sill in operation will raise their prices. This is like a monopoly, and it can be catastrophic for the economy.”

Cambodian farmers need to learn to focus on the requirements of the market if they are to benefit in agriculture, a leading economist said Monday.

Farmers are used to planting crops for each other, then selling the surplus, but that culture must change, Din Virak, an economist and lecturer at several Phnom Penh universities, told “Hello VOA.”

Farmers are selling their produce at prices cheaper than market prices, he said.

Cambodia’s economy was hit hard by the economic downturn in 2008 and 2009, but the government and other international agencies are predicting a rebound in 2010, with an estimated growth of 5 percent.

Much of that will come from garments and tourism, the country’s main earners, but Cambodian officials have said they want agriculture to play a larger role in the economy.

Cambodia is working to sell its good on international markets and within Asean, and there are plans to redistribute some wealth through irrigation projects and other boosts to agriculture, Din Virak said.

Cambodia is mainly a free market, with little government interference in pricing, he said, except for a recent edict by government ministries to set a price floor on mobile phone rates, after a price war threatened to reduce prices too low.

“In principle, the government can only fix maximum and minimum prices in necessary cases,” he said.

“Some companies will lose in a price war, and they will quit,” he said. “The companies that are sill in operation will raise their prices. This is like a monopoly, and it can be catastrophic for the economy.”