Commerce minister puts rice ball in Hun Sen’s court

Commerce Minister Sun Chanthol speaks at a private sector development forum in Phnom Penh last year. Photo supplied

Commerce minister puts rice ball in Hun Sen’s court

Fri, 11 March 2016 ppp

Cheng Sokhorng

Commerce Minister Sun Chanthol has forwarded a report on urgent actions required to address the rice sector’s woes to Prime Minister Hun Sen, suggesting a limit on rice imported and making available cheap capital to distressed millers.

The report, which was submitted yesterday, picks up four urgent measures from a nine-point action plan sent to Chanthol by a group of millers and exporters, whose initiative is called CRISIS (Cambodian Rice Industry Survival Implementation Strategy).

The suggestions in Chanthol’s report mirror those made by the CRISIS group on Monday and include a 100,000 tonne a year restriction on imports of milled rice from the Kingdom’s neighbouring countries, which the group says is not a violation of any World Trade Organisation regulations.

The report also suggests increased monitoring of rice imports at border entry points and imposition of punitive action on millers found guilty of mixing local and imported rice for export.

To tackle the sector’s financial problems, the report asks that the government facilitate access to $250 million in loans at a lower rate of 4 per cent, lowering electricity prices for millers to 400 riel per kilowatt hour, and negotiating access to the Laem Chabang port in Thailand to reduce logistics costs.

The high costs of loans – 8 to 10 per cent at commercial banks and between 20 to 30 per cent with microfinance lenders – has lead to nearly 40 per cent of millers going bankrupt in the last three years, the report states.

CRISIS member and CEO of Battambang-based rice miller Brico Kann Kunthy said the group was consulted before the minister decided to send only four of the nine suggestions made, which he said were a top priority.

“We had to select the urgently required measures of the nine important actions we submitted to the minister,” he said. “We hope to get positive results on at least some of the four points.”

Kunthy said CRISIS would work with the Cambodia Rice Federation’s (CRF) proposed committee to find solutions for the rice sector’s problems, despite the CRF proposing only two suggested actions at a press conference it held on Wednesday.

“Even though our issues are different from the ones they submitted, it is still a push to get action from the government”, he said.

“We have to deal with the short-term challenges first, but the CRF always focuses on long-term plans,” he said.

In response to criticism of its handling on the rice sector, the CRF proposed that rice importers should have a licence and facilitation for a loan package from the Rural Development Bank for $20 to $30 million.

This followed a meeting of CRISIS and Chanthol last week, where the group not only highlighted the problems in the sector, but were also critical of the functioning of the CRF, calling for structural and electoral reforms before elections are held in May for the next mandate.

CRISIS, which started in February and initially called itself RISKS (Rice Industry Strategic Key Solutions), has increased its members from 18 last week to 24 this week, with members coming from the rice producing provinces of Battambang, Pursat, Banteay Meanchey and Prey Veng.