Cambodia’s rice under fire

Cambodia’s rice under fire

Amid falling local production in Italy, officials there are calling on the European Union to scrap a preferential trade agreement that gives Cambodia’s rice exports duty-free advantages in the global market.

According to a January 31 report from rice industry publication Oryza, members of the Italian government and the country’s rice sector met to discuss a proposal for changing or discontinuing the Everything But Arms agreement, which grants developing nations like Cambodia duty-free and quota-free shipping on their exports, excluding weapons, to European countries.

The proposal comes amid claims that Cambodian rice shipments are deeply affecting the European agricultural sector, though the decrease in Italy is not sizable, according to Oryza, and Cambodian government data shows that Italy’s portion of total rice imports is on the small side.

Oryza’s report says that Italian paddy rice production has fallen 5.6 per cent, from 1.5 million tons in 2011 to 1.47 million tons in 2013. Although Cambodia’s rice exports last year skyrocketed 85 per cent from 2012, and the EU accounted for about 60 per cent of the 379,000 tons, Italy received a mere 9,874 of the whole, placing it 11th overall among 66 countries.

While it is unlikely that the EU will immediately revoke Cambodia’s EBA status, Mey Kalyan, a co-writer of Cambodia’s rice export policy and senior adviser to the Supreme National Economic Council, said producers and exporters must understand it will not last forever: “It is like an early warning sign for us to stay ready and competitive, and think beyond the Everything but Arms initiative,” Kalyan said.

The Italian government’s bid to reduce foreign imports and increase domestic rice production is the second time Cambodia’s EBA status has been threatened in as many months.

In late December, allegations that Cambodian rice farmers had intentionally mixed their product with Vietnamese rice prompted a swift warning from EU Trade Commissioner Karel De Gucht that local exporters must ensure cross-border contamination does not occur.

While rice industry insiders dismissed the allegations, they vowed to establish a code of conduct to reassure the EU that rice from Cambodia was indeed from Cambodia.

David Van, deputy-secretary general for the Alliance of Rice Producers and Exporters of Cambodia, said in an email yesterday that it was hypocritical of the Italian government to claim developing countries were receiving unfair subsidies, as European countries have long benefited from similar EU deals.

“Cambodian farmers get absolutely ZERO subsidies from their government. So we can easily argue on the ‘unbalanced’ level playing field between Cambodian farmers and EU farmers,” he said.

Kim Savuth, president of the Federation of Cambodian Rice Exporters, pleaded with the EU to continue to honour the EBA trade agreement.

“If the EU decides to tax Cambodian rice exports, Cambodian rice farmers and exporters will certainly be hurt,” he said.

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