Rice federation requests $80 million to aid sector
The Cambodia Rice Federation has asked the government to disburse $80 million through the Rural Development Bank (RDB) to help millers purchase paddy.
CRF president Chan Sokheang made the request on Tuesday during a meeting with RDB director-general Kao Thach.
Sokheang told The Post on Thursday that the rice federation asked the government to increase the budget dedicated to helping the sector by $30 million from the current $50 million. The money in the fund will be used by millers to buy paddy in the next harvest season.
“Part of the budget [to help the rice sector] has been diverted to the Ministry of Economy and Finance. CRF asked the government not to take money out of the fund and instead add to it as millers will need the money to buy paddy starting next month.
“We are facing difficulties obtaining credit, with commercial banks reducing their lending to the agriculture sector from $1 million to just $500,000.
“We are asking the government for help so that we can meet our goal of exporting one million tonnes of rice,” he said.
CRF also asked the state-sponsored bank to extend repayment periods from six to 12 months.
“We ask for the repayment period to be delayed as rice exporters and millers face a lack of liquidity as a result of Covid-19,” CRF said in a press release.
Sokheang said Kao Thach had initially agreed to disburse the funds but that the government had the final word.
In December, the Ministry of Economy and Finance allocated $50 million to a fund managed by RDB that firms can use to buy rice during the harvest season.
Signatures of Asia general manager Chan Pich told The Post that his company plans to buy 200,000 tonnes this season with a $500,000 loan from RDB.
“Increasing the fund will definitely help the rice sector. My company, for example, plans to spend $4 million to buy rice and will need to borrow money,” he said.
In October, the Cambodia Rice Federation (CRF) set the goal of reaching one million tonnes in exports of rice by 2022.
“To make this happen, we have a credit package of $200 million with a special interest rate to purchase rice during the harvest season,” said then-president Song Saran, adding that this amount of money can buy at least 500,000 tonnes of jasmine rice.
Cambodian rice exports reached 620,106 tonnes last year, a one per cent drop compared to 2018. It was the second year in a row that rice exports experienced a slight decline.
The Kingdom’s rice exports were valued at $501 million last year, down 4.3 per cent from 2018.