ARDB approves $30M in rice industry loans
ARDB approves $30M in rice industry loans
The Agricultural and Rural Development Bank of Cambodia (ARDB) has approved $30 million in loans to the rice industry for the construction of warehouses and drying silos in four provinces, as it revealed plans to set up mobile offices in five more sites to reach rural clients.
ARDB director-general Kao Thach told The Post that the bank has been providing lines of credit to operators in the rice industry in the form of government-backed concessions for the construction of rice warehouses, storage facilities, and drying silos. The loans have been issued under Build-Operate-Transfer (BOT) agreements in Battambang, Kampong Thom, Prey Veng and Takeo provinces.
In a bid to reach more of its rural clientele, Thach also revealed the bank’s plans to set up mobile offices in further and more remote provinces, noting that the head office of ARDB – in the capital Phnom Penh – is too far away for those from faraway locations seeking to apply for loans. The exact provinces have not been revealed.
“ARDB also plans to set up mobile offices in five more provinces, and has already set up in nine provinces, mostly in the provinces around the Tonle Sap Lake and remote provinces such as Stung Treng,” he said.
Cambodia Rice Federation (CRF) president Song Saran told The Post that investment in the construction of warehouses and drying silos is a “good choice” because the Kingdom has significant potential to grow paddy.
“The investment in the construction of the warehouses and drying silos will enable the formal processing and export of our rice sector,” he said.
Saran also thanked the ARDB for “always providing credit to federation members, rice mills, rice exporters, as well as strengthening the capacity of our local mills to be able to compete and survive in the coming years, especially by increasing the number of drying silos, warehouses and milling processing plants for export [of rice]”.
Heng Pheng, a rice exporter in northern Battambang province’s Thma Koul district and a member of the CRF, said a shortage of warehousing and drying silos “a few years ago” had sharply deflated paddy prices as it had occurred simultaneously with the rice harvest in the district – just northwest of the provincial town.
But he said that this problem has “largely been resolved” in recent years thanks to loans from the ARDB.
“More warehousing and drying silos will make it easier [for us to manage rice stocks] because we, the exporters, would not have to worry about the lack of storage and drying facilities. Farmers can then sell paddy at a reasonable price, and we, as traders, can sell it at competitive rates on the market as well,” Pheng said.
But he warned that although the availability of warehousing and drying silos would no longer be an issue, farmers and traders still face other problems such as rising production costs stemming from increases in the prices of fuel and fertiliser.
According to a recent CRF report, Cambodia last year exported 617,069 tonnes of milled rice – worth $418 million – to 56 countries and territories, and 3,527,418 tonnes of paddy to the tune of $845.95 million. The federation has set an 800,000-850,000-tonne target for milled-rice exports this year, according to its president.
