Phnom Penh (FN), Apr. 8 – Cambodia, a country devastated by civil war for decades, after Pol Pot genocidal regime on 7 January 1979, people started to cultivate rice to supply families and local market. Following years of development headed by Prime Minister Hun Sen, Cambodia is known internationally and lives of her people have improved.

In 2010, under a strategic decision by Prime Minister Hun Sen, Cambodia’s farming has shifted from supplying local needs to supplying international market. It opens a new chapter of Cambodia’s history after overcoming decades of civil wars.

In fact, 34 percent of Cambodia’s economy depends on agriculture; the Kingdom has 2.8 million hectares of cultivated lands for rice plantation in rainy season; 534,024 hectares of cultivated lands for rice in dry season; 25,249 hectares for mixed crop plantations, and 47,919 hectares of agro-industry plantations. These figures can support up to 34 percent of the total workforce. Apart from agriculture, Cambodia’s economy depends on textiles, tourism, and industry.

Thanks to large-scale agricultural sector, the Kingdom produced a total of 31 million tons of food in 2019, generated income of USD 10 billion. Cambodia exported 7 million tons of food and earned around USD 3 billion.

Of the total Cambodian food exported, rice stood at the top export category. In 2019, Cambodia exported 620,264 tons of rice, generated income of approximately USD 500 million.

According to 2019 report from Cambodian Rice Federation (CRF), Cambodia exports three types of rice, including fragrant rice, white rice, and steamed rice to China, the EU and the ASEAN Member States.

In 2019, Cambodia received a quota of 400,000 tons to export rice to China. Thus, China has become the largest market for Cambodian rice. Last year, Cambodia exported 248,105 tons of fragrant rice to China, an increase of 33 percent over the same period last year.

Cambodia exported 40 percent of rice exports to China. The massive export of fragrant rice to China has made China the largest importer of Cambodian rice, taking over Europe, the former largest importer of Cambodian rice, according to Veng Sakhon, Minister of Agriculture, Forestry, and Fisheries.

"I think we all know that Chinese population of around 1.4 billion, requiring lots of food. China has a huge market for our agricultural products. While we hope to expand our market in China in the near future, we need to be prepared and taken into account the cultivation, processing, packaging, and transportation. Because China has made it clear that before we can export our products, it is necessary for the Chinese Government to examine our processes on cultivation and packaging,” said Minister Veng Sakhon.

Exporting rice to the People’s Republic of China is a positive sign of the development of the rice sector in Cambodia, said Song Saran, CEO of AMRU Rice Cambodia. China is a developed country and the Chinese people prefer premium quality, the fragrant rice, which is an opportunity for Cambodia to capture the world's largest fragrant rice market.

“Because our company focuses on fragrant rice and boosts exports of this type of rice, the Chinese market is a popular market today as it called New Emerging Market. China is rapidly developing and its income has increased from the average to above average, making its people concerned about their health thus choose rice with a great quality,” said Amru Rice CEO Song Saran.

In 2019, China has pledged to purchase 400,000 tons of rice from Cambodia. Cambodian rice exporters and farmers were delighted and started to grow more fragrant rice. They hope they can sell their products with a higher price and improve theirs' livelihoods.

Sim Sokhon, chief of Trea commune in Takeo province, said that in 2019, rice farmers harvested better quantity of rice compared to 2018. In 2019, farmers can harvest approximately 4-5 tons of rice per hectare. They are also happy with better price and markets for their crops after switching to grow fragrant rice.

“In the rainy season, farmers grow a heavy type of rice, and lighter type in the dry season. The price of rice is higher compared to the previous year. Before only 650 riel (USD 0.16 per kilo), but now 770 riel (USD 0.19 per kilo), which helps improve the lives of people in my commune,” said commune chief Sim Sokhon.

Nguon Pak, one of the farmers in Trea commune, also expressed his delight as rice price and his harvests have increased. The 2,175 families in Trea commune are looking forward to growing fragrant rice to supply to international market.

“We are happy if they buy from us; we export with good price it means our government has helped solve the problem. If they do not buy, we do not know where to sell our products. I would also like to thank Prime Minister Hun Sen for helping us. It is hard to find a good leader. Leading a country is not easy,” said Nguon Pak, one of the villagers.

China agreed to purchase Cambodian rice in 2017 with a quota of 100,000 tons; but Cambodia exported nearly 200,000 tons of rice to the People's Republic of China; therefore, the Chinese government increased the quota to 300,000 tons in 2018.

Unfortunately, in 2018, Cambodia exported only 170,000 tons of rice to China. China increased its quota to 400,000 tons in 2019, but Cambodia could supply only 240,000 tons.

Minister Veng Sakhon said that the lacks of ability to meet the demands of the emerging market of the world's second largest economy is a matter of concern for related ministries and institutions.

Minister of Agriculture, Forestry and Fisheries said, "Some of our challenges are that China has set Cofco, a state-owned company, to manage rice imports, and usually, each country is careful in monitoring its imports by balancing domestic products and imports. That value has been added; even if we added 18 more companies to the existed 26, it is still a challenge for Cambodia.”

We are working with the Ministry of Commerce to set up a negotiation with Cofco. Cofco is a state-owned company of the People's Republic of China, and we are pushing private rice exporter of Cambodia to work closely with Cofco. It is the duty of the Ministry of Commerce to accelerate more exports of rice to China.

In addition to the value added that makes price of Cambodian rice in the Chinese market more expensive, the combination of high cost of the Cambodian rice production chain is also a factor contributed to the high price of Cambodian rice in international markets, according to the Minister of Agriculture.

Other factors include transportation infrastructure, resulted in time consuming and high cost, the high cost of electricity and lack of water for crop cultivations are also issues. Competing with neighboring countries, including Thailand and Vietnam, is also challenging.

“Our exports face some challenges, especially in rice processing because of the high cost of electricity, and secondly, our transportation is very expensive. Thirdly, competing for market is also our challenge. In the past, Thailand and Vietnam already had a market and we must compete with them. By demonstrating good rice quality and taste as well as natural production, we only have a small access to market. Due to these competitive challenges, our exports have not increased, but slightly decreased. In particular, some countries in ASEAN like Vietnam, Thailand and Laos and Myanmar are competing so the market is challenging for our rice exports,” said Minister Veng Sakhon.

Another important issue for exporting rice to Chinese market or other countries is “seed” because Cambodian fragrant rice is currently dominating the Chinese and international markets.

According to Song Saran, Chief Executive Officer of AMRU Rice Cambodia, the cultivation lands of Cambodian farmers would meet the local and international market demand as citizens can change from harvesting heavy rice to fragrant rice. However, he sees that apart from infrastructure, electricity cost and irrigation, another obstacle is providing good seeds to farmers.

“The problem we face is lacks of seeds. We do not have enough to supply to our farmer. Therefore, some of the fragrant rice seeds that the newcomers switch to are not high quality. Secondly, some seeds are contaminated with disease when we switch from one type of rice to another. Thirdly, not enough space is also an issue, so farmers will switch from harvesting dry-season rice to fragrant rice. In this phase of change, we will face a number of issues that require assistance from technical experts from both the Ministry of Agriculture and other organisations, partners and the farming community to boost their capacity and improve their flaws,” the CEO said.

Regarding growing rice issues, as a farmer in Takeo province, southern part of Cambodia, Nguon Pak said that if the government or any organisation offers fragrant-rice seed, which is popular in the international market, he believes farmers will switch to growing fragrant rice. This will help improve the lives of Cambodian farmers and build Cambodian reputation. He also called on the government to consider restoring existing irrigation canals or building more irrigation in order to ensure there is sufficient water supply for cultivation.

“Of course, we need the pure seed, but with low price. Technical training is also important, otherwise, the results are less productive. More importantly, there must be enough water and if not, people cannot do anything. The cultivation can usually be done once a year, but possibly twice with adequate water,” the farmer said.

Although Cambodia has not yet been able to export rice as determined in the quotas, the amount of Cambodian rice exported to China is the largest compared to EU and ASEAN markets. As CEO of AMRU Rice Cambodia, Song Saran highly commends the efforts to push Cambodian fragrant rice into the Chinese market. Although Cambodia has not yet been able to export as set in the quotas, he believed that Cambodia will be able to fulfill the quotas in the near future.

"The Chinese side has been greatly assisting us over the past two years. They strongly help promote our rice and increase sales in their markets. I would like to thank China on behalf of Cambodian Rice Federation and people are happy about it. One of the things we appreciate is that they help build our national brand and are committed to be our partner and we have seen good results,” said CEO of AMRU Rice.

“Over the last five years, Cambodia rice exports have increased from 30,000 tons to more than 200,000 tons. It is a satisfied growth of our market in China. Both sides (Cambodia-China) have worked together to achieve our MoU agreement of exporting 400,000 tons. I think sooner or later, if the mechanism they are working on is accurate and transparent, we will be able to reach our goal soon.”

As an iron-clad friend under the leadership of the two countries' leaders, China has made a significant contribution to the development of Cambodia in general and in particular agriculture.

In addition to opening up markets with high quotas, China also helped develop other areas of Cambodia’s agro-industry, according to Minister Veng Sakhon.

"Indeed, China has been helping Cambodia continuously, especially after 2009 and 2010, and we have reached a Memorandum of Understanding (MOU) to exchange views on agricultural development. These include trainings, supports for some agricultural equipment, agricultural machinery, the establishment of agricultural product testing centers, and the development of biogas plants that we are currently ongoing. Lastly, the Chinese side also signed a MoU on master plan on the development and modernisation of agriculture since January 2018. They are helping us on agricultural sector, especially on the cultivation of main crops for exports to China in the future."

China has not only imports Cambodian rice to its markets, but also provides more assistance in developing the agricultural sector in Cambodia. Although they contribute slightly in agriculture sector, they have helped Cambodia develop electricity infrastructure, which is an important sector in national development, as well as agriculture and other sectors in Cambodia.

Since the first phase of exporting rice to China in 2009, Cambodia was only able to export from 220 tons to more than 120,000 tons of rice. Until 2017, the Chinese side has provided quota to import 100,000 tons of rice from Cambodia and Cambodia exported 190,000 tons of rice in that year. In 2018, the Chinese side increased its quota of 300,000 tons of Cambodian rice, and Cambodia exported 170,000 tons of rice. In 2019, the Chinese side has continued to increase its quota to more than 400,000 tons of Cambodian rice, which has resulted in Cambodia exporting more than 240,000 tons of rice, an increase of 33 percent compared to the same period in 2018.

Although Cambodia has not yet been able to meet the quotas China has provided, in 2019, China has become the largest market and buyer of Cambodian fragrant rice. China has overtaken the European Union, which was once Cambodia's largest rice market.

It is worth mentioning that Cambodia's three major international markets are China, Europe, and ASEAN. The biggest buyers in ASEAN are Malaysia, Brunei and Singapore. Cambodia is considering the Philippine markets, while Australia is also one of the fastest-growing market of Cambodian rice.
=FRESH NEWS