Unity needed for Cambodian rice

[geovalin]

Daniel de Carteret

The Cambodia Rice Federation (CRF) is the industry’s new lead body aiming to unite the entire sector as it strives towards the government’s target of 1 million tonnes exported by 2015. The Post’s Daniel de Carteret sat down with the CRF’s newly elected president and CEO of SOMA Group, Sok Puthyvuth, this week to discuss his new responsibilities, the future of the rice industry and the influence his family ties have on doing business.

Why was CRF formed and why did you choose this role?
We had three main rice associations that were not cooperating well with each other. That is why the Ministry of Commerce initiated this. And that is why I was interested, because it was a good opportunity and we (SOMA Group) are also involved in the rice sector as well.

Everyone has plans, but those plans have not been put on the table and coordinated into a bigger plan.

What have been the issues behind the industry change?
If you look at the whole chain, there are always challenges – from seeds to farming and from paddy collection to milling, logistics and export. The different associations occupied different parts of that chain. Mostly it was exporters and millers who are the most influential players. But because of the factions among different associations and limited market access, there is this battle over who gets access to the market first.

The other issue is a different philosophy of management. All these associations together will have to figure out a way to fairly distribute resources or access to the market.

What does fair distribution to market mean? Are we still going to see competition?
Millers and exporters have different corners of the market. It’s just that most of the millers are operating below their capacity. They would like to be a more efficient so they can scale up operations.

It is not ‘when you build it, they will come’. You have to plan a bit better than that.

How is your rice body going to represent farmers?
This is the foundation of the rice sector. If the foundation is not strong, forget about the millers or exporters.

One of our major priorities is to really look at the foundations of the sector, how have the farmers been doing? Whether the access to all this support, like finance, fertiliser or techniques are up to date?

Is the rice target of one million tonnes by 2015 realistic?
We think it is possible. There is lot of pressure and burden on CRF to meet that goal. Right now we are a bit over half way. Some people look at the glass as half empty. I like to look at it as half full.

There have been issues raised with mixing foreign rice and passing it off as Cambodian. What is the perception of Cambodian rice internationally?
The perception of Cambodia from other countries is of pristine land. We do not use much fertiliser or chemicals, so we are more organic than the rest of the region. These are hidden values that not many people recognise. Our rice, in terms of quality, is better. It is just a matter of branding it to say ‘this is Cambodian rice’.

In the past there is the concern that because of price constraints, some players figured out a way to get rice from a neighbouring country and export it to Europe. This jeopardises the whole EBA and all the other exporters as well. That’s why a month or two ago we all came together to sign a compliance to say that we won’t do it again.

You said that access to finance was a key industry issue and you would aim to lower interest rates. How can you do that?
It is not difficult. It is a matter of injecting a cheaper source of funding. We have talked to institutions that are ready to do that. They just need to know: how are you going to spend what we are going to give you?

Your father is the deputy prime minister. Have your family ties helped you land the CRF job?
I am the new generation. You could say it is a coincidence that I happen to be in this position, but it was not appointed. We went through an election. I don’t think people voted for me because of who I am. If they feel that I am someone who doesn’t know what I am talking about, I don’t think they would have voted for me.

Does who you are give you greater political access than others?
I like to look at it as assets. People might think it is a liability. But it is two sides of the same coin. It is how I use it, that is what determines who I am. When you tackle a real issue you really need to understand it. You need to know what are the variables and key players. It is not power alone, it is not just ideas alone. It is a combination of those and who ever can use those well will make a lot of difference.

This interview has been edited for length and clarity.

http://www.phnompenhpost.com/business/unity-needed-cambodian-rice