Cambodia Looks to Put Its Rice on the World’s Plate - New York Times

[geovalin]

KBAL GOH, Cambodia — For as long as Cambodian rice farmers can remember, their product has had an unsavory reputation. Tough, dirty and unmilled, it was impossible to cook evenly, and even farmers traded it as pig feed in exchange for cash or better-quality rice from Vietnam or Thailand.

Even while Cambodia recovered from decades of war and other areas of agriculture flourished, rice production languished, a national embarrassment in a country where 80 percent of the population works in paddies. In 2009, Cambodia exported just 12,613 tons of milled rice, putting it at the bottom of the global heap.

But as Thailand, one of the world’s largest rice exporters, struggles with political instability, Cambodian exports have improved along with their quality; the rice can now be found in high-end grocery markets in the West. Last year, Cambodia was the world’s fifth-largest exporter of rice and the second-biggest exporter of premium jasmine rice. Sales of milled rice abroad reached 378,856 tons.

No one knows this transformation better than Bun Chan Tony. His six hectares, or about 15 acres, earn him $6,000 a year, substantially more than in the past.

“When the rains come and there is a lot of water, we plant rice. When it’s drier, we plant corn, but rice is a staple and people must have it,” said Mr. Tony, although he said he would prefer to grow more corn than rice, which he says requires more work.

Modern milling systems adopted in the last few years have helped elevate Cambodian rice to the international market. And locally milled rice has also received an unexpected lift from Thailand, where rice hoarding and huge government subsidies threatened to produce an enormous shortfall of rice on global markets.

Cambodia hopes to make the most of the opportunity, setting a target of one million tons of milled rice for export by the end of 2015. It already has the milling capacity, and customs fees on rice exports have been scrapped.

In a bid to reach that ambitious target, the rice federation was formed in May. It merged three industry bodies into one and elected Sok Puthyvuth as president. Mr. Puthyvuth, the son of Cambodia’s deputy prime minister, Sok An, said the move had eliminated some costly competition, defined the industry’s goals more clearly and created a unified voice for lobbying.

“The plan that we are preparing is to focus on the whole chain. It means that we are looking at how much farmers will get, how much millers will benefit, and how much exporters will get, based on market prices,” he said.

Still, there are formidable obstacles to reaching the new target.

For one, the country must tap new markets, like the United States, China and Africa. Just 1,780 tons have been exported to the United States so far this year.

Mr. Puthyvuth also said that quality needed to improve further, as do relationships among growers, millers and exporters. Before the rice federation was formed, the sectors were divided into three industry bodies. The government has lamented that only 40 percent of Cambodia’s nine million farmers can produce rice suitable for export. Too many farmers still use chemical pesticides with cheap, poor-quality seeds — practices the government is working to change through education.

Continue reading the main story

“Trust within all sectors — from farmers to millers, and exporters — is not strong enough yet,” he said. “We have to figure out ways to make them trust each other. This is the main obstacle we are facing. When they have quality rice, they receive a good price.” Low-end, long-grain white rice sells for $250 to $290 a ton; high-quality jasmine rice can go for as much as $410 a ton.

The rice industry also faces opposition in crucial markets. Italy wants the European Union to impose an import tariff on Cambodian rice, arguing that Italian-produced rice cannot compete on price and that local jobs are being lost as a result. Mr. Puthyvuth added that although the Thai subsidy program created more demand for Cambodian rice, it also caused the price to fluctuate dangerously.

“Thailand has dropped their prices substantially in order to export rice from their warehouses, and it affects our exports. Our members could not sell their milled rice,” he said.

But the changing regional market is also creating opportunity for Cambodians. In Europe, rice imports are expected to be 99 percent pure, containing few rice grains of any variety other than what is on the label, but many Cambodian farmers are still reluctant to buy expensive seeds. Instead, they prefer to replant whatever has been growing in their paddies, saying it is easier to produce feed for Vietnamese livestock than to grow rice that can make a decent pudding.

This has created a niche market for other producers focused on high-quality rice and geared toward socially and environmentally aware consumers in the West. One of those growers, Ibis Rice, is trying to improve the traditional perceptions of Cambodian crops. Although the company is not yet exporting, its methods illustrate how growers are working to improve quality.

An Ibis spokeswoman, Vanessa Ferrer, said the company, certified by the Wildlife Conservation Society, was formed in 2009 as an environmentally friendly producer working with rice-growing villagers who shared a desire to protect local wetlands, a natural habitat for the ibis, a migratory bird.

She said annual demand could be as high as 4,000 tons. But sales have been restricted to just 400 tons, with production curtailed by the conditions of the conservation society. The current harvest of 435 tons represents a 54 percent increase from the 2012-13 growing season, figures show. Annual sales have tripled to about $121,000 in the last four years.

“I’ve had to tell so many people ‘I’m sorry but we can’t,' ” Ms. Ferrer said. “We cannot give them enough rice. We’re not quite there yet. Maybe in four to five years.”

Mr. Tony said he was trying to improve the quality of his rice, avoiding chemicals and paying top dollar for high-end seeds, up to $3.50 a kilogram.

But he also stressed that many of his problems stemmed from a government that had yet to deliver on creating greater access to markets and higher prices. And many farmers cannot read, live in remote areas and rely on middlemen, often strangers, who buy the rice for milling and export, dictating terms and prices.

“They won’t tell us how much of our rice they sell, or how much they make,” he said.

http://www.nytimes.com/2014/07/30/business/international/cambodia-looks-to-put-its-rice-on-the-worlds-plate.html?_r=0