Excellencies, Lok Oknhas, Ladies and Gentleman,
Distinguished National and International Guests!
Today, I am very pleased to attend the opening of the 5th Cambodian Rice Forum”. On behalf of the Royal Government of Cambodia, I highly appreciate the close cooperation among the Cambodia Rice Federation, the Federation of Association for Small and Medium Enterprise of Cambodia, relevant ministries-institutions, and development partners for the smooth organization of this important event. This Cambodian Rice Forum provides an opportunity for all stakeholders to share ideas, experiences and valuable information among yourselves, contributing to find appropriate solution to effectively address challenges in the rice sector.
Thanks to the concerted efforts of the Royal government of Cambodia, all relevant stakeholders and active participation of farmers over the past years, we have made significant achievements with great pride in agriculture sector, particularly the increase the increase in productivity and agricultural diversification.
Taking this opportunity, I would like to reconfirm that the policy on promotion of paddy rice production and export of milled rice, which was put in place by the Royal government in 2010, set two clear targets: (1) increasing paddy rice surplus of more than 4 million tons and achieve milled rice export of at least one million ton, and(2) promoting the branding of Cambodian milled rice in the international market. In general, we have achieved the two targets as Cambodia has exported milled rice to more than 60 countries, while Cambodian jasmine rice won the World Best Rice Award in recent years. For the first target, we reached the first part of the target of having paddy rice surplus at least 4 million tons through the increase of paddy rice from 3.5 million tons in 2009 to 4.7 million tons in 2015 while achieving 50% of milled rice export of at least one million ton with equivalent of around 530,000 tons of milled rice in 2015. Overall, we have achieved more than 87.50% of the set target. This can be evaluated that we have made good results with great pride.
At the same time, I wish to express sincere appreciation on the efforts of the management of all local and international organizations for close cooperation to realize the policy on promotion of paddy rice production and export of milled rice. On behalf of the Royal government, I highly value the Ministry of Agriculture, Forestry and Fisheries, particularly the organization dealing directly with rice production, Ministry of Commerce, in particular the organization involved directly with the export of rice and Ministry of Economy and Finance in the divisions dealing with rice financing and the Cambodia Rice Federation dealing with the branding of Cambodian rice in the foreign market. Also, I wish to express sincere appreciation on the efforts of relevant ministries, national and international institutions for their respective contributions to the sector in order to achieve such enormous achievement with great bride. Most importantly, I wish to express my sincere thanks to all Cambodian farmers for your great efforts and hard-work in the rice production and for your significant contribution to the World Best Rice Award.
Along with this great achievements, more important task for us is to sustain this good result through identifying new method and further taking action to increase paddy rice production and export Cambodian milled rice to foreign market, particularly in the context of recent fast growing development of global situation. If we make deeper analysis on why we fail to achieve the set targets, we are able to identify two key factors: (1) internal structural issue and (2) external problematic factors. The internal structural issue has not been tackled properly such aswater supply problem, proper use of pure seed, modern farming technology, insufficient working capital, warehouse and market etc. which makes certain quantity of rice being exported to neigbouring countries. External factor refers to the situation where other countries in the region and the world also produce rice like Cambodia especially among Mekong countries such as: Vietnam, Thailand, Laos, and Myanmar which promotes the fall of rice’s price in the world‘s market and that also affects Cambodian rice’s market.
Toll-Free National Road 4 Increases Export Competitiveness
On this point, I would like to speak a little about the subjective matter. I used to talk about one fact that we have gold but we did not have paper with which to wrap it. We are in need of warehouses, rice mills, capital, etc. We also have issue relating to trade facilitation as illustrated in price bidding for supply of rice to the Philippines, for whom Vietnam and Thailand also joined. After the Royal Government decided to end maintenance contract of the National Road 4, I hope that the Rice Federations and those exporters of other produces that used to pay for using national road 4 have now benefited from it. On this matter, one should not look at it as facilitating our people not to pay for use of the road. It also helps facilitate flow of trade, reduce cost, while increasing competitiveness in external markets. I hope that next year, when the Philippines calls for more rice supply, Cambodia will be competing with Thailand and Vietnam to provide a reasonably acceptable price offer.
Objectively, I have worked with my dialogue partners as Prime Ministers, Presidents, and Vice Presidents in off and on the records discussions. What is remarkable here is the fact that developing countries are competing among themselves of their produces and products, while richer countries do not have things to compete. For example, Air Bus is from European countries and Boeing is the USA brand. BMW is German. While, however, countries in ACMECS or Greater Mekong Sub-region countries, all of whom produce rice, are competing their produces with one another, leading to buyers’ strength in lowering price. India also stores a lot of rice and has a wider market. Pakistan also is a major rice producer.
Not only rice but other produces as well have put us all in a situation that we must seek for resolution among us developing countries or how do we poor countries go about resolving this issue? For rich countries, in addition to the fact that they do not have peer competitors for some of their monopole products, they also have means to bar our products/produces from entering their markets such as requiring certificate of quarantine or quality control. This has allowed them to export into our market freely and fully while we cannot export our produces/products to theirs. This has also contributed to the fact that our farmers are producing for benefit that is even less than the cost of production.
Prices of Food and Oil Come Down Together
I have received through social media and press requests from our farmers. However, it is not an issue of Cambodia alone. If supply in the markets outside is down, leading to price going up, the price of local produce will go up too. Cambodia no longer produces for consumption but for export as we already stated in our outward looking strategy and policy. We are producing to serve the need for exports, not only rice but also various other things. In recent development, prices of rice, cassava, rubber, etc. has gone down, not only in Cambodia. There is one welcoming development, though. Previously, when prices of agricultural produces went down, price of oil stayed high. Now they call came down together.
As rotating head of ASEAN, in the G20 summit in Los Cabos, Mexico, I put out proposals in relations to Food Security and Energy Security, the main idea of which was to seek for a balanced price of food and oil. The price of oil then was going up very high while the price of food went down. It was not an issue for Cambodia alone. We had to study the problem and take common measures by comparing both internal and external factors. We worked together for a solution.
With the spirit to resolve this issue, I would like to invite Supreme National Economic Council to cooperate with Ministry of Commerce, Ministry of Agriculture, Forestry and Fisheries, Cambodian Rice Federation, as well as related ministries to study and evaluate policy that promote rice production and export in order to create foundation to set out the goal for policy framework strengthening and further shape the measures. Truly, this task shall be coordinated by economic and finance policy committee that led by Deputy Prime Minister H.E. Keat Chhon to ensure that all measures are interrelated, complement each other, and consistently implemented.
- Excellencies, Lok Oknhas, Ladies and Gentlemen, and Fellow Participants,
For rice sector, I believe that it is a potential sector for the future because the growth of rice demand for food will eventually grows with the growth of the world’s population, although the higher income the country is the lesser rice it is to be consumed as food. With this spirit Royal Government of Cambodia will continue to encourage all ministries and related institutions with strong commitment to cooperate with all related parties for the purpose of strengthening competitiveness and to facilitate Cambodian rice trading for businessmen. In accordance with the promotion of this sector, I would like to draw some attentions to some key points as such:
First, irrigation system is the main element of cultivation: Although our irrigation system does not cover thoroughly on all area of rice, Ministry of water resources, Ministry of Agriculture, Forestry and Fisheries, provincial authorities, and local authorities shall cooperate to continue restore and develop the irrigation system and search for effective water management mechanisms in order to enable farmers to cultivate several times, from one time to two or two to three times per year.
Irrigation and Intensive Farming, Rice Seed for Local Supply and Export
… Solving irrigation need is important and we must continue to implement two strategies – extensive and intensive developments. By intensive, we mean that we must make effort to cultivate more on same size of land through settlement of water need for irrigation, increasing cropping patterns and rice outputs […]
Second, the promotion of Cambodian rice’s brand and the importance of market search: Up to now, Cambodian Romdual rice was ranked as the world best quality rice within three consecutive years 2012, 2013, and 2014. This is an opportunity for Cambodia to have advertising campaign of its prestige rice abroad. In that sense, the Cambodian rice federation shall cooperate with related stakeholders to create single brand for Cambodian rice and shall register properly. Meanwhile, they shall have rigorous inspection mechanisms on the usage of brand in order to prevent fraud by any means.
Third, Rice production in line with market demand: This point shall have consistency between the producer and processing exporter in volume, size, and type of rice. The inconsistency between all roles in the production chain is the reason that we have excess rice but our exports are limited. For instance, farmers cultivate Chulsa or Neangkon rice etc. However, exporters export Romdual rice which is the cause either we do have rice production but no market or have markets but do not have the correct type of rice to supply the demand.
… We should be aware that human tongue or taste is not same. Rice from India and/or Pakistan is good for markets in the Middle East but it would not cater to our taste for rice. In Japan, their rice is delicious and exporting rice to Japan would not be easy. My taste for rice is going well with rice from Cambodia, Thailand, Myanmar, Laos, and Vietnam but not well with that from India. I tasted it in Kuwait. Even local species in Cambodia, we also had some that is hard to consume. We need to look into certified seed development and production for supply locally and export […]
Fourth, Focusing on Romdual rice seed, which has high quality and market: We shall encourage farmers to cultivate this seed in accordance with the soil that would provide the best result. However, Romdual rice is a seasonal type of rice, which we can produce only once a year during the rainy season. Meanwhile, we shall promote the production of other rice seeds, which are not seasonal, enable to produce several times a year, and is higher in value than the white rice. We also have some fragrance rice seeds, which are not seasonal and can be sold for higher than normal white rice’s price. We shall promote the cultivation of this type of rice seeds in order to increase the rice to export as well as assist with sustainable supply and the process of recycling of biomass plant to operate at its maximum capacity level.
… Where is our weak point here? The rice Rumduol is a good species. Its taste and quality won top class. However, for this rice species, because it is seasonal, we cannot produce it more than once per year. We therefore need to do a research for high quality and taste rice but unseasonal. As long as it is seasonal, people grow and harvest only once within a specified period in the year. This created difficulty for a certain rice mills that they could not mill only one species of rice and only once a year […]
Fifth, sufficient production of pure seeds for cultivation: Foundation seed that was produced by Cambodian Agricultural Research and Development Institute (CARDI), shall allow private sector to produce from this foundation seed by selecting pure seeds to supply farmers. Related institutions shall properly study on the seed quality evaluation mechanisms before supply in order to prevent fraud that would affect trust on seed consumption as well as expected rice production.
CARDI to Offer Right for Seed Production
… I would ask for consideration whether CARDI (Cambodian Agricultural Rresearch and Development Institute) could give rights to some regions to produce rice seeds. It is true that CARDI will be the one to provide foundation seed but CARDI would not be able to produce seed for farmers’ need. As far as seed is concerned, we already had experiences from seed brought in from Yunnan of PRC. The seed does offered high yield. When we grew it for the first time, the yield came out high. However, the second cultivation showed that the species deviated. According to experiences, there is a need for specified zone to produce rice seed to prevent them from deviation. There could be cooperation with private sector on an area of 400 to 500 hectares to produce rice seed to supply to local producers for wider production serving need for export.
Sixth, Reduction of Production cost is one of the important factors for promoting more competition for Rice Sector with other countries: In this regard, Cambodian government has taken an effort in facilitating the rice sector, as it is a prioritized sector and deserved to be spotlighted. This includes loans with preferential interest rate through Asian Development Bank, fee facilitation at every port, Value Added Tax exemption on the import of machinery and agricultural material for serving the rice sector, import facilitation through online application for Certification of Origin and reduction of electricity cost that will be implemented in the near future. In addition, we also need to pay more attention to the restoration and development of waterway and railway in order to reduce the production cost and enhance the competitiveness of our goods at the global market.
Rail as Mode of Transportation, Warehouses, Silos and Dryers
… I would take this opportune moment to affirm that railway between Phnom Penh and Sihanoukville’s blue seaport functions now. There have been thoughts about transportation of heavy materials because transporting by trucks would damage roads. We should now orientate heavy material transportation to using rail instead of road. Concerned institutions must work with transport companies to transfer their modes of transports gradually to rail […]
Seventh, Warehouse and drying machine is considered as the main factor for collecting milled rice in Cambodia: Therefore, we shall encourage more investment on drying machine and warehouse to increase rice collection for export. In this case, Royal Government of Cambodia has negotiated with Chinese partners on building a number of warehouses across the country in order to solve the inadequacy of warehouse and drying machine.
… It was not a simple matter when talking about managing rice supply. Process of collection of rice, for supply to outside or local markets, has similar problem. Sometimes, farmers soaked their rice to gain weight before weighing and selling it. This has often led to rice either growing or decay in stock. I have brought the issue with the Chinese friends and made clear that there is a demand for credit on issue of building warehouses in the country. China was the top country importing rice from Cambodia, followed by countries in Europe./.
In fact, the significant growth in agricultural sector provides majority Cambodian farmers with great benefits, as a result, the standard of living of farmer has been improved. In this spirit, the Royal government has made strong commitment to enhance rice production and address administrative bottlenecks, which would pose challenges to the export of Cambodian rice to foreign market. Indeed, the success in the implementation of policy measures has been strongly relying on daily administrative operation, which is required for close cooperation, good facilitation and strong commitment, particularly genius leadership and flexibility in the management of relevant ministries-institutions and all key active players.
In this context, the Royal government strongly believe that all relevant ministries-institutions, private sector, development partners, especially all Cambodian farmers nationwide will further make great contribution to fulfilling the mission to enable the Kingdom of Cambodia to enjoy sound development, good progress and prosperity.
Finally, I wish you all a good health, happiness and success in your respective careers and tasks in your family and success in your careers and tasks./.
