The Royal Government has recently implemented two specific and direct and indirect measures to assist farmers, particularly to stabilise the price of rice during the upcoming Chinese and Vietnamese New Year celebrations, a period when demand may decline.

The measures were introduced after the price of OM rice dropped to as low as 800 riel per kilogramme. The price of Khmer fragrant rice remains similar to last year, ranging from 1,200 to 1,300 riel.

During a January 20 inauguration ceremony for development achievements in the Bun Rany Senchey Damnak Trayeng village, in Pursat province’s Phnom Kravanh district, Prime Minister Hun Manet explained that direct measures were implemented from October to November 2024 and will be repeated from April and May 2025 with the government allocating $40 million to rice mills as working capital to purchase agricultural products from farmers.

Additionally, $30 million has been allocated from January to March, especially during the Chinese and Vietnamese New Year in January, when procurement may slow down.

“This can help address the issue. This is a form of intervention. While the required funds are larger, this measure will boost procurement to prevent harvested crops from going unsold,” said the prime minister.

He added that there is also a credit guarantee mechanism for rice exports, rising from $30 million to $150 million, which was agreed upon last week after discussions with the Rice Federation.

Rice mills require financial support from the Rural Development and Agricultural Development Bank (ARDB). The $150 million mechanism is for general agricultural products, with $40 million already utilised, and an additional $30 million allocated.

“We added $150 million. What is the purpose of this $150 million? It is to ensure that rice mills can access loans from private banks to use as working capital to purchase rice from farmers,” he said.

“If the $150 million guarantee is not provided, rice mills cannot obtain loans from private banks. This means the government guarantees the security of private banks, which will then release hundreds of millions more, in addition to the $40 million plus $30 million from the government, as working capital to purchase rice from farmers over the next few months, especially during this harvest season until the end of March,” he continued.

The prime minister clarified that the government will continue to implement measures to ensure the flow of agricultural product purchases, including rice from farmers.

In addition to rice mills, some philanthropists are also stepping in to purchase rice from farmers.

Manet urged private banks to provide loans to the agricultural sector at reasonable interest rates, especially during this period.

Beyond direct financial interventions, the government is also considering waiving land tax for agricultural land, unlike most countries that do not exempt such taxes. Furthermore, the government is contemplating waiving taxes on the import of agricultural equipment, fertiliser and animal feed.

The prime minister also encouraged the production of organic fertilisers to help farmers reduce their expenses on imported chemicals.

Kao Thach, director of the board of directors of the Agricultural and Rural Development Bank (ARDB) could not be reached for comment on the credit guarantee. However, last week, he noted that since 2010, the government has allocated a total of $208 million to support the agricultural sector and stabilise rice prices.

The prime minister encouraged farmers to form modern farming communities to secure stable rice prices and reduce production costs.

Minister of Agriculture, Forestry and Fisheries Dith Tina, along with other senior officials, met with over 200 rice farmers on January 19 in Pursat’s Talor Senchey District, to promote modern farming communities.

The minister highlighted the importance of agricultural cooperatives in supporting farmers nationwide. Such cooperatives have clear production plans, knowledge of supply and demand, production contracts, access to low-interest loans, technical support from the ministry and reliable markets.

He encouraged farmers to reduce their reliance on imported rice varieties and instead cultivate local varieties like Sen Kro Ob, Phka Romduol and Champei Sar 70 (CPS 70), which are in demand by domestic rice mills and fetch higher prices in the market.

“Modern farming communities greatly benefit farmers by reducing production costs. They also receive guidance on the use of agricultural inputs, while learning about appropriate water usage for production areas and how to minimise risks from climate change,” he said.

Tina also reminded farmers of the upcoming Chinese and Vietnamese New Year, which may temporarily halt rice procurement by Vietnamese traders. Nevertheless, he reassured them that through the ministry, the government has collaborated with the private sector, including rice mills, to intervene and ensure farmers can sell their rice and receive timely support.

Prime Minister Hun Manet inspects agricultural crops in Pursat province’s Phnom Kravanh district on January 20. STPM