A day after a state bank called on Cambodians to buy domestically milled rice to help a government scheme to stabilise prices in the sector, multiple ruling party officials were reaching into their own pockets to do just that.
The Rural Development Bank – tasked with distributing $27 million in emergency grants to millers so they can raise their price for paddy rice – yesterday featured a list of officials and businessmen on its Facebook page who had heeded their call on Monday to buy local product.
Noting some of the buyers were members of Cambodian People’s Party working groups, the post said the group had bought more than 100 tonnes from Battambang miller FedRice.
Among those featured were Minister of Justice Ang Vong Vathana, Justice Ministry secretary of state Koeut Rith and Mao Havanal, a secretary of state at the Secretariat of Civil Aviation of Cambodia.
RDB general director Kao Thach said that the bank’s campaign was a way to help farmers sell their product amid a global downturn in prices. “It is not political, but for Khmers to help Khmers,” he added.
Yesterday, Prime Minister Hun Sen took to Facebook to applaud the group and urge more Cambodians to follow their lead.
Officials from all levels of government are assigned to CPP working groups, which, existing down to commune and village level, deliver infrastructure projects and donations on behalf of the party.
The system has been criticised for blurring the lines between the state and the ruling party. Reached yesterday, Rith, who is among the youngest members of the CPP’s central committee, also was quick to dismiss a political motive behind the rush by officials to help out.
“Farmers want to sell their paddy rice at a better price, anyone can help with this . . . Don’t talk about political tendencies,” he said, explaining his family had ordered 10 tonnes which would be delivered in two or three stages.
Undersecretary of Finance Ros Seilava, among those to order from the Battambang firm, echoed Rith’s remarks. “I do not think it is about political affiliation,” he said. “The government intends to solve the problem.”
The government’s loan package aims to stabilise the price of paddy rice, which has fallen precipitously from $240 per tonne to $192 per tonne over the past month, leading to protests by rice farmers over the weekend in Battambang.
Millers will be offered loans at 8 percent annual interest on the condition they purchase rice paddy from farmers for no less than $218 per tonne – a price that ensures farmers make a profit on their crop.
Reached yesterday, FedRice stock controller Chi Vaon said the company was selling their product at between $530 and $540 per tonne, which included transportation to Phnom Penh.
Vaon welcomed the demand in the wake of the bank’s call, but called for more government measures to improve exports.
Political analyst Ou Virak yesterday said that the mobilisation of the CPP’s patronage network to “rescue” farmers might bring short-term relief for some, but did nothing to address the need for long-term reforms.
“The problem with the patronage system [is that it] kind of works in a way, but it’s limited to crisis response,” Virak said.
“It’s also part of the reason why there’s no systematic or institutional way of dealing with or preventing these crises.”
Meanwhile, Miguel Chanco, lead ASEAN analyst for the Economist Intelligence Unit, said he wasn’t surprised to hear of CPP working groups moving in to help create demand, particularly with commune elections approaching.
“I think short term, there’s no question it is going to provide some relief to rice prices, but at the end of the day, Cambodia is still very much out-priced in the global rice market, which is at the moment oversupplied,” he said.
“So regardless of what the government does in the short term, international price trends will still remain very weak going forward.”
Additional reporting by Shaun Turton