Amru Rice, Cambodia’s largest producer and exporter of the grain, is working with its farmers to diversify beyond the country’s largest agriculture product and grow other foodstuffs, including black pepper, cassava and cashews.
Chief Executive Officer Song Saran told an international trade organisation that he is working with farmers to increase their skills so their financial stability is not tied to fluctuating rice prices.
“If another crisis comes in the next 4 to 5 years I think we will be more prepared, because I believe in my supply chain. At the moment we are not yet at our peak. For example, other countries can produce 3 to 4 tonnes of rice per hectare, but we can only do 2 or 2.5 tonnes per hectare,” Saran told Enhanced integrated Framework (IEF).
IEF provides trade assistance to least-developed countries by fostering an understanding of global trade frameworks.
Amru Rice has more than 10,000 contract farmers who exported more than 322,000 tonnes of milled rice to 30 countries between 2013 and 2019.
The same year, Italy argued that tariffs should be imposed on Cambodian white rice imports to the EU. At the time, shipments to the EU accounted for 32 percent of the Kingdom’s rice exports.
As a result, the price for the grain fell drastically. Some farmers said they were earning $60 less per tonne for the crop, which is engrained in the culture of Cambodia.
The public and private sectors soon set to work to scout new markets to export their goods and their efforts were rewarded with commodity prices beginning to rise before the pandemic.
But as Coronavirus continues to shred through the global economy, the rice sector has taken another step back. Many local restaurants are closed and international buyers are in short supply.
“For me, it’s grappling with how I can promote and sell more rice. The big disruption for me at the moment is freight. Shipping lines have increased their prices. The cost for a container has gone up three or four times and this has a big impact on income,” said Saran, who is also the president of the Cambodia Rice Federation.
Now, Amru Rice is hard at work to prevent similar negative effects on the industry. The firm is working closely with the Ministry of Agriculture and cooperative farmers to grow organic rice, which fetches a higher price in the open market.
Organic rice now accounts for 50 percent of the firm’s business as the number of provinces promising to exclusively grow chemical-free products continues to grow.
Cambodian rice farmers have been encouraged to diversify their crops for years and grow higher-value, drought-resistant and in-demand products such as lentils and beans instead.
Earlier this year, the Indian embassy in Phnom Penh signed a memorandum of understanding with the Cambodia Pepper and Spice Federation for duty-free exports of black pepper and turmeric.