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- February 13, 2025 , 7:15 PM
PHNOM PENH – The government has allocated $220 million to help buy rice from farmers and ensure exports as prices fall and growers face financial losses.
Prime Minister Hun Manet announced the assistance on January 20. He said $70 million of the money is for rice procurement.
The rest for an export guarantee loan project. “It is to ensure that rice mill owners can borrow money from private banks to use as working capital, bringing in hundreds of millions of dollars more to buy rice from farmers,” Hun Manet said at an inauguration ceremony in at Bunrany Senchey village in Pursat province.
“This is the solution. If there is no $150 million to guarantee the rice mill owners, they cannot borrow money from banks.”
The aid comes as farmers face plummeting rice prices. They primarily grow and sell foreign varieties, such as OM and ER, which are mainly exported to Vietnam and have experienced sharp price drops set by traders.
The declining prices led farmers to protest and block roads demanding a solution in Battambang province last week.
The Prime Minister said the capital allocation plan is to ensure that farmers can sell their rice immediately after harvest.
Between the October/November 2024 and April/May 2025 periods, the government plans to allocate $40 million to rice mills as working capital to buy rice from farmers.
Hun Manet also told the Ministry of Economy to prepare to release an additional $30 million to mill owners between the January to March harvest season so that they can buy rice from farmers, especially during the Chinese-Vietnamese New Year season when traders from neighboring countries take a break.
The government has decided also to raise the loan guarantee for rice exports from $30 million to $150 million. This aims to enhance the capacity of rice mills to obtain loans from private banks and foster the purchase of rice for milling into rice for export.
Hun Manet acknowledged that these budget packages are tiny compared to needs but he said the state and institutions were working to help guarantee the price and export of rice and expand the scope to cover other crops.