Thousands of organic rice farmers supported by Cedac, a local agricultural NGO, have decided to raise the price of their paddy if buyers delay payment by a month or more.
Keam Makarady, a program director at Cedac, said that representatives of 3,000 farmers from a collection of organic rice producing communities in seven provinces had decided in a meeting on Tuesday in Phnom Penh to raise the price of their product by 25 riel per kilogram for each month that a payment is delayed.
“Through this mechanism, [buyers] don’t need to borrow money from financial institutions to pay for organic rice paddy,” Mr. Makarady said, explaining that millers and other middlemen were typically only paid by overseas buyers after receiving the paddy and therefore had to take out loans to initially pay the farmers, who until now have been unwilling to receive delayed payments.
“ If [the farmers] want to get a higher price for their organic rice paddy or if they don’t need money urgently, it will be a benefit for them,” Mr. Makarady said, adding that the price increase was effective immediately.
Sith Chhan, a representative of nearly 100 rice producers in Kampot province’s Chumkiri district, said that the president of each organic rice farming community would be responsible for supporting their members while they awaited payment.
“During the period where payment has not yet been made, farmers will need to find other funds by themselves and if they cannot find them, the community will help them respond to such situations,” said Mr. Chhan, who attended Tuesday’s meeting.
He added that the organic farming communities in Takeo, Kompong Chhnang, Siem Reap, Prey Veng, Kompong Speu and Kompong Thom provinces would also join in the price increase.
Hun Lak, the CEO of rice exporter Mekong Oryza, said he doubted a small increase in price per kilogram would drive demand down given the small amount of organic rice being produced in Cambodia, which he estimated at about 5,000 tons per year.
“I think it would not have any negative impact on the demand because the amount of production is very small every year,”
said Mr. Lak, who is also a vice president of the Cambodia Rice Federation.
“Even though the price is raised a little bit, I think buyers still accept it. Even if there was double the amount of organic rice at the new price, [the buyers] would buy it all.”
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