Rice Milling Plant May Help Farmers Reach World Markets

A first-of-its-kind rice milling plant soon to open on Road 4 in Kandal province holds promise for Cambodia's farmers as a possible route to export markets.

The owners of the $6 million plant say their high-tech equipment can mill rice to international standards, an ability that has been absent from Cambodia's struggling rice industry.

If successful, the mill in Ang Snuol district could profoundly change the lives of at least a few thousand rice farmers, who currently have little choice but to sell poorly milled rice on the international market at low prices.

"We believe that at the end of this year and the beginning of next year, we can export rice," said Chieu Hieng, the vice chairman and CEO of Angkor Kasekam Roongroeung Co Ltd.

Using profits from the restaurant his family opened, Chieu Hieng and his relatives paid for more than half of the plant Some 13 shareholders, who the family said they could not identify, paid for the rest of the plant. 

The company has contracts with 80,000 people in Kompong Speu, Taken, Kampot and Kandal provinces to buy their wet season rice crops this year at a minimum price of 500 riel per kg, much higher than the going rate of 300 to 340 riel per kg.

The company plans to export 20,000 to 30,000 tons of white rice in its first year of operation, or enough to generate revenues of $10.5 million if the world market pays $400 to $420 per ton of rice, according to Chieu Hieng. More than half of the revenues would go to the farmers to pay them for their rice.

Farmers who have signed contracts with the plant agreed to grow only rice seeds provided by the company, a premium rice variety called Phka Mali.

The plant opening comes amid a government ban on exporting unmilled rice, a measure

meant to prevent a food shortage like those that occurred after last year's floods. Farmers complained that the ban was unfair since it forced them to mid the rice in Cambodian plants, where old machinery often breaks the rice kernels, lowering its value.

Still, Cambodian farmers exported some 200,000 tons of milled rice last year, according to Harry Nesbitt at the International Rice Research Institute.

Nesbitt said that the lack of a modern mill has been a serious constraint on Cambodian farmers' efforts to market their rice internationally.

Traditional mills exist in nearly every village in the country, but they produce rice with a lot of broken kernels and cannot whiten the rice sufficiently for international.  markets.

That's where a plant like that of Angkor Kasekam helps: The machinery, designed in Japan and built in Thailand, can produce white rice with very few broken kernels.

The company has held workshops and sent officials into the rice paddies to show thousand of farmers the proper techniques for growing healthy rice. Farmers also must refrain from using chemical fertilizers, because the company wants to market the rice as a more expensive, organically grown variety.

The centerpiece of the mill's complex machinery is a piece of equipment that uses four infrared cameras to examine each kernel of rice for whiteness and length.

Chieu Hieng's family milled rice for two generations before Cambodia's wars broke out in the 1970s. He then fled the country and milled rice in Thailand. He returned nine years ago to find the country in ruins and the rice business plundered.

Now Chieu Hieng said  he's happy to be doing the family business back on Cambodian soil. I am proud, "he said.

By Matt Mckinney