The Ministry of Agriculture, Forestry and Fisheries (MAFF) is exploring mechanisms seeking to stabilize local rice producers’ sale prices in the event of temporary declines caused by market fluctuations.

In order to forward the proposed supportive financing program, MAFF has submitted a proposal for maintaining the value of rice and ensuring food security to the chairman of the Economic and Financial Policy Committee.

The action comes in response to a decline in rice prices in some provinces below KHR1000 per kilogram.

Ministry Secretary of State Yang Saing Koma said to local media on Feb. 27 that the ‘Joint Working Group on Agricultural Price Coordination’ had already met at the ministry under his chairmanship.

“The expert working group has been diligently monitoring and analyzing the trends in rice prices and production costs,” he said.

Along with current harvest statistics, the group also considered information on the ongoing operations of local mills and rice exports to Vietnam.

By doing so, the working group has evaluated yearlong production, including the end of the dry season and the beginning of the monsoon season.

“The aim of the working group is to be prepared to assist in stabilizing rice prices at a reasonable level and ensure that farmers receive a fair profit,” Yang explained.

On February 25, MAFF reported on some regional rice prices nationwide.

According to MAFF statistics, Banteay Meanchey producers are able to fetch prices of KHR990-1000 per kilogram for the OM rice variety, while the IR rice variety is sold for an average price of KHR1040 per kilogram.

In Kampong Cham, OM garners a price between KHR990-1050, and in Prey Veng the same variety is sold for KHR1030-1050.

In Battambang, generally rice sells for KHR980-1020 per kilogram.

Tbong Khmum rice farmers are experiencing prices ranging from KHR1000-1100 for general varieties, with the popular Sen Kra’op (SKO) fragrant variety able to sell for KHR1250-1300.

Kampong Thom rice prices sit at KHR990-1030 per kilogram, with SKO selling at KHR1220.

Yang said that while the value of rice for some producers has dipped slightly below KHR1000 per kilogram, it remains higher overall than in 2022.

In 2023, prices experienced a significant increase, driven by heightened demand in international markets amidst global food shortages, he said.

The Ministry Secretary of State also noted that the total rice harvest nationwide during February and March for the dry season this year may reach three million tonnes.

According to MAFF, dry season rice production significantly exceeded expectations. The predicted yield accounted for only 500,000 hectares of paddy, while the actual cultivation spanned almost 800,000 hectares.

However, the increased production has led to water shortages in some areas, the ministry noted.

On February 26, the Minister spokesperson of MAFF, Khim Finan, said that rice prices have fallen slightly in recent periods because various countries in the region harvested their rice at the same time as Cambodia.

“This increase in international market supply has led to a price drop. This is a seasonal trend that occurs annually,” he said.

When the harvest season begins, there is an abundance of rice on the market, and prices typically fall somewhat compared to the pre-harvest season.

“This is a normal cycle of demand and supply balance,” he explained.

In the case of “dramatic price fluctuations occurring due to temporary factors,” however, Finan said the ministry will have “intervention mechanisms” in place for producers suffering from the effects.

These include using a special financing package to stabilize the prices and aligning with the government’s fifth priority programme pertaining to the Kingdom’s agricultural sector, he said.

However, Finan explained that market forces are important to consider. Therefore, the price stabilizing process is a temporary one and is used only when necessary, as it is not a long-term solution.

Nonetheless, experts are monitoring developments in the sector closely and the MAFF will seek to maintain equilibrium and ensure fair profits for farmers, he said.