Project Update - South Sudan (JICA) and Cambodia (ADB)

South Sudan – JICA – Comprehensive Agriculture Management Plan Project – JIN Corporation

Bob Lindley in South Sudan

FoodWorks has recently successfully completed the so-called “third dispatch” for the CAMP project. We have been working on this project since August 2012 providing fisheries and livestock expertise (Robert Lindley, Jerry Turnbull and Justen Smith) to prepare a multi-sector management plan and related policies. 

The lead company was originally the International Development Centre of Japan (IDCJ) and then when the civil war forced a general retreat to Entebbe and security became a major concern the JIN Corporation took over.  

The project is on-going. We wait to see what the next steps might be for FoodWorks.

For more information contact: 

Robert Lindley 

rhlindley@foodworks.ag

Cambodia – Ministry of Economics and Finance (Asian Development Bank Loan) – Climate-resilient Rice Commercialization Support Programme - NIRAS (Denmark)

Rice paddy field in Cambodia

This $100 million program started in November 2014 and will continue for 6 years.  FoodWorks played a part in the original bid and with NIRAS and CamConsult and our consortium won against fierce competition. Unlike many loans, not only does the Ministry of Economics and Finance (MEF) administer the funds, but in this case manages the project directly. It does so through a Project Management Office under the auspices of the Supreme National Economic Council (SNEC) and implements the components via separate National and Provincial Implementing Offices. The geographic focus is the major rice growing areas of Battambang, Prey Veng and Kompong Thom. 

Funded by the ADB and other four other donors "Rice-SDP" aims to (a) undertake policy reform and (b) provide infrastructure along the rice industry value chain. 

FoodWorks has taken the lead on the policy program element but is also helping with public-private partnership (PPP) arrangements (Geoff Quartermaine Bastin and Pradeep Patnaik). For policy the challenge is to take responsibility for ensuring compliance with ADB loan conditions. This includes establishing a modern regulatory environment for the rice seed industry, developing a law for the use of agricultural land, and putting in place plant protection and sanitary/phyto-sanitary (SPS) arrangements.

Related to climate change, we have a requirement to draft a National Action Plan to Combat Land Degradation. This NAP is a requirement of the UN Convention to Combat Desertification to which Cambodia is a signatory. The country is held to be one of those most at risk from climate change given that 80% of rice cultivation depends on the annual floods arising from the Ton Le Sap water body.

For PPP and the general business development aspects of the rice sector, we have a number of sub-projects to bring to private investment. These include seed farms and drying and storage facilities. We are also assisting other experts with market studies for the value chain.

For more information contact:

Geoff Quartermaine Bastin 

gqb@foodworks.ag

CAMBODIA RICE - BUSINESS ADVISORY

We reported on this 9-month long project earlier in the year (see "White Gold"). It has been funded by the International Finance Corporation (IFC), Agence Francaise de Development (AFD) and the European Union (EU).

The work has now reached a successful close with a second workshop in Phnom Penh held at the Sofitel on 11th September 2014. Overall the research on international markets for Cambodian high quality rice (especially the Phka Malis jasmine rice) meshes with a number of initiatives being taken by the Government of Cambodia to develop and promote the Cambodian rice industry. An Asian Development Bank project will also start soon aimed at assisting with the further commercialization of the rice sector.

FoodWorks researchers Geoff Quartermaine Bastin and Eddie Vernon worked under the direction and excellent leadership of William Scott of Agland Investment Services Inc. covering the China and Singapore markets as well as providing a world market review. Michel Timsit of GEM of Paris covered France (in superb detail with a special consumer research element) and Germany while Bill Scott himself researched the USA and the Cote d'Ivoire. William Mott of Agland contributed extensively on branding strategy. These six countries were seen as being the most likely where Cambodia can increase its exports.

Here's a screen grab of an article published about the workshop that focuses on the results from the China market research; we also undertook market research in Singapore.

Full article at: China Rice Market

The workshop was well-attended, with over 100 people present during the day and 92 people staying for lunch. A significant portion of the audience (at least 80% or more) stayed for the entire event, which ended at approximately 5:15 in the afternoon.

The United States, France, and Germany were discussed in the early morning session. After coffee, China, Singapore, and Cote d’Ivoire were presented. All of the presentations were PowerPoint slides based on the graphs and tables found in the individual countries studies written by the consultants from the combined Agland Investment Services, FoodWorks and GEM team led by Mr. Scott.

William Scott Team Leader of the Agland Investment Services, FoodWorks and GEM business advisory team addressing the workshop.

In the afternoon, there was a session to discuss strategy issues confronting the newly formed Cambodian Rice Federation (CRF) and the rice sector in Cambodia.

Creating a quality image for Cambodian rice appeared to be a priority for everyone in the room. The reality is that in the marketplace, Cambodian jasmine rice of the same (or better) quality as Thai Hom Mali sells at a price lower than the Thai rice. There was general agreement that in the long-term, a market of certification, similar to that developed for Thai Hom Mali, needs to be created for Cambodian rice. In addition, the meeting suggested that Cambodian rice needed to improve its price competitiveness and to establish a reputation for reliable, sustainable and consistent supply.

Each company participating in the seminar received a flash drive that contained PDF versions of the country studies and the strategic synthesis report. Copies of the main reports may be obtained from the CRF. Mr. Lun Yeng, Secretary General of CRF, served as the moderator during the entire day. Mr. Sok Puthyvuth, President of the CRF, was one of the key opening speakers to the Workshop.

A word of thanks to Madelaine Nelson of Agland: without her unstinting work on the text of the reports this project would never have got finished. Thanks!

Also for more information contact William Scott on email: wscott@aglandinvest.com

 

"WHITE GOLD" - CAMBODIA RICE INDUSTRY

The FoodWorks team [1] has been undertaking in-depth market research aimed at increasing exports of Cambodian milled rice - "White Gold" - especially the unique variety of fragrant rice or Phka Malis in Khmer language.

The “Study of the International Markets for Cambodian Rice” is being undertaken in association with Agland Investments Service, Inc. It is jointly funded by the International Finance Corporation (a member of the World Bank Group) and the Agence Française de Développement (AFD). The principle stakeholder is the Federation of Cambodian Rice Exporters (FCRE), but all those involved in the Cambodian rice industry, including the Royal Government of Cambodia, are considered to be interested parties.

Cambodian rice includes some of the most traditional varieties found in South-east Asia and some claim that it is the origin of Thailand's famous jasmine rice (Th. Hom Mali). Cambodia has only been a serious (if small) exporter of milled rice since 2010 – a base volume of 48,202 tons rising to some 200,000 tons last year, but it has a very long history of irrigated rice culture and indeed the ancient civilization of Angkor Wat was founded on rice.

More recently Cambodia has recovered from decades of civil war and become a much loved tourist destination and an increasingly important source of food for the Greater Mekong Sub-region. There are more than 60 rice mills of various sizes up to 80 tons/day using modern equipment and eager to push exports to over 1 million tons annually.

Cambodian Premium Fragrant Rice was awarded the ‘World’s Best Rice’ Award for the

second straight year in a row at the global rice tasting competition during the World Rice Conference (WRC) organized by The Rice Trader (TRT) in Hong Kong, China from November 19-21, 2013.

The aim of the research work to date has been to identify the likely best markets for Cambodian rice, in particular, fragrant or jasmine rice. The focus is milled (processed rice) not padi or unmilled rice (a very large volume of which gets milled in neighboring countries). 

On the basis of preliminary analysis, a First Consultative Conference was held in Phnom Penh with the membership of the FCRE on 17th February 2014. At this meeting, the consulting team, led by Mr. William Scott of Agland Investments, Inc., presented the initial findings and analysis to more than 60 stakeholders. This conference was followed by a series of short meetings including the IFC team members and FCRE members – millers and exporters.[2] 

In later stages of the project the team will undertake detailed studies of the export markets in the USA, China and France, all identified as having considerable potential for Cambodia's rice. Three more countries (likely in Africa, Asia and the EU) will be added once the initial country results are in.

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[1] The FoodWorks team comprises Geoff Quartermaine Bastin, Dr. Shane Tarr PhD and Eddie Vernon.

[2] The presentation constituted a “draft” analytical snapshot of the industry and was presented in the form of a PowerPoint, which was then distributed as a .pdf document file to all FCRE members on 25^th February 2014.

Photo credit: www. southeastasiaweekly.com

CAMBODIA: CORN - PROSPECT FOR THE FUTURE

Cambodia holds a key position in the Greater Mekong Sub-region (GMS) and has the potential to be the food basket of South-east Asia.

Fed by the Mekong River and the site of the unique Ton Le Sap water body (visible in the satellite photo), the country has excellent soils and wide areas of flat, fertile lands. Access is overland to neighbouring Thailand and Vietnam and to the sea at Sihanoukville.

Cambodia grows rice, upland perennial crops such as coffee and rubber, oil palm and corn (maize). With a population of over 14 million recovery from the civil conflict of earlier years has been impressive and there is a stable government based on an Asian form of democracy and a constitutional monarchy.

Rated B+ in terms of official country risk and somewhat lower on the World Bank's Index of Doing Business than it should be, Cambodia has actually attracted large amounts of foreign direct investment.  Overall China is the largest investor but other investors from Taiwan, Korea and Malaysia have been prominent. Surprisingly this year the UK has led the investors.  FDI is welcome and with a tax rate of 20% and various tax holidays, Cambodia has set its heart on being the business destination in this part of the world.

In terms of agriculture, the Government has seen investors come and go. Political disagreements with Thailand have meant that the larger Thai agribusiness companies such as Charoen Phokphand have been wary of their investments; many of the other Asian investors have been property speculators who took Economic Land Concessions (ELCs), sat on them perhaps with minimal investment and then hoped to have turned a speculative profit as land prices have risen.  So not as much progress has been made as could have been.

The Government is sick of this circumstance. So there is every official encouragement for serious long term real investment based on large-scale farming with good management and technology.

In this case, with our partners we have developed a concept-level corn project.  Details may be downloaded at this link - CAMBODIAN CORN PROJECT

In brief, we are planning to develop a start-up ELC of 3,000 to 5,000 hectares for irrigated corn (maize) with a target three crops per year aimed at the animal feed market. The project can be scaled up to 20,000 hectares once success has been assured.  We envisage an initial capital investment of US$15 million (depending on needed infrastructure).

Corn prices are at their highest level for years (see analysis on our sister site Agrimarkets) but at average long-term prices (which we always use for analytical purposes) of half the current price, this project looks very attractive.  Demand for animal feed is growing sharply in Asia as economic growth increase middle-class incomes and as people eat more meat rather than rice.  China, Korea and other Asian countries import corn and the market is growing.

With our partners we intend to develop this project in the coming months, laying a base for similar developments throughout this region.  FoodWorks will operate as the development facilitator, putting the pieces of the investment puzzle together and ensuring that the projects, wherever they may be, are undertaken with due regard for local communities and environmental safeguards.

For more information please contact: gqb@foodworks.ag