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Über dieses Buch

This open access book is about understanding the processes involved in the transformation of smallholder rice farming in the Lower Mekong Basin from a low-yielding subsistence activity to one producing the surpluses needed for national self-sufficiency and a high-value export industry. For centuries, farmers in the Basin have regarded rice as “white gold”, reflecting its centrality to their food security and well-being. In the past four decades, rice has also become a commercial crop of great importance to Mekong farmers, augmenting but not replacing its role in securing their subsistence. This book is based on collaborative research to (a) compare the current situation and trajectories of rice farmers within and between different regions of the Lower Mekong, (b) explore the value chains linking rice farmers with new technologies and input and output markets within and across national borders, and (c) understand the changing role of government policies in facilitating the on-going evolution of commercial rice farming. An introductory section places the research in geographical and historical context. Four major sections deal in turn with studies of rice farming, value chains, and policies in Northeast Thailand, Central Laos, Southeastern Cambodia, and the Mekong Delta. The final section examines the implications for rice policy in the region as a whole.

Inhaltsverzeichnis

Frontmatter

Introduction

Frontmatter

Open Access

Chapter 1. The Evolution of Rice Farming in the Lower Mekong Basin

Abstract
In the 1970s, small-scale, labour-intensive, low-yield, semi-subsistence rice farming predominated in the Lower Mekong Basin. Rural poverty and the threat of famine were rife. In the 40 years since, rice farming in the Basin has undergone a dramatic transformation. This can be characterised as “commercialisation”, meaning the opening up of semi-subsistence rice farming to domestic and international input and output markets and the corresponding adaptation of farmers to the associated opportunities and risks. This book is about understanding the processes involved in this transformation and the commercial opportunities and challenges of rice-based farming systems in the Lower Mekong in the 2010s, with a view to outlining prospects for the 2020s. The motivation for the research was to: (a) compare the current situation and trajectories of rice farmers within and between different regions of the Lower Mekong, (b) explore the value chains linking rice farmers with input and output markets within and across national borders, and (c) understand the changing role of government policies in facilitating the on-going evolution of commercial rice farming. This chapter sets the scene for the country studies that follow.
Rob Cramb

A Fragrant Aroma

Frontmatter

Open Access

Chapter 2. Commercialisation of Rice Farming in Northeast Thailand

Abstract
Rice has been central to the culture, economy, and politics of Thailand for more than a millennium, reflecting both the suitability of the natural environment for rice production and the historical origins of Thai agriculture in the migrations of rice-growing populations from southern China. Despite the growth of other agricultural industries since the 1960s and a decline in rice consumption per capita as incomes have grown, rice remains the dominant agricultural industry. For most of the post-war period Thailand has been the world’s largest exporter of rice, until being overtaken by India in 2017. Thai rice is renowned for its quality, including white rice and Thai fragrant or jasmine rice. Whereas the Central Region remains the largest producer of rice for the domestic and export markets, this chapter focuses on the Northeast Region, which lies within the Lower Mekong Basin. It is the high profitability of jasmine rice and the productivity of a related glutinous variety (RD6) that has permitted widespread commercialisation in the Northeast since the 1980s, lifting many rural households out of poverty. We analyse the broad trends in the commercialisation of rice farming in the Northeast in the context of the country as a whole, considering production, marketing, and policy dimensions.
Pornsiri Suebpongsang, Benchaphun Ekasingh, Rob Cramb

Open Access

Chapter 3. Evolution of Rice Farming in Ubon Ratchathani Province

Abstract
Rice farming in Northeast Thailand has changed significantly in the past few decades, becoming more commercialised and mechanised. This has involved increased use of high-yielding seed, inorganic fertilisers, and machinery, especially for land preparation and harvesting, and lower use of family labour as household workers find more profitable non-farm employment, often outside the district and province. Three contrasting villages in Ubon Ratchathani Province were selected for this study to investigate the use of rice farming technologies, especially fertiliser and machinery, to estimate the returns to the farm household from rice production, and to identify the problems and potential of different approaches to the development of rice farming in the region. Comparing the three villages shows that, even after several decades of commercialisation in the Northeast, rice farming is following different trajectories and making different contributions to household livelihoods, depending on the goals and circumstances of individual households and communities. Alternative agriculture based on organic production methods can be a viable pathway alongside conventional commercial agriculture. However, in all cases, non-rice and non-farm sources of income are needed to augment income from rice production.
Prathanthip Kramol, Benchaphun Ekasingh

Open Access

Chapter 4. Farmer Organizations in Ubon Ratchathani Province

Abstract
Notwithstanding the rapid growth of commercial agriculture in Thailand over the past half century, farmer organizations and community enterprises have been a common and distinctive feature of the rural economy and have been strongly supported by government policies, especially with the promotion of the “sufficiency economy”. While informal cooperation has been a traditional part of village life, the government has consistently promoted more formal organizational arrangements for farmers, alongside policies for intensification and commercialization of rice and other crops. This juxtaposition of independent smallholder farming and collective, community-based economic activity is explored in this chapter through case studies of organizations in three villages in Northeast Thailand. It was found that farmer organizations can facilitate the sharing of knowledge and skills, improve access to production technologies, encourage saving and investment, and increase farmers’ market competitiveness. Community enterprises can create new employment opportunities, especially for women and disadvantaged groups, contributing to livelihood diversification while reducing the need for out-migration. The key factors contributing to the success of these groups were strong committed leadership, involved membership, connecting with wider networks, the role of government and non-government assistance providers, and supportive government policies.
Prathanthip Kramol, Pornsiri Suebpongsang, Benchaphun Ekasingh

A Sticky Situation

Frontmatter

Open Access

Chapter 5. From Subsistence to Commercial Rice Production in Laos

Abstract
Rice farming in Laos is the least commercialised within the Lower Mekong. Moreover, Laos has suffered the most from variability in production due to the high incidence of droughts and floods. Nevertheless, as in the region as a whole, there has been a remarkable transformation of rice-based farming systems and supply chains over recent decades. These farming systems have been undergoing a transition from subsistence-based to market-oriented production. Rice production is dominated by the rainfed lowland system and is still predominantly for subsistence production of glutinous rice, with only a small proportion marketed and even less exported. However, the cultivated area and especially the yield of both rainfed and irrigated rice have been increasing, contributing to the achievement of rice self-sufficiency at the national level. Moreover, rural livelihoods have become increasingly diversified as the economy of the region develops and opportunities for off-farm and non-farm employment increase.
Vongpaphane Manivong, Rob Cramb

Open Access

Chapter 6. Adapting the Green Revolution for Laos

Abstract
Initial efforts to introduce Green Revolution practices met obstacles in Laos due to the Vietnam War, early attempt to collectivise agricultural production, and limited investment in agricultural research. Faced with ongoing food shortages, the government embraced agricultural modernisation but lacked the resources to implement it. From 1990 to 2007, the International Rice Research Institute (IRRI) and the Government of Laos built the nation’s capacity in rice research and developed improved varieties suitable to Lao farming conditions. The program has been credited with bringing the Green Revolution to Laos, supporting increases in rice production to levels of national self-sufficiency, and building national research capacity. This chapter traces the history and processes that have seen the development, use, and spread of improved rice varieties throughout Laos, particularly in the lowlands of the Central and Southern Regions. This history represents a departure from the Green Revolution narratives of other Southeast Asian countries, where the development and use of improved varieties was predicated on access to irrigation and fertiliser and favoured yield over other qualities like taste or aroma. Instead, efforts to improve rice production in Laos emphasised plant breeding based on local conditions and preferences—low input, rainfed production of sticky rice—and built the capacity of Lao institutions and researchers to continue rice breeding after formal project efforts ceased.
Liana Williams, Rob Cramb

Open Access

Chapter 7. Rainfed and Irrigated Rice Farming on the Savannakhet Plain

Abstract
The aim of this survey was to characterise rice production in the Savannakhet Plain, which has long been a major rice bowl for Laos. Though situated in this generally favourable environment for rice, the survey villages encompassed a variety of agroecosystems. Upper paddies with sandy soils were drought-prone and without irrigation, hence could only support wet-season rice with lower yields. Lower paddies were more fertile and often had access to pump irrigation from rivers, canals, or ponds; hence, they could often support wet- and dry-season rice crops with somewhat higher yields. Lower paddies along the floodplain of the Champhone River also had fertile soils but were frequently flooded in the wet season; hence, only dry-season rice could be cultivated. The villages had different combinations of these agroecosystems, affecting their surplus-producing potential. The survey shows that, even with low yields and low returns, rice production in the Savannakhet Plain can generate a sizeable surplus for marketing within Laos and internationally. However, farmers are going to remain poor unless they can achieve higher yields and obtain higher and more stable prices. Low incomes will increase the incentives for younger household members to migrate to Vientiane or to Thailand for employment, adding to the shortage of farm labour. Nevertheless, given its comparative advantage in rice production, the Savannakhet Plain is a good focal area for increased investment in research, extension, input supply, mechanisation, and infrastructure to boost productivity and farm incomes.
Silinthone Sacklokham, Lytoua Chialue, Fue Yang

Open Access

Chapter 8. The Supply of Inputs to Rice Farmers in Savannakhet

Abstract
The policy of rice intensification in Laos is dependent on an adequate supply of key inputs such as high-yielding seeds, good-quality fertilizers, reliable irrigation, affordable finance, and appropriate information. This study focused on two crucial inputs—seeds and fertilizers. Six villages in Champhone District, Savannakhet Province, were selected for the study. Farmers had mostly adopted the seed-fertilizer technology. Mechanization of land preparation through the use of hand tractors was also widespread. Many also used irrigation to cultivate a dry-season crop. However, the productivity and profitability of rice farming remained low. Constraints to the supply of seeds and fertilizers explain part of this dilemma. There is scope for policy intervention to improve the supply and use of productive inputs for more intensive rice production. Further investment in the rice breeding and seed production centres may be needed to develop suitable varieties for the range of rice environments encountered by farmers and to improve the quality of seeds supplied. Intervening to control or subsidize the price of fertilizer is unlikely to be effective. The government could, however, simplify the import process, helping reduce farmers’ costs; increase the capacity to monitor and enforce fertilizer quality standards; and provide more site- and variety-specific information to farmers regarding optimal fertilizer use.
Chitpasong Kousonsavath, Silinthone Sacklokham

Open Access

Chapter 9. Rice Marketing and Cross-Border Trade in Savannakhet

Abstract
This study analysed the pattern of rice marketing and cross-border trade in Savannakhet Province. This province has the largest output of rice in Laos and is an important conduit for trade with Thailand and Vietnam. The survey interviewed actors along the rice value chain, including producers in Champhone District, traders, millers, exporters, and officials. Most rice farmers were market-oriented, regularly producing a surplus for the market. They used improved varieties and fertilizers and sold a substantial part of both their wet- and dry-season crops. Champhone District had already been opened to the regional market and reasonably efficient trading networks were in place. However, there were several constraints to the marketing and export of rice. Farmers often delivered rice of mixed grades and high moisture content. The rice mills in Savannakhet had poor processing equipment, making it difficult to meet international quality standards. The export ban in 2010–2011 caused a sudden drop in prices and created market uncertainty. These constraints could be alleviated through government policies to promote suitable varieties to ensure a homogeneous rice grade for export; enhance storage and drying to improve the rice moisture content; improve the processing infrastructure for sorting, milling, and polishing; and creating a more stable policy environment for the export sector.
Phengkhouane Manivong, Silinthone Sacklokham

Open Access

Chapter 10. Economic Constraints to the Intensification of Rainfed Lowland Rice in Laos

Abstract
Despite the widespread adoption of mechanised land preparation, improved varieties, and low levels of inorganic fertilisers, rainfed lowland rice production in Laos remains an economically marginal activity, with limited incentives for farmers to intensify production beyond household needs. This is a challenge for the government, which promotes rice intensification by setting high official yield targets. We analyse farmers’ decisions regarding the intensification of rainfed lowland rice systems in two lowland provinces—Savannakhet and Champasak. We demonstrate that farmers have selectively adopted a range of new technologies and continue to respond to changing incentives. However, this has largely involved the adoption of Low-Input, more labour-efficient, and more stable production systems rather than commercially oriented, High-Input, high-yield systems. We use activity budgeting and sensitivity analysis to explore the economic performance of several input scenarios, ranging from farmers’ practice to input levels required to achieve government policy targets. The budget models show that, given their resource endowments and the high degree of production and market risk they encounter, households in the rainfed lowlands have been rational in adopting a Low-Input system rather than intensifying rice production to achieve government yield and production targets. We argue that the strategy of diversifying livelihoods while maintaining a largely subsistence-oriented rice production system is likely to persist, given current economic trends.
Jonathan Newby, Vongpaphane Manivong, Rob Cramb

In Pursuit of White Gold

Frontmatter

Open Access

Chapter 11. The Commercialisation of Rice Farming in Cambodia

Abstract
In this and the next five chapters the focus is on the commercialisation of rice farming in the Central Plain of Cambodia. Particularly since 2010, rice has come to be seen as more than merely a subsistence crop or a staple for domestic consumption but as “white gold”—a commodity with major commercial, including export potential. This chapter sets the scene for the in-depth studies on the commercialisation of rice farming in Cambodia by describing the rice-growing environment in Cambodia as a whole, outlining the history of rice production in Cambodia, examining the role of the rice sector in the rapid agricultural and economic growth in Cambodia since 1993, highlighting the changes at the farm level that have underpinned this agricultural growth, and providing a profile of Takeo Province within this larger context. Cambodia has a long history and comparative advantage in rice production. With relative political stability and access to improved varieties and other inputs, farmers have been able to increase the area cultivated and especially per-hectare yields so that total production has grown at over 5% since 1990. From being a rice-deficit country in the 1980s, the country has achieved self-sufficiency and, since 2010, become a serious exporter of paddy and milled rice. Rice farmers in Takeo Province have long made an important contribution to Cambodia’s rice production and currently contribute 8% of wet season output and 19% of dry season output, as well as a major share of exports.
Rob Cramb, Chea Sareth, Theng Vuthy

Open Access

Chapter 12. The Production, Marketing, and Export of Rice in Takeo

Abstract
Takeo is one of the main rice-producing provinces in Cambodia and increasingly engages in cross-border trade with Vietnam. The aim of this study was to examine the production and marketing of rice in Takeo Province with a view to identifying ways to increase the benefits accruing to rice growers. Rice production in Takeo provides a subsistence base for farm households, an adequate return to household labour and, for those who have access to irrigation in the dry season, an important commercial activity. The returns to farmers could be improved by providing better information about and regulation of the key inputs—seeds, fertilisers, and pesticides. The rice market in Takeo is well structured with a network of collectors, traders, and exporters. Farmers can readily sell their paddy at a competitive market price. The marketed surplus is traded and milled efficiently in the domestic market, but the milling sector does not have the physical capacity or capital to handle the dry-season paddy surplus, which is exported directly to Vietnam. Thus the export of paddy remains crucial for the commercial rice industry in Takeo. If Vietnam’s rice policy changed to protect its own farmers, the rice sector in Takeo would be vulnerable. Nevertheless, while Cambodia continues to develop its rice processing and export capacity, the cross-border trade in paddy provides a viable source of income for a sub-sector of rice farmers in Takeo.
Chhim Chhun, Theng Vuthy, Nou Keosothea

Open Access

Chapter 13. The Role of Irrigation in the Commercialisation of Rice Farming in Southern Cambodia

Abstract
This chapter explores constraints to rice-based farming systems in the rainfed lowlands of Cambodia and the role of different sources of irrigation in alleviating some of those constraints. The research was carried out in lowland districts in Takeo and Kampong Speu Provinces, representing a major lowland rice-growing region with high population density, small farm sizes, and severe production constraints. Three villages were selected with similar biophysical and socioeconomic environments but different degrees of access to irrigation. The comparison shows that on-farm and (where feasible) canal irrigation can greatly increase the intensity, diversity, and profitability of land use, without being seriously constrained by available family labour. However, the potential for irrigated cropping has not been fully realised due to scattering of plots, restricted investment in tube wells, and underinvestment in maintaining canals. Nevertheless, even these partially irrigated systems not only increased land and labour utilisation but improved soil properties, reduced the risk of a household rice-deficit, increased the production of a marketable surplus of rice, and increased the level and diversity of crop income. The resultant cash flow provided the necessary working capital to keep the cropping system turning over with minimal need for credit, while providing income for household needs. While outmigration from southern Cambodia will undoubtedly continue, the case studies show that the development of more intensive, diverse, and market-oriented farming systems based on on-farm irrigation can provide a promising alternative pathway for many rural households.
Chea Sareth, Rob Cramb, Shu Fukai

Open Access

Chapter 14. The Supply of Fertiliser for Rice Farming in Takeo

Abstract
One reason for the low rice yields in Cambodia compared with Vietnam and Thailand has been the low use of fertilisers, even though there is a high yield response to fertiliser application. A study of the fertiliser value chain in Takeo Province was conducted. The hypothesis was that limited access to good-quality, affordable fertilisers is a major constraint to improving rice yields in the province. The study confirmed the hypothesis and concluded that farmers’ access to affordable, good-quality fertilisers could be improved by addressing the following concerns. The Ministry of Agriculture, Forestry and Fisheries (MAFF) could simplify and speed up the import licensing procedures and regulations for fertilisers, thus removing the scope for rent-seeking behaviour and the need for facilitators to expedite the issuing of licences. This would also reduce the incentive for illegal imports. Import licences should be approved by MAFF based on the suitability of a product’s use in Cambodia; then importers could be allowed to import any quantity of a registered fertiliser based on market demand and their own commercial risk assessment. This would also reduce the scope for illegal (and hence unregulated) imports. All imported fertiliser products should be labelled to identify the manufacturer. This would enable the sources of sub-standard fertilisers to be traced, particularly from Vietnam and China, where it is claimed that sub-standard blends and granular products are produced. MAFF should also certify third party traders who purchase and deliver fertilisers to villages for re-sale to farmers. Finally, fertiliser dealers, retailers, and other fertiliser traders should buy fertilisers only from certified importers or distributors and transport to villages for direct re-sale to farmers. Inspectors should monitor and spot-check fertiliser operators to help reduce fertiliser quality problems for smallholders.
Theng Vuthy

Open Access

Chapter 15. The Use of Credit by Rice Farmers in Takeo

Abstract
This study examined the credit access of different types of farmers and the impact of credit on farmers’ production and livelihoods to identify options for improving credit access and promoting successful credit utilisation. Qualitative research was undertaken in Takeo Province, where microfinance institutions (MFIs) have proliferated. The villages studied represented three types of rice-farming system. The challenges facing rice farmers included high and increasing input costs, the low quality of fertilisers, and the rising cost of mechanisation due to the price of fuel. While these trends increased the demand for credit, the squeeze on farm profits was reducing the viability of agricultural loans. Lack of formal land title to use as collateral was also a barrier to credit for many farmers. The need to ensure high repayment rates by carefully assessing potential clients meant that MFIs screened out poor farmers with little collateral and high vulnerability. Poor farmers often resorted to loans from informal sources when subject to livelihood shocks, despite the high risk of falling further into indebtedness. A challenge facing all farmers was the high interest rates for formal credit. MFIs were charging 30% p.a. to maintain financial sustainability. However, MFIs have reduced interest rates over time due to increasing competition and local saving. Rural development NGOs could better integrate training in farm and business skills in their credit programmes. Greater private sector involvement in the rice sector through contract farming may also help finance smallholder development. Provided the vulnerability of poor farmers is addressed, expansion of commercial credit will have a largely positive impact on rural livelihoods.
Kem Sothorn

Open Access

Chapter 16. Contract Farming of High-Quality Rice in Kampong Speu

Abstract
Contract farming is seen as one of the policies to overcome current impediments to commercialisation in the Cambodian rice sector. The Angkor Kasekam Roongroeung Co. Ltd. (AKR) was the first agribusiness firm to implement contract farming of rice and currently claims to have over 50,000 contracted farmers in four provinces. The approach was later adopted by other development organisations. Little is known about rice contract farming in Cambodia in terms of its contractual arrangements, inclusiveness, benefits, and challenges. This study examined the inclusion of smallholder farmers and the nature of contractual arrangements, the benefits of contract farming for farmers, and the challenges faced by farmers and agribusiness firms. AKR was selected as a case study because the company operates the largest scale of rice contract farming in Cambodia. The study found that the rice contract farming scheme of AKR was inclusive of poor farmers with small farms, even those with less than one hectare. With access to the benefits of the scheme, contract farmers were able to increase their returns from rice farming. However, some flaws in the contractual arrangements and the requirement to deliver high-quality rice for the export market posed a number of challenges to both AKR and the participating farmers, some of which could be addressed through policy interventions. Overcoming these challenges will enhance the benefits of contract farming for both farmers and agribusiness firms and thus contribute to further commercialisation of the rice sector and rural poverty reduction.
Nou Keosothea, Heng Molyaneth

The Overflowing Rice Bowl

Frontmatter

Open Access

Chapter 17. Trends in Rice-Based Farming Systems in the Mekong Delta

Abstract
Rice-based farming systems in the Mekong Delta have been transformed over the last four decades. Needing to boost rice production after 1975, the government increased investment in water control and irrigation and promoted intensification of rice farming through green revolution technology, leading to widespread adoption of double- and triple-cropping systems. As a result, the area of rice increased from 2.0 million ha in the late 1970s to 4.3 million ha in 2016. The yield of the wet-season crop increased from 2 t/ha in 1975 to 5.3 t/ha in 2016. Total paddy production increased from 4 million t in 1975 to 24.2 million t in 2016, the increase attributable equally to the increase in area and the increase in yields. From being a net importer of rice in the 1970s and 1980s, Vietnam exported 4.5 million t worth USD 2 billion in 2016, 90% of which was produced in the Delta. However, the focus on rice intensification has shifted since 2000 as the impacts on farmer livelihoods and the environment have become apparent. Locking farmers into producing low-quality rice for export has not provided adequate returns, especially as demand has shifted in favour of higher-quality rice and more diverse diets. Intensive use of fertilisers and pesticides has led to soil and water pollution and reduction in wild food supply. Moreover, the “total management” of hydrology in the Delta has had major impacts on water flows, sedimentation processes, aquatic species, and land-use options. In response, the government has progressively relaxed its restrictions on the use of paddy lands and rice-based farming systems have become more diversified, with the increased use of paddy lands for non-rice field crops, orchards, and freshwater and brackish-water aquaculture. The current policy promotes high-quality rice, reduced rice area, further diversification of farming systems, and promotion of agro-ecological and organic agriculture.
Nguyen Van Kien, Nguyen Hoang Han, Rob Cramb

Open Access

Chapter 18. The Domestic Rice Value Chain in the Mekong Delta

Abstract
The rice value chain in the Mekong Delta is a large and complex system, linking 1.5 million small-scale rice farmers to large numbers of traders, processors, wholesalers, retailers, and exporters. About 30% of production enters the domestic market and 70% is exported, accounting for over 90% of national exports. Input suppliers are widely dispersed, providing seeds, fertilizers, and other inputs competitively to farmers. Agricultural extension is provided by both public and private sectors through farmer groups. There has been rapid mechanization with two-wheeled tractors and combined harvesters, the latter mainly provided through contract services. However, there is limited availability of driers at the farm or commune level, meaning that most farmers sell wet paddy at a discount to be dried at the mills. Almost all the rice crop is sold to local traders—small, independent operators who transport paddy by boat to the rice mills. Most paddy goes through small mills that produce white rice, some of which are sold directly to domestic wholesalers but most of which go to exporters for polishing and bagging. Wholesalers are medium-sized enterprises, buying from polishing factories, traders, and directly from millers. Most of their sales are to traditional retailers who are spread widely across the region, operating small stores. The rice is sold loose and packaged after purchase. Modern retailers selling pre-packaged and labeled rice at higher prices have a small share of the domestic market. None of the actors in the domestic value chain appears to gain an excessive margin, with returns on working capital around 7–10%. Credit to enable producers, service providers, and processors to invest in improved technology may improve the efficiency of the value chain. The government should implement a policy to promote the quality of rice through contract farming between cooperatives and private enterprises based on quality standards. The export market should be opened up to private enterprises that obtain export contracts based on quality.
Dao The Anh, Thai Van Tinh, Nguyen Ngoc Vang

Open Access

Chapter 19. The Cross-Border Trade in Rice from Cambodia to Vietnam

Abstract
The cross-border trade in paddy from Cambodia to Vietnam, especially between Takeo and An Giang Provinces, has increased substantially in volume, reaching an estimated 1000 t per day in the peak season of November–December. The growth of this trade is because (1) the quality of the wet-season crop in Takeo meets domestic demand in Vietnam; (2) some An Giang farmers rent land for cultivation in Cambodia and transport paddy into Vietnam for the domestic market; (3) the harvest in Takeo is later than in An Giang, helping maintain the throughput of the rice mills in An Giang; (4) Cambodian paddy is cheaper than Vietnamese paddy of the same type; (5) Cambodia does not have sufficient capacity for processing and storage. The cross-border value chain has three channels: (1) from producers directly to Vietnamese traders (5%); (2) from producers to Cambodian traders, who sell to Vietnamese traders (55%); and (3) from producers to Cambodian traders who sell to Vietnamese paddy wholesalers along the border (40%). Processed rice is distributed to wholesalers in the cities or directly to numerous traditional retailers. While there is no formal labelling or certification, the Cambodian rice is identifiable to consumers who pay 50–100% more for traditional Cambodian rice. The volume of paddy from Cambodia increases the supply of specialty rice for the domestic market in Vietnam, thus filling an important niche. Imports from Cambodia also frees up domestic rice for the export market. However, these cheaper paddy imports may also have a negative impact on domestic production and incomes, especially in the border areas. It may be necessary to develop joint policies to manage better the cross-border trade.
Dao The Anh, Thai Van Tinh

Open Access

Chapter 20. Cross-Border Trade in Sticky Rice from Central Laos to North Central Vietnam

Abstract
Sticky rice is widely consumed in Vietnam alongside conventional rice, as well as in processed foods. Though sticky rice is an established product in Quang Tri Province, the total output is currently not enough to supply the domestic demand within the province, let alone from other provinces. Given that Quang Tri has access through the Lao Bao Border Gate to one of the largest rice-producing provinces in Laos, where most production is sticky rice, and through the East-West Corridor to Northeast Thailand, which also produces large quantities of sticky rice, it has become a conduit for cross-border trade in this commodity. Nearly 29,000 t of sticky rice was imported through this gate in 2010. Almost all (95%) came through formal trade channels—labelled in Laos with a certificate of product origin, sold to registered enterprises in Vietnam with import permits, checked for food safety and quality standards, and subject to an annual quota. No duty was incurred on these quota imports. The remaining 5% entered in small lots via informal channels. Vietnam has many policies affecting the production and consumption of rice, which also have an impact on sticky rice production and distribution. These policies aim to ensure supply to the domestic market, improve the incomes of rice farmers, and increase foreign exchange earnings through exports. In this context, domestic production of sticky rice is likely to increase; hence the potential for expanding the cross-border trade from Laos is thought to be quite limited.
Dao The Anh, Pham Cong Nghiep

Conclusion

Frontmatter

Open Access

Chapter 21. Issues of Rice Policy in the Lower Mekong Basin

Abstract
The commercialisation of rice farming in the Lower Mekong Basin has been at the centre of that region’s remarkable journey out of poverty and food insecurity since the 1970s. A development strategy that centred on opening rice farming to productivity-enhancing investments had the double effect of increasing the incomes of large numbers of poor rural households while generating a marketable surplus to supply the rapidly growing urban population at low prices. The growth in export demand further added to the incomes of rice farmers in the more productive parts of the Basin. Thus, a development pathway emerged that was driven by political necessity to be broadly based and inclusive. However, the very success of this pathway has created new policy issues, requiring adjustments in the long-term emphasis on the intensification of smallholder rice production. The growth in production has led to a decline in prices while costs have been increasing. This has led to pressure from rice farmers for price support. Related policy issues include the persistence of smallholdings, the growing preference for more diversified farming systems, the role of the processing and exporting sectors, and the changing physical environment in the Basin. This chapter examines policies influencing access to resources (specifically, to land, water, and technology), the management of farm activities (whether specialised in production of high-quality rice or diversified into production of non-rice crops), and the appropriation of value (as determined by interventions in the marketing and pricing of paddy and rice).
Rob Cramb
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