Developing Cambodia’s rice production and helping preserve Reunion’s rice industry

Sector: Agribusiness
Implementation: Golden Rice
Country: Cambodia – Reunion Island


Context

Cambodia is a major producer of paddy rice but gains little benefit from the potential added value of this production, since the bulk of the paddy rice is developed by importers located in neighbouring Thailand and Vietnam.

The global rice market has been under heavy pressure since 2008. Prices have risen sharply and small markets on the global scale have had difficulty getting supplies. This is the case on Reunion Island where rice is a basic foodstuff for its inhabitants.

SORESUM (Golden Rice’s main shareholder) is a major player on Reunion’s mass market and wanted to invest in Cambodia in order to secure rice supplies and benefit from favourable structural trends for this basic foodstuff.


Objectives

SORESUM and its partners have consequently set out to benefit from Cambodia’s competitive advantage and aim to rapidly treat up to 24 000 tonnes of paddy rice. This production should be marketed at a good price thanks to the high global prices.


Project description

The project involves financing the construction and operating of a drying, hulling and polishing unit for high-quality “jasmine” paddy rice. All the rice will be provided by Cambodian rice growers and production is first and foremost destined to supply the Reunion market.

 

 


Impacts

This “South-South” project has significant impacts for both Reunion and Cambodia:

- On Reunion Island the population suffers from high prices in the shops and price tensions have jeopardised employment for Reunion rice growers (over 200 direct jobs). The Golden Rice project consequently meets two targets: to guarantee the supply of a basic foodstuff that is becoming increasingly scarce and to preserve jobs. Moreover, this project is fully in line with the aim of limiting dependence on public demand and developing a market sector that is less tied to Metropolitan France.

- Cambodia is rich in paddy fields, but the bulk of production is sold as paddy rice to neighbouring Thailand and Vietnam that often import the rice illegally and then develop and export it. Golden Rice is participating in the creation of an organised industry in Cambodia that develops local production for export. This will consequently create employment and wealth in Cambodia, a mainly rural country where wealth inequalities between rural areas and cities are growing rapidly.

Date and amount

Golden Rice started production in 2009
Proparco is financing the industrial investment alone with USD7M.