Rice Cartel

I think it is foolish to try to form a cartel of rice exporters and it is even more foolish that the idea starts with Cambodia. First, rice is not oil. Oil is natural and can not be produced unless there is oil to be extracted. Rice can be grown in most countries in the world. How are we going to form a cartel of almost every country? Some rice importers could simply produce more when the rice is getting higher. Second, even with the assumption that cartel is possible, with one million tons of rice export on average per year, Cambodia is a needle in an ocean. Assume the scheme is successful and the price of rice increases by a whopping 20% of $240/ton. That will be an extra $48 million dollar addition to the Cambodian Economy (assume zero costs of transaction and zero costs of endless meetings, contract agreements and enforcement, to form a cartel). With a perfect scenario, we are increasing the economy by less than one percent or a per capita increase of less than a penny a day. Here's a thought: if the effort spend on forming a rice cartel is to be spent on fighting corruption that cost Cambodia 1 million dollar a day, wouldn't it make more sense?

Ou Virak

Phnom Penh