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Foreigners want in on Brunei's rice buyback scheme

Publication Date : 12-02-2014


The Brunei government’s rice buy back programme is garnering interest from foreigners who want to be part of the scheme, a senior agriculture officer recently.

Under the buyback programme, the government purchases rice from commercial farmers at B$1.60 (US$1.26) per kilogramme – a price that is one of highest in the world, said Sheikh Mohd Radzi Sheikh Adnan, head of the National Rice Production Project.

The scheme offers farmers an average profit of “at least B$1.00 per kilogramme“, he added.

In contrast, other countries across the globe pay around US$0.30 (approximately B$0.40) in their respective buyback schemes, he said.

“Basically, B$1.60 per kilogramme of paddy, is one of the highest prices (of a buy-back scheme) in the world. I mean that’s why it attracts a lot of interests from outside Brunei, because of this price,” Sheikh Mohd Radzi told The Brunei Times during a signing ceremony on Monday which saw the Department of Agriculture and Agrifood undertaking consultancy services for a one-year environmental impact study for commercial rice production in Brunei.

Explaining the strong interest from foreign investors, he said these companies have been requesting to meet senior-level officers, submitting proposals and are eager to find out more details about the scheme.

“The government is keen. If more investors are attracted here, it gives job opportunities to the locals in terms of paddy farming,” Sheikh Mohd Radzi said, on whether the government would accept foreign investment participation in the national rice project.

He, however, underlined that similar to other joint ventures, foreign investors would have to partner with a local firm to ensure equal opportunities and participation of local farmers.

“There has to be a local company here and it is up to them to get experts from outside Brunei to come in and help. Sometimes when it comes to extensive farming or commercial farming, there’s not a lot of experience here so they might want to invite the experts they get into how to basically do large scale farming,” he explained.

Sheikh Mohd Radzi explained that the buy-back scheme - which includes subsidised prices for chemicals such as fertilisers and insecticides as well as services for small farmers- applies to farmers in the four districts in Brunei who are registered for the scheme.

Small-scale farmers, defined as those owning less than five hectares of paddy field, receive up to 50 per cent discount in price subsidies, he added.

The large scale farmers, however, are not entitled for the price subsidies but are still able to sell harvested rice back to the government at the current rate of B$1.60 per kilogramme.

The rice farming contract is offered on a three-year basis by the Department of Agriculture and Agrifood. “Basically, we tender out the contracts to interested parties so we assess whoever is most suitable and then right now, the contract is up to three years.

“So we calculate in a year, it is equivalent to two seasons of paddy farming. So basically they would have in total six seasons, so we tender out these areas,” he said.

“In Junjungan we have an average of about 18 to 24 hectares allocated for one company,” Sheikh Mohd Radzi elaborated.
“It is up to them how they want to develop the plantation. But once the contract ends after three years, we will assess and if they do okay, we can extend the contract,” he added.

Last November, the department opened up 50 hectares of land in Limau Manis for commercial rice production. The area will be run by 21 people from Limau Manis Village consultative council, a previous report stated.

The field is divided into 50 lots and each person is to manage from two to three lots and will be paying the government around B$12.50 per lot per year, it added.

*US$1 = B$1.26


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