The paper starts with an overview ofCambodia’s rice sector, with a particular attention toaspects which affect its need for external working capitalfinance, and characteristics and constraints that couldhinder access to such finance (e.g., warehousing capacity,processing constraints, logistics, and market risks).Chapter two describes the general conditions for crop-basedfinancing in Cambodia’s rice sector. Chapter three discussespolicy options for enhancing the use of paddy and rice ascollateral for financing. The chapter sets out the two mainmodalities: collateral management, and public warehousing.Both collateral management and public warehousing work bestwhen certain support structures are in place, in particularan indemnity system, a system for the electronic trading ofwarehouse receipts, and a facility for refinancing warehousereceipt loans (which could be managed by the Central Bank oroutsourced to another competent entity such as an investmentfund). These are discussed in separate sections. The varioussections describe the situation as currently prevails inCambodia, and provide suggestions on how to move forward,including in terms of possible government supports. Casestudies on international experience are used to illustrateoptions and pitfalls. A final section concludes, with afocus on policy options for the Government of Cambodia andaid donors, the detailed terms of reference for a possiblepilot project can be found in annex three.
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