Lush paddy fields as far as the eye can see. So why can't this farmer afford to feed his family?

Cambodia produces more rice than it needs, but the soaring cost of fuel is pushing up food prices and forcing villagers to send their children out to work. So what can have gone so catastrophically wrong? Alex Renton reports



Lai Phon and I are discussing the international commodities trade. Specifically, why she can no longer afford the rice she needs to feed her family. I sit beside her on a bamboo platform between the stilts of the family hut in the rice fields of Anthep Komar, central Cambodia. This is her kitchen. As the wood-fired stove starts to glow, she's busy washing a great mound of rice for boiling: it looks to me like enough to feed a school, but in fact it will keep the nine members of her family going for 24 hours. And the adults will be hungry.

I ask if she knew that the Americans and Europeans have found a way to turn food into fuel - that's one of the reasons food prices are going up all over the world. She stops her work and looks at me. She hadn't heard about that. 'It would be better,' she says tentatively, 'if they turned fuel into food. Have they found a way to do that?'

No one in Cambodia really knows why the price of their rice has risen 50 per cent in six months, and tripled over the last two years. What bewilders these rice farmers is how, after two years of good harvest, this catastrophe - and it is a catastrophe, for a people who get 60 per cent of their nutrition from rice - could have come about. They know there's no shortage of rice. Older people like Lai Phon, who's 52, have known many tragedies - drought, flood and several years of murderous famine that followed Cambodia's collapse under the genocidal Khmer Rouge in the 1970s. But this disaster has come out of the blue.

She tells me she thinks it's mainly because gasoline has got so much more expensive. The family ploughs and harvests their land with the help of no more than a water buffalo, but they've seen the price of chemical fertiliser - which is largely made from crude oil - more than double. And a trip by moped to town, the school and the market costs twice as much as it did a year ago. As a result, families in the village have been taking their children out of school, and putting them to work in the fields. 'We don't want to, but this is a crisis.'

Dusk is falling, and Lai Phon's family begin to gather, excited about supper. The problem facing her, as mother, wife and caterer to all these hungry, hard-working faces, becomes more obvious when we walk down the sandy road to get some simple ingredients to put some thrill on the pile of rice. At the crossroads that forms the hub of this village a man has arrived from the nearby town of Kompong Thom. With a huge tin bowl of fresh fish heads secured to the back of his moped, he travels in a cloud of flies.

Lai Phon buys a kilo of fish heads for about 40 pence, and some greens: waterlily shoots, and morning glory. Back in her kitchen she chops the heads and vegetables into a stew for pouring over the rice. It isn't much, but it's better than the family will be eating by the end of the summer. Here in Cambodia there's only one rice-harvest season a year, so the months before the harvest in November are often hungry times. Subsistence farmers like those of this flood-prone village can rarely grow enough rice to pay their debts and see their families through the year.

The Lais had exhausted the rice sacks in their store a couple of weeks before we visited them in June. So now they need other income to get them through the next five months. If they borrow a cup of rice from neighbours or a shop, the traditional payback rate is two cups - interest of 100 per cent. With milled rice costing at least 2,500 riel (about 35p) a kilo, rice is now by far a household's biggest expense.

The Lais' neighbour, Seng Phon, a single mother who owns no rice paddy, told us she'd had to send her 14-year-old daughter to work as a servant in the tourist town of Siem Reap, so that she and her two young boys could eat. She sends the boys off to forage for leaves and roots in the forest, or to catch snails that she can sell. They don't go to school.

It's rice-planting time in the great Mekong flood plain, and the brilliant green fields around the village are filled with bent figures, mainly women, bedding in the seedlings. It's a crucial time for people like Seng Phon to earn some money. In normal times a day's labour in the paddy field would pay about 3,000 riel (40p). 'A family of six eats at least two kilos of rice a day,' says Han Sophan, a community leader. 'Two years ago you could buy that much rice if you worked for a day, and have a little extra money. Now 3,000 riel buys only just half the rice needed to feed a normal family. So what can people do? Adults are going hungry so the children can eat.'

Mr Han is director of a local NGO which, supported by Oxfam, tries to help the villagers find other sources of food and income. We go with him further into the great maze of dykes that parcels up this flat land beside Cambodia's great irrigating lake, the Tonle Sap, to a village which is lucky enough to have a well-stocked fishing pond. Mr Han's organisation is helping the village establish its legal rights to the pond - so it cannot be fenced off and appropriated by some of the rich business interests operating here - and to fish in a more sustainable way. We watch a young fisherwoman, Hoeun Ny, paddling her slender boat through the still water, fencing out a new net with larger holes to let undersize fish escape. It's the traditional method; a newer one that gets much used around here is 12-volt battery fishing. You simply put cables into the water and electrocute the inhabitants of the entire pond. For farmers with no cash, and hungry children in the stilt hut, it's a tempting way of spending a dark night.

This mess seems particularly cruel - and incomprehensible - to Cambodians. Everyone knows that the country produces more rice than it needs. Surely they should be getting rich, if the price of their principal crop is soaring? Yet incomes and lifestyles are collapsing in Cambodia, especially in the cities: so hard is the food-price rise for those who don't grow food that even Oxfam's relatively well-paid staff have had to be given emergency pay rises. 'A bowl of noodles for lunch was 75p yesterday - last month it was 50p. It's just crazy,' one staff member in Phnom Penh told me.

Cambodia's struggle to rebuild itself from one of the most calamitous wars of the 20th century had been going reasonably well - malnutrition and disease rates dropping, foreign investment flowing, the capital, Phnom Penh, visibly booming since I was last there four years ago. Even the HIV/Aids infection rate, once the highest in the region, has now dropped below one per cent. The country has gladly joined the World Trade Organisation, dropping price controls and tariff rules for the promise that it would be part of the club of wealthy nations. How, then, having followed all the demands and prescriptions of the international economists who redesigned Cambodia's structures along the best neo-liberal principles, does the country suddenly finds itself unable to feed the majority of its people at a feasible price?

'It's true that the entire country could feed itself with its paddy rice [raw, unmilled rice]. But what it lacks is the ability to store or process that rice,' says Sumie Arima, a regional-trade policy analyst for Oxfam. 'So what happens is that the farmers sell the rice straight from their paddy fields to middlemen who then sell to Thailand and Vietnam. The storage of it, the milling and polishing, the adding of value, all happens abroad. The drainage of potential money from Cambodia is huge - because the finished rice is then imported back again, at three, four times the price.'

Faced with this problem, Cambodia announced earlier this year it was banning exports of rice, as other Asian countries from Vietnam to Bangladesh had. But this still-fragile state has no real ability to police the hundreds of miles of jungled, mountainous border it shares with its much richer and more efficient neighbours. And with both Thailand and Vietnam - while we were in Cambodia in June - announcing prices above market rate for state buying-in of rice in order to conserve their stocks, the leakage of Cambodian rice across the borders can only continue.

Already this is upsetting the work of the agencies trying to tackle Cambodia's persistent child-malnutrition problem - the UN World Food Programme has had to temporarily suspend its school-feeding programme because it couldn't afford the rice. Luckily this year's rainfall has been good and crop prospects are optimistic. If anything were to go wrong as the new rice matures, one Oxfam staffer told me, a 'food crisis would be inevitable'. As it is, the farmers they work with will all be carrying a higher load of debt when the next harvest comes round, which will hurt their children's health and education. 'We'll see school drop-out rates rise, and a rise in malnutrition - it'll be like turning the clock back 15 years.'

In Ang Don, a drab slum on the outskirts of Phnom Penh, we stop for lunch at a stall selling num krok, rice cakes. Fried in an iron skillet by 11-year-old Changsrey Lim, they're delicious little UFO shapes, made from rice flour, coconut milk and garlic leaves. We dip them in a pungent chilli-fired fish sauce and munch them very happily. Talking about hunger tends to make you hungry, I've found. A plate of six num krok is enough; it costs 500 riel (about 6p).

Lim is very shy and very good at her job - the rice cakes come out of the pan a gorgeous golden colour. But obviously she should be in school. 'I had to take her and her sister out of school five months ago,' says her mother Changsrey Ly. 'My debts were just so high, I had to get them to help me at the stall.' The stall is six plastic seats at a little table under a shabby umbrella. Ly explains that, so long as it doesn't rain, she can make 20-30,000 riel, (£2.50-£3.50), a day serving cakes and rice porridge at breakfast time. If it does rain, no one eats, because the men in the community can't get the casual labour they depend on in Phnom Penh's construction sites.

Ly's income has halved over the last six months. 'My costs have doubled, but I can't increase the price of the rice cakes. People round here just don't have the money. If my cakes cost any more they just wouldn't come.' If she had more money, she tells me, she'd buy more rice.

The effects of the price rises on marginalised communities like this one - the people are all victims of a slum-clearance scheme designed to make central Phnom Penh more attractive - go beyond hunger and children dropping out of school. Many people in Ang Don make a living riding motorbikes as taxis - but with the price of fuel doubled and still rising, they can no longer afford to come home from the city centre at night. Families are fractured and women and children left at home are frightened of desperate people stealing their belongings.

Yang Saing Koma, of the influential farmers' assistance and education organisation Cedac, tells me that he despairs of the disaster that has befallen the country. 'We've lost many things, not just the hundreds of millions of dollars of potential profit from the price rises. We've lost the jobs, and the raw materials that come from the process of rice milling, like the rice bran which could have been used for animal feed and fertiliser. And there's a worse scenario: if Thailand and Vietnam ban exports again later this year, we'll lose our rice to them and we'll never get it back.'

Among Cambodia's problems is the fact that its rice growing is still medieval, compared with the neighbouring countries. In Thailand, mechanisation, irrigation and modern growing techniques make rice paddy as much as five times as productive - in Vietnam it's normal to reap two or three crops a year, compared to Cambodia's one. Cedac and Oxfam are working on these issues, as well as the notion of exploiting the fact that, while Cambodia's rice farming is primitive, that also means it is largely organic - and so could be marketed at a premium.

Mr Yang moans that, despite all the investment put into the country by the World Bank and other international institutions, no one thought to build up the rice-processing industry, or even increase storage capacity. 'I don't understand why we can't invest in these facilities: it makes profit for the farmers, for the country and provides jobs.'

The truth of course is that, as their ideology dictates, the expert western economists prevented the Cambodian government from making such public investments. These things should be left to the private sector and free trade, they said. The problem is, though, that these mechanisms seem to have left Cambodia in the lurch where it matters most - providing the security of adequate, affordable food for its people.

The Cambodian government is doing its best - trying, for instance, to buy up a stockpile of rice against further price rises. But everyone agrees the state has neither the muscle nor the money to act in any really forceful way. 'We can't stop the price increases,' said Heang Rattana, an official in the ministry of agriculture. 'It's the international markets, and their interrelation with the price of fuel that sets the price.' But Cambodia is pleading for investment in its agricultural infrastructure - and not before time.

As the prices soar and tumble on the commodities markets in Chicago and London, someone's getting rich out of Cambodian rice. But it's not Cambodia.

· Watch Alex Renton'svideo on the food blog

· Oxfam is launching a worldwide appeal to help people cope with the effects of the food-price crisis. For details and donations go to