Logo of Phnom Penh Post newspaper Phnom Penh Post - Contract farming could unlock value chain: experts

Contract farming could unlock value chain: experts

Contract farming could unlock value chain: experts

A visiting delegation of agricultural experts suggested that Cambodia’s struggling rice industry should develop a contract farming model that if used systematically would help confront the complicated supply chain dynamics that bog down smallholder farmers.

The Global Institute for Tomorrow (GIFT), a Hong Kong-based think tank, spent the last week researching strategies and interviewing farmers in Takeo and Battambang provinces to identify key challenges in the rice sector.

Speaking on Friday at Raffles Hotel, Chandran Nair, founder and CEO of GIFT, said contract farming could be a critical solution to secure farmers’ livelihoods and hoped that the group would soon launch a project to demonstrate its benefits here.

“Contract farming in Cambodia could be done carefully through a pilot project, starting with smaller farmers,” he said. “But it requires that farmers trust the contract farming model that we have been developing and researching.”

Nair noted that while some contract farming was currently being used in Cambodia, it often failed to address supply and value chain dynamics as well as the fluctuation of production costs. “Our group is trying to identify the key value chain problems first before contract farming can be a success,” he said, adding that as a whole, contract farmers need a guarantee that contracts are consistently enforced and farmers get adequate returns.

However, he said the model was not yet developed enough to be applied to large-scale industrial farmers. “We propose that smaller farmers should try contracts and together, as a pilot project, we can see if there is adequate financing and insurance to control risk,” he said.

Sok Puthyvuth, president of the Cambodia Rice Federation and CEO of SOMA Group, said the proposed project could help resolve challenges from the ground up. “We gathered researchers from abroad to study the challenges our rice industry faces,” he said.

“It is a helpful plan, giving us the ideas of how to properly use contract farming.” He said that for smaller farms agriculture insurance – a proposal aimed at mitigating the risks of contract farming for farmers – was not yet viable due to the policy costs. However, the primary conclusion of the research was that farmers and millers need to have a reliable supply chain.

“The main issue is that there is still unstable production and prices, and that both millers and farmers fail to uphold their responsibilities,” Puthyvuth said. In order to promote the rice industry, he said that a systematic plan needs to be agreed upon that tackles the whole rice production process.

MOST VIEWED

  • Purging Sihanoukville’s past with a new masterplan

    Amid illicit activities, haphazard development and abandoned projects, the coastal city of Sihanouk province needs a reset to move forward. A new masterplan might be the answer to shake off its seemingly mucky image to become the Shenzhen of the south Gun toting, shootouts, police

  • Chinese may be first in tourism revival: PM

    Cambodia's tourism industry is gearing up to roll out the red carpet for Chinese travellers after Prime Minister Hun Sen on September 17 indicated that the Kingdom could soon throw open its doors to international holidaymakers vaccinated against Covid-19 – starting with guests from China. Cambodia Chinese

  • Four-pillar approach in reopening of tourism: PM

    Cambodia is drawing up a four-strategy approach to promptly restore domestic and international tourism activity and put the industry on a transition pathway to a sustainable and inclusive model that is resistant to future crises, according to Prime Minister Hun Sen. The prime minister made

  • Airline says ready for green light to reopen international tourism

    Sky Angkor Airline Co Ltd on September 21 said it is ready to transport South Korean and Chinese tourists to the Kingdom once the Cambodian government makes good on plans to reopen its borders to vaccinated travellers. The Siem Reap-based airline made the remark during a

  • Tourism concerns laid bare

    To ensure the success of plans to reopen the tourism market for international visitors, Cambodia must pay utmost attention to two primary determinants – the ongoing paradigm shift in domestic tourism services towards the ‘new normal’, and the factors influencing choices of destinations among foreign holidaymakers.

  • Cambodian bride ‘badly treated, held captive’ by Chinese man seeks help

    A Cambodian woman who travelled to China to marry a Chinese man there was “badly treated” by her husband’s family and then had to be rescued and will be returned to Cambodia to ensure her safety. The rescue operation came about after the 25-year-old