Contract farming in Cambodia has witnessed sharp growth this year, with 516 contracts signed so far this year, eclipsing the 498 for the whole of last year – proving the merits of the scheme, Minister of Agriculture, Forestry and Fisheries Veng Sakhon said on Thursday.
He was speaking as a witness at the signing ceremony for a farming contract involving Ly Ly Food Industry Co Ltd, one of the Kingdom’s largest food processing small and medium-sized enterprises, and Ly Ly Kameda Co Ltd, a joint-venture it launched with Japan-based Kameda Seika Co Ltd last year.
He said contract farming is improving Cambodia’s food processing supply chain and sharpening its competitive edge locally and internationally.
The contract farming not only enhances the productivity of agricultural production, but also enables the Kingdom to use raw materials to their fullest potential, reduce imports and create employment opportunities, he said.
“The active participation of private partners will unquestionably lend a hand in promoting Cambodia’s agricultural sector by further enhancing commercialisation and agro-industrial development.
“This in turn will further increase the added-value of crops, maintain sustainable production and supply, and boost already-rising household incomes in line with Cambodia Industrial Development Policy 2015-2025,” said Sakhon.
Cooperation between development partners, companies, factories, processing enterprises and farmers is essential to more robust, wider and more effective adoption of contract farming, he said.
Using the latest technologies and innovations available, contract farming will also reinforce and expand the agricultural production mechanism and ensure production quality criteria are met.
Ly Ly Food Industry CEO Keo Mom said that over the last few years, fruit and vegetable growers have struggled to secure a market during the harvest season, crippling their earning power.
This, she said, often leads them to migrate or quit agriculture altogether.
She added that contract farming not only protects growers but also promotes international recognition of the quality of Cambodian products.
“It truly is a source of pride for me that all products made by Cambodian farmers can have a competitive advantage on the international market,” she said.
Cambodia Rice Federation president Song Saran could not be reached for comment on Thursday, but he previously said contract farming is necessary to promote stronger and more competitive Cambodian production so that it demonstrates high standards of excellence on the international stage.
Kong Pheach, director of the ministry’s Department of Agro-Industry, told The Post that contract farming plays an important role in building farmers’ confidence, noting the surge in number of contracts signed in the past year.
He said contract farming has many advantages – not only does it help growers obtain a guaranteed market, but also provides growers with the latest technical resources, expertise and assistance, as well as seed stock, provided by authorities and seasoned companies.
Cambodia is no longer a subsistence agricultural country, he said. Selection of agricultural products for export requires careful consideration of quality to increase their competitive position on international markets.
“Contracts farming is meant to help all of us in finding markets, seed stock and common solutions,” he said.
According to Pheach, only 93 farming contracts were signed in the first half of last year, mainly in the rice sector.