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Smoking profits for farmers

Smoking profits for farmers

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PG15-story-1.jpg

Cambodia's small number of tobacco growers reap the benefits of rising prices as exports to Vietnam, Sri Lanka, Singapore and Australia are set to increase

RICK VALENZUELA

Cigarette vendor Seng Ly plies her wares Monday on Sothearos Boulevard, where she has sold cigarettes for 15 years.

RISING tobacco prices and stronger ties to foreign buyers could jump-start Cambodia's idle tobacco industry, sector officials say.

Kong Triv, chairman of the Cambodia branch of British American Tobacco (BAT) and head of the government's tobacco export committee, told the Post that his company's export of tobacco to its sister operations in Vietnam, Sri Lanka, Singapore and Australia has risen from 400 tonnes in 2003 to around 1,500 tonnes in the past few years.

He said the country is prepared to increase exports even more as production increases.

"With a price of US$1,300 a tonne, about $10 million is generated annually in Cambodia from tobacco crops, and the number stands to increase," Kong Triv said last week.

Once harvested across a broad swathe of land northeast of Phnom Penh, tobacco crops are now limited to riverfront plots in Kampong Cham, where BAT has direct contract with local farmers harvesting some 7,300 hectares of land.

Each hectare yields about two to three tonnes of dried tobacco, according to Kong Triv.

He said that currently Cambodia's four tobacco processing factories receive 85 percent of their supply from local crop. This represents a significant increase from a decade ago, when the Kingdom imported most of its tobacco.

Domestic tobacco production grew in the early 1990s, but plummeted by the turn of the cent nguon sovan and Brendan brady

ury. It has seen a resurgence in recent years, however.

"The British American Tobacco company has exclusive rights to export tobacco out of Cambodia, and they have direct contracts with farmers," said Lim Saody, head of the marketing office at the Ministry of Agriculture.

With an exclusive contract for tobacco export from the Kingdom, BAT stands to benefit from any growth in the industry, he said.

And the rise of independent farmers is unlikely in this phase of the industry's growth since "farmers who are not part of a contract system are less likely to get into it because it requires a lot of technical advice and inputs," explained Tim Purcell, director of Phnom Penh-based NGO Agriculture Development International.

He added that the rise of agribusiness in Cambodia is a logical progression for a country that no longer has to focus solely on farming to feed its population and that tobacco is a lucrative cash crop.

The level of quality achieved ... is a promising sign for the development of an exportable cash crop.

According to a 2003 World Bank report, Towards a Private Sector-Led Growth Strategy for Cambodia, "the level of quality achieved in Cambodia for blending tobacco in recent years is a promising sign for the development of an exportable cash crop".
Sdoeung Trap, a member of Kampong Cham province's Koh Samrong commune council who is himself a tobacco farmer, said that over the last two years all 1,300 families, owning 450 hectares of land in the commune, have switched to planting tobacco.

Tobacco is grown on small plots but yields a higher output than other crops such as corn and beans, he said.

"Farmers have moved to tobacco since they are getting a high price. With a strong market for tobacco now, farmers in the commune are doing better than farmers elsewhere who are growing corn or beans," he said.

He said the tobacco crops from his commune are purchased by BAT as well as middlemen who sell to Vietnam.

Cambodia, however, still faces the task of better branding as it enters deeper into the international market.

"Like wine, smokers show loyalty to a particular flavour of tobacco," NGO director Purcell said.

"So it can be hard for a new variety to find buyers."

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